Deputy Kirk has given me notice of his intention to raise the matter of the need to reassure workers at Xerox, Dundalk, of the security of their employment and the well being of the company's future prospects in Dundalk.
Adjournment Debate. - Dundalk Xerox Factory.
I thank you for allowing me to raise this most important issue on the Adjournment tonight. I propose to share time with my constituency colleague, Deputy McGahon, with the agreement of the House.
Just a short few years ago, there was a great welcome for the Xerox plant when it was established in Dundalk. A very significant business park was developed at the south end of the town and one of the largest industrial projects ever in Dundalk was set up.
The recent announcement of the closure of the ink-jet sector came as a major shock to those who were looking forward with significant confidence to the further expansion of the plant and to the employment of a greater number of people. The announcement rocked the locality and confidence was quite clearly affected. Many people have been looking forward to expansion and not to retrenchment.
We are at a stage now when there is an urgent need to reassure the remaining workforce in the plant. Many of those left other employments to come home to work in their native town. Many employees who have lost their jobs or are facing the threat of losing their jobs in the next few weeks would in normal circumstances have the commitment of house mortgages and the normal commitments of marriage and home establishment. They are now looking for reassurance both in the short and long-term. I hope the Minister of State, Deputy Treacy, can give that assurance. It is important that the industry is in a position to consolidate in Dundalk. We hope that such consolidation will lead to further growth.
Dundalk has taken a very severe battering over the years because of its proximity to the Border and the difficulties we have had to deal with over the last 30 years. We all hoped that when Xerox came to the town we had really turned the corner and we saw it as a clear indication of confidence in the future.
I thank Deputy Kirk for sharing his time. This is a matter of grave concern to both of us. The loss of manufacturing jobs in County Louth, and particularly in Dundalk, has now become a serious crisis. Manufacturing industry in Dundalk has suffered badly in recent times, especially with the loss of 400 jobs in Xerox. I will not draw any graphic descriptions of the devastation, suffice to say that there are 400 families in shock in Dundalk tonight. Many of those families have taken out mortgages and do not know what the future holds for them. My concern is that an American company could come to Dundalk and inculcate such expectancy in the workers of Dundalk, and then within two years, that company is letting go 400 people.
Will the Minister say how much Irish money was invested in this company and what research was done into the viability of that company before Irish money was granted? The dogs in the street all around the world know that the Xerox company is in serious trouble in America where it has been threatened with bankruptcy. State money was donated, with the best of intentions. It was given a 100 acre site and Louth County Council provided the best of facilities, discommoding many people in Dundalk in the process. This was an ailing company before it came.
I am not satisfied that enough research was done by IDA Ireland despite its desire to attract a major industry to Dundalk. It is well known Xerox was ailing and threatened with bankruptcy. The likelihood is that it will go bankrupt in America. If that happens the entire plant in Dundalk will close and at what cost to the taxpayer? I wish this company survival. I applaud the Government for making it attractive for it to come to Dundalk but I am deeply concerned at the amount of money spent on attracting an ailing industry. Can this company come clean with its workers who are still there? Can it be honest with the Government but more particularly with the unfortunate workers who do not know what tomorrow will bring?
Will the Deputy draw his remarks to a conclusion? It is very unfair to the staff of the House if Members continue at the end of five minutes especially at this time of night.
I agree.
I ask that a serious approach be taken on this issue. We need honesty from that company and we need honesty from the Government about the level of its investment.
I sincerely thank the Deputies for raising this important matter on the Adjournment. I share their concern at the disappointing news in relation to the Xerox operation in Dundalk, County Louth.
Xerox Corporation is the world's sixth largest information technology company. It is a public company, quoted on the New York stock exchange. Headquartered in Stamford, Con necticut, it currently employs more than 90,000 people worldwide and is one of the leading document processing companies in the world. It develops, manufactures and markets a wide range of products, including copiers, printers, scanners, fax machines and document management software, to facilitate the flow of information from paper to electronic form and back to paper again.
Xerox Europe, the European operations of Xerox Corporation, markets Xerox products, solutions and services throughout Europe and employs 16,000 people. The company has advanced research and development centres in Cambridge in the United Kingdom and Grenoble in France. It has manufacturing operations in Ireland, the United Kingdom and Holland. The 110 acre Xerox technology park at Dundalk is one of its manufacturing facilities. This 500,000 square foot facility manufactures colour toner, inkjet printer cartridges, inkjet printer heads, power supplies, electronic assemblies, as well as undertaking software development. Its current employment in Dundalk is 900 people.
Xerox Corporation has been experiencing poor financial performance in recent times. Revenues for year end 31 December 2000 were £15.58 billion with losses of £214 million. In the first quarter of 2001, revenues were £3.5 billion, down 13% from the equivalent period in 2000.
Xerox is engaged in a review of asset dispositions, as a key element of a plan to restore a sound financial foundation to the business. The company has also undertaken an internal reorganisation and major cost reduction programme. The completion of the sale of its China operations in December 2000 to Fuji Xerox, its Japanese joint venture partner, was the first of such disposals. A partner was being sought for its inkjet business. However, while the company was engaged in active discussions with potential equity partners, the slowdown in the economy and its impact on the PC and SOHO – small office and home office – markets, prevented these companies from making what had been considered an attractive investment in Xerox's SOHO business.
In the first quarter of 2001, the company recorded an $82 million pre-tax loss in its small office-home office business. Revenues for SOHO were $139 million, representing 3% of total first quarter revenues. Xerox expects its second quarter pre-tax SOHO operating loss to be similar to the first quarter.
On 14 June, Xerox announced its plans to exit from its SOHO business segment in a move designed to sharpen the company's focus and support its turn-around strategy. It will discontinue its line of personal inkjet products, sold primarily through retail channels. As the inkjet product line is a significant part of the Xerox campus at Dundalk there will be an impact there.
Xerox's Dublin operations at Ballycoolin Business Park in Blanchardstown, include financial services, technical support and customer support operations for the European market. Xerox employs 1,500 people in Dublin. This operation will not be affected by the job losses at Dundalk announced on 14 June last. The company is trying to minimise the number of jobs affected by the decision in relation to its inkjet business. The inktank business will be maintained for the time being.
Xerox and IDA Ireland have met at high level and discussions are continuing. Xerox has assured IDA Ireland of its willingness to work with IDA Ireland to find an alternative project for the Dundalk workers affected. IDA Ireland has an unique track record in all parts of the world in securing outstanding foreign direct multinational companies for Ireland. Key arrangements are made, commitments are entered into and must be honoured. In any negotiations with a company IDA Ireland will ensure all commitments are fulfilled to the absolute conclusion.