Dáil Éireann díospóireacht -
Tuesday, 6 Nov 2001

Vol. 543 No. 2

Adjournment Debate. - Job Creation.

Mr. B. Smith:

I am grateful for the opportunity to raise this important issue on the Adjournment. One year ago County Cavan received excellent news when the Minister for Enterprise, Trade and Employment announced that the American company, Teradyne Incorporated, was to invest £50 million in a major new industrial campus near Cavan town. The development was to create 740 jobs over a five year period. It was a great achievement to bring Teradyne, a major interconnect systems manufacturer, to Cavan. The announcement represented the first significant IDA supported investment in County Cavan in over 22 years. I compliment Teradyne on its decision to locate in Cavan.

When the Government took office in June 1997 I enlisted the support of the Taoiseach and the Minister for Enterprise, Trade and Employment to try to bring inward investment to County Cavan. I appreciate the efforts and wholehearted commitment to the creation of jobs in Cavan. Last Friday evening we heard the extremely disappointing news of Teradyne's deferral of the construction of a major new industrial campus. Everyone in County Cavan and adjoining areas is disappointed by the deferral. I know the Taoiseach and the Minister for Enterprise, Trade and Employment are similarly disappointed, as they put a huge effort into securing the investment. There was a wholehearted joint co-operative effort by the executive of the local authority, local public representatives, the IDA regional manager and his staff and the county enterprise board to bring the project to County Cavan.

Teradyne has set up in a temporary base in the IDA advance factory near Cavan, where 44 people are employed. I appeal to the Minister of State, Deputy Tom Kitt, and the Minister for Enterprise, Trade and Employment to help consolidate the 44 jobs. I hope the upturn in the economy in the next 12 months will mean that Teradyne can increase and expand its workforce considerably. My special appeal to the Government is to make every effort possible and give encouragement to Teradyne to retain and increase its present workforce in Cavan. I acknowledge Teradyne's statement last week that it has received the wholehearted co-operation of the statutory agencies in County Cavan and the support of the public at large. Teradyne knows it has come to a county with a good workforce, with committed and diligent people. I appeal to the Minister of State to do everything to help us get over this disappointing news.

Mr. Boylan:

In the past Deputy Brendan Smith and I have disagreed, or agreed to disagree, on many issues and we will do so again in the future. We are in agreement on this issue, however. Last week's announcement caused devastation not only in Cavan town, but in the county and the hinterland. It was preceded by 24 hours by the announcement that full planning permission for the Teradyne plant had been granted, after an appeal to An Bórd Pleanála. Friday's announcement was more than people expected and they were greatly surprised.

Teradyne's announcement of its intention to locate in Cavan was welcomed by the community. Its representatives were welcomed with open arms during their many visits to Cavan, when many positive statements of the corporation's commitment to Cavan were made. We are happy that an advance factory has been set up outside Cavan town, where 44 people are employed, as Deputy Brendan Smith rightly said. We hope the jobs will be held in the hope there will be an expansion when the economy improves. I do not blame the Government for the downturn in the global economy, as it is not to blame. I do not blame the Government for the fact that Teradyne decided to pull out.

I appeal to the Minister of State, Deputy Tom Kitt, the Minister for Enterprise, Trade and Employment and the Taoiseach to take immediate action to redress this great disappointment. Teradyne's decision has had a devastating effect. Young couples involved in the information technology industry in Dublin, Cork, Galway and Limerick had made plans to return to live in Cavan. They had speculated in the purchase of a house or site which could be developed. Investors had purchased sites as they thought housing would be in demand. All these plans have collapsed after last Friday. I ask the Minister of State and the Government to take personal action. The 94 acres that have been developed on the Cavan bypass form an ideally located campus, one of the finest sites in the country. The IDA should purchase the site to prepare it for the economic upturn, which surely will come.

Another measure that is needed is the decentralisation of State offices from Dublin to Cavan to soften the blow of last week's decision. The Minister of State cannot disagree with my statement that it is impossible to get in and out of Dublin. I do not believe decentralisation should replace the Teradyne development, but it would show that the Government is interested in taking action to help us cope with this major disappointment. Such a gesture would bring a response from the people of Cavan, who do not depend on others to help them and who have shown they can help themselves with indigenous industry, which has been thriving. Cavan has not benefited from the economic arm of the peace process. It has not received a red penny. Cross-Border bodies were denied to Cavan and an agricultural body, ideally suited to Cavan, was placed in Cork. There is a case to be made for decentralisation to Cavan, which has waited 24 years for inward investment. As many of the suppliers to Monaghan Poultry Products, which recently closed, were Cavan farmers, there has been a double body blow. I appeal to the Minister of State not to ignore Cavan and to ensure Cavan will benefit in the short-term.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. T. Kitt):

I thank Deputies Brendan Smith and Boylan for raising this matter on the Adjournment. I was also disappointed to learn of Teradyne's decision not to go ahead with its Cavan investment plan. I appreciate the huge disappointment of the people of the area. Having visited the area many times and as someone who knows it well, I know that Cavan people are resilient.

Teradyne is the world's largest manufacturer of automatic test equipment and a leading producer of advanced interconnect systems, the spinal columns of electronic systems. In 1990 Teradyne (Ireland) Limited was established in Blanchardstown to manufacture interconnection systems, creating 160 jobs. Some 230 people are currently employed there. In July 2000 the Government approved a proposal by Teradyne to expand its existing Blanchardstown manufacturing facility, creating 90 jobs, and create a further 740 manufacturing jobs over a period of five years in a campus development in Cavan. I deeply regret Teradyne's decision not to proceed with its Cavan investment plan. Teradyne has suffered under the current market downturn, as Deputies have acknowledged. The downturn has been further exacerbated by the events of 11 September. Sales for the quarter ending 30 September 2001 fell over 70% from the same quarter last year to $249.2 million, with a net loss of $169.9 million, making the Cavan expansion plan no longer a viable option.

The initial commitment of Teradyne to invest in Cavan clearly endorses it as a suitable location for international investment. Teradyne's decision to reassess its position relates to the downturn in the world economic situation and is unrelated to the environment in Cavan, which is very positive. IDA Ireland last year opened a regional office in Cavan town, which is its headquarters for all regional development in the Border region. IDA Ireland will continue to promote Cavan vigorously and work across all agencies to co-ordinate the delivery of the infrastructural and education investment under the national development plan. This will be essential to Cavan's future as a centre for future foreign direct investment.

Over the last two years IDA Ireland has radically changed its policies, with the aim of delivering half of all new greenfield jobs into areas with Objective One status, such as Cavan. This involves doubling the proportion of greenfield jobs negotiated for these regions. Other initiatives include putting a greater focus on marketing regions for specific sectors and improving marketing material for the regions. IDA Ireland's incentive package is strongly geared in favour of Objective One regions, in line with new EU state aid limits. As a result of the above initiatives, 50% of all jobs negotiated by IDA Ireland during 2000 in new greenfield investment projects have been secured for Objective One regions. This is a strong result, which came from intensive and radically changed marketing approaches by the IDA team, working in close partnership with the local authorities and third level colleges and universities.

Despite the ongoing retrenchment in the US economy, the source of a significant proportion of overseas investment, the IDA continues to strive towards maintaining this level of investment in the BMW region. However, improved access is crucial to attracting new overseas investment to the regions and, in this context, the importance of improved air and road access cannot be over-emphasised. This has been recognised in the national development plan which includes plans to bring our roads, railways and air services up to a standard consistent with a modern economy within the next six years. Availability of high quality telecommunications and energy supplies is also essential. IDA Ireland will be keeping in close contact with relevant infrastructure providers to ensure that they are aware of IDA Ireland's priorities. I assure the Deputies that the development agencies will continue to promote Cavan for additional investment and job creation.