Jimmy Deenihan (Kerry North, Fine Gael)
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I thank the Ceann Comhairle for allowing me to raise this matter on the Adjournment.

The number on the live register in County Kerry has increased by over 100% since December 2007. Between then and October 2009, the number on the live register increased from 7,288 to 15,106. In December 2007, there were 3,249 people on the live register in Tralee but this has now increased to 6,269 according to the figures released for October. The increase is due to the decline in the construction industry in the county, in respect of which there has been a reduction in employment from 11,500 in 2006 to 5,125 in 2009. This is a major blow. However, it is also due to the loss of jobs in the manufacturing sector.

In recent years, Tralee has lost most of its manufacturing industrial base, including Denny, Amann, Glen Dimplex, Kleinhuis and Ridgeview. Apart from the development by Shannon Development of Kerry Technology Park, which opened in 2001 and which now supports over 300 well-paid jobs, very few industrial jobs have been created in Tralee, either by IDA Ireland or more recently by Enterprise Ireland since it took over from Shannon Development.

The announcement on Wednesday, 11 November by the management of BERU Electronics that it may have to shed up to 80 jobs came as a major disappointment and a further blow to the local economy. Management at the company confirmed on 11 November that it will reduce its workforce at the Tralee-based operation. The proposal forms part of an overall reorganisation by the group to ensure ongoing competitiveness in line with global economic conditions and the serious downturn in the worldwide automotive industry.

The company said in its press release that it intended to enter consultation with staff to protect the employment of approximately 120 people at its Tralee plant, where 200 are currently employed, and that the reorganisation may involve some 80 redundancies among the workforce. It stated also the redundancies would be in order to avoid possible closure of the facility, which is currently loss-making.

The management stressed in its press release that the company remains committed to its operations in Tralee, where it has been located since 1985. The initiative it proposes is designed to bring costs into line with overall economic conditions and to return the Tralee-based facility to profitability based on current and future expected sales volumes.

In the press statement, the plant manager, Mr. Paddy Lange, said the company must address the over-capacity that exists in the company's international production facilities. He stated that while this has already involved plant closures in places such as Italy, Hungary, Mexico and Korea, and job losses in other countries, the company is hopeful of sustaining and securing the future of its long-standing operations in Tralee as market conditions improve.

I call on the Minister of State, Deputy Conor Lenihan, to convey to the Minister that it is very important that IDA Ireland and the Department of Enterprise, Trade and Employment provide every support possible to the company to help it survive. I welcome the fact that the Department has approved the employment subsidy scheme for the company. This will no doubt help.

I call on IDA Ireland, through the Minister, to try to provide resources to the company to help it research and develop further products. It is critical that the company look to other areas in the automotive industry in order to create further jobs and possibilities. I hope new opportunities arise on foot on an upturn in the industry globally. I hope the Minister of State has a very positive response. Tralee and Kerry as a whole have been devastated by job losses. We must create new jobs, which is very difficult, and at least protect the existing ones.

Conor Lenihan (Dublin South West, Fianna Fail)
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IDA Ireland was informed on Wednesday, 11 November 2009 that BERU was announcing the impact of the decision made in June 2009 by BERU Group to transfer the quick-start glow plug line from Tralee to Germany. An announcement was made that afternoon to all staff updating them on the future of the Tralee plant, which will include the likely loss of up to 80 employees at the plant and the timing of the transfer, which is scheduled for February next year.

BERU Manufacturing GmbH was established in Tralee in 1986 by BERU AG, Ludwigsburg, Germany. BERU is now 100% owned by Borg Warner Incorporated, Auburn Hills, Michigan, United States, which purchased a controlling 60% stake in BERU in 2005 and purchased the remaining share in May 2009.

BERU was founded in 1912 and it is one of the leading manufacturers of diesel cold-start systems with an estimated world-wide market share of 40% for glow plugs. In the field of ignition technology for petrol engines, BERU is one of the four major manufacturers in Europe. The electronics and sensors division provides focuses on electronic systems solutions for the automotive industry. The company also produces sensor technology and ignition systems for the oil and gas burner industry.

IDA Ireland approved assistance towards the start-up of the operation in 1986 and a major expansion of the plant in 1999. Employment grew to a peak of 300 people in 2000 and the company currently employs 204 in the manufacture of diesel glow plugs and electronic sensors.

BERU is suffering badly in the current automotive industry downturn. Since the end of 2007, the company has been focusing on reducing costs. It released its results for the period January 2009 to March 2009 on 14 May 2009 and they showed a decline in first-quarter revenues of 38% and a decline in earnings before interest and taxes of 73%. Employment in the group reduced from 2,461 in the first quarter of 2008 to 1,898 currently. The group has closed plants in Hungary and Italy.

In line with the company's cost cutting, the Tralee plant has had to make significant progress in respect of lean implementation and process improvements to strengthen engineering capability. In April 2009, the Tralee plant announced 20 job losses but a visit by the BERU CEO in January confirmed the group's commitment to the plant. However, following the deterioration in revenues and earnings, the group reviewed its production operations which lead to the recent decision.

IDA Ireland is working closely with the company to secure new investments and to protect the remaining 120 jobs. The locations that IDA Ireland is focusing on in Kerry are the national spatial strategy-linked hub locations of Killarney in south Kerry and Tralee in north Kerry.

IDA Ireland's strategy for County Kerry is to work with local authorities and relevant infrastructure and service providers to influence the delivery of appropriate infrastructure to the region; to progress the development of a knowledge economy so that the region can compete both nationally and internationally for foreign direct investment; to work with the existing IDA client base and to help it to further develop its presence; and to provide modern property solutions with supporting infrastructure.

The recognition under the national spatial strategy of the importance of Killarney and Tralee as linked hubs will assist IDA Ireland in promoting the region for inward investment. It will also assist in the development of the necessary critical mass needed in terms of population, skills and infrastructure.

Kerry has traditionally been a centre of manufacturing for foreign direct investment. However, over recent years it has proved challenging to maintain and attract overseas manufacturing companies into the county as much of this investment globally is going to low-cost destinations such as eastern and central Europe and China. As a result of this locational shift in global manufacturing, Kerry has seen a number of closures within the multinational sector. At the end of 2008, there were 15 IDA Ireland-supported companies in Kerry employing approximately 1,798 permanent staff.

IDA Ireland promotes Kerry as part of an integrated region with access to the county population base of 139,616 in addition to the expanded population of both the mid-west and south-west regions with a combined population of 935,039. Based on the strengths of the region, IDA Ireland is particularly targeting the ICT sector, including the software sector, and the international financial services and globally traded business sectors. To support this strategy, IDA Ireland is working closely with educational institutions in the region in developing the skill sets necessary to attract high value added employment to the county. The IDA is also working with FÁS to provide guidance in developing the skill sets needed by those in the workforce who are interested in upskilling.

It continues to market all available land and buildings in the county including its 12 acre business and technology park at Tiemaboul, Killarney, County Kerry. In Tralee, the IDA is also marketing the Kerry Technology Park which is owned and managed by Shannon Development in partnership with the Institute of Technology Tralee.

In addition to attracting new foreign direct investment, the IDA continues to work closely with its existing clients in Kerry to encourage them to expand their operations in the county. An example of this is the recent announcement in September 2008 by Aetna that it is to expand its existing operation with the addition of 70 jobs in Castleisland.