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Job Losses (Continued)

Thursday, 6 December 2012

Dáil Éireann Debate
Vol. 785 No. 3

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(Speaker Continuing)

[Deputy James Bannon: Information on James Bannon Zoom on James Bannon] This has also resulted in job losses in other Ericsson facilities around the world. The reality in my constituency of Longford-Westmeath is that the midlands are haemorrhaging jobs. Athlone has been left in shock by the latest losses. The announcement by Ericsson that approximately 100 workers are to be let go is nothing short of devastating for Athlone and the midlands generally.

Over 9,000 new jobs have been created nationally in IDA Ireland-supported companies since the start of 2011, but very few have come to the midlands. While I am delighted that the company is still committed to its Athlone facility, as demonstrated by the announcement last July of 100 high-end research and development jobs in Athlone, I am somewhat disturbed that 100 workers who are described as being in older, low-cost activities are now being shed six months later. No matter how this is rationalised, the end result is that 100 workers and their families are being left to cope with the devastating financial implications and adverse impact on their well-being. It is more than time for jobs to be prioritised for the midlands. Ongoing job losses must sound a note of alarm to IDA Ireland and focus its efforts on Longford-Westmeath.

The ten-point plan for small and medium enterprises in yesterday's budget is the most positive news for growth and will probably provide a window of opportunity for the midlands. Over the past few years, Longford-Westmeath has seen the closure of Chemical Electric and B3 Cables, and losses at C&D Foods, all in Longford. There have been agricultural losses in Longford and Westmeath, in addition to the loss of Army barracks in Mullingar and Longford, and the courthouse in Granard. It was announced yesterday that seven Garda stations are being closed in the Longford-Westmeath area. Meanwhile, the M4 from Mullingar to Rooskey is not assured, which represents an infrastructural loss for the midlands.

Longford-Westmeath is urgently in need of a rapid injection of inward investment. While the proposed Chinese hub in Athlone is an exciting prospect, there is no assurance that it will go ahead. I am reminded of the fanfare associated with Cardinal Health in Longford back in 2004 and the incredible fallout from the loss of a potential 1,300 jobs. Proportionally, the midlands have been neglected in terms of job creation opportunities and denuded of services to an excessive extent. Each loss contributes to the economic downturn, which is turning vibrant areas into dying centres. Communities are demoralised, while health services, educational facilities and businesses are operating at an inadequate level.

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt Is the Deputy aware that he has two further minutes after I call the Minister of State?

Deputy James Bannon: Information on James Bannon Zoom on James Bannon I know. Following the closure of seven Garda stations, security will be at crisis level. The recent job losses are another wake-up call which I am asking the Minister of State not to ignore. For many years, I have been calling for a task force which needs to be established to drive the economic recovery and provide jobs for sustainable growth in the midlands.

Deputy John Perry: Information on John Perry Zoom on John Perry I would like to thank Deputy Bannon for raising this important issue. Ericsson originally established a manufacturing operation in Ireland in 1957 and now has three business groups based in Athlone and in Clonskeagh in Dublin. The research and development unit in Athlone employs 800 people. The Clonskeagh site employs 489 staff in its operations competence centre and 52 in its marketing unit.

The Athlone research and development unit has global responsibility for Ericsson's operation support systems. In June 2011, the Athlone unit announced its intention to create an additional 100 research and development positions over its then existing research and development staff level of 620. To date, it has created an additional 180 research and development positions, well in excess of the original plan. Over the past four years there has been a corporate emphasis on shifting research and development to the east in order to drive costs down. The latest corporate focus is on high performance rather than low cost and is driving a review of all research and development activities.

The job reductions announced by Ericsson on 5 November 2012 will take place under a voluntary programme. This is a significant aspect of this unfortunate reduction in numbers and one to be strongly welcomed. These job reductions result from a review undertaken by Ericsson's global operation support systems research and development business. The total headcount reduction in Athlone of 100 staff comprises 50 outsource management roles and 50 legacy systems development roles. The proposed rationalisation programme will solidify the Athlone operation and position it for further future growth.

Ericsson is fully committed to Ireland and has confirmed Athlone's global research and development status. It has also acknowledged the Irish management team's leadership in shifting towards a lean and agile operation, and is using it as the model for all its other research and development operations worldwide to follow. The company is a major contributor to the economy paying annual salaries of €108 million, PRSI and corporation tax of €11 million and expending €80 million in the local economy. Given the company's commitment to Athlone, I am confident that Ericsson will remain a strong employer with a significant economic presence here.

The midlands region, including County Westmeath, has the linked gateway of Athlone, Tullamore and Mullingar and, as such, will continue to be a key location of focus for the winning of foreign direct investment. My Department and its agencies will continue to promote Athlone and the surrounding area for industrial projects and enterprise development. These activities will, in turn, help to protect existing jobs in the area.

Job creation is central to our economic recovery and the programme for Government has this at its core. It is obvious that the Government does not create jobs - entrepreneurs and successful businesses do. However, the Government has a key role to play in providing the environment where businesses can start-up, expand and create jobs. The action plan for jobs, which was launched earlier this year, aims to transform the operating environment for business in order to support enterprise growth and job creation. The Government will achieve this objective by systematically removing obstacles to competitiveness, putting downward pressure on business costs, promoting innovation and trade, supporting new and existing businesses to develop and expand, and deepening the impact of foreign direct investment in Ireland.

In the action plan, the Government has also identified a number of key sectors where Ireland can gain competitive advantage in global markets. The role of my Department is to ensure that we have the right policies in place that will support and grow our enterprise base in order to facilitate both job creation and job retention. The programmes supported by my Department and its agencies will be critical in achieving economic growth and I know that the agencies - Enterprise Ireland, IDA Ireland and the county enterprise boards - will continue to promote Athlone and the surrounding area for industrial projects and enterprise development.

I am convinced that the actions we are taking across Government through this process will result in improvements to the operating environment for business and bring about a reduction in the numbers on the live register, as was shown in the most recent data from the Central Statistics Office earlier this week.

Deputy James Bannon: Information on James Bannon Zoom on James Bannon I thank the Minister of State for his contribution and the fact that Ericsson is fully committed to Athlone and to Ireland generally. This is most welcome. I ask the Minister of State to remember, however, that there are many people in my constituency who suffer from severe depression because they are unable to find jobs. The midlands has probably the highest rate of unemployment to be found in the country at present.

The Minister of State mentioned that the midlands region, including County Westmeath, has the linked gateway of Athlone, Tullamore and Mullingar, but there is no reference to Longford. There is a need to revisit the national spatial strategy that was announced some years ago because it is out of date. Longford and other midland towns are not getting a fair crack of the whip. The Minister of State should consider this matter.

A task force should be set up next year to examine all aspects of employment and the jobs profile of the midlands in order to realise the potential of this gateway, including Longford, to all parts of the country. It has the potential to be a vibrant economic centre. We must at all times be conscious that we have lost two Government Deputies in the midlands. This is indicative of the outrage and despair that the withdrawal of services is causing to the region. The heart is being ripped out of the midland counties. We must acknowledge that this is happening and take action to remedy it. This situation cannot continue. I want to see action with the establishment of a task force to co-ordinate all agencies in order to bring jobs to the midlands, and particularly to my constituency of Longford-Westmeath. I am sure the Minister of State will take note of that and bring my concerns for the midlands to the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton.


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