Dáil debates
Thursday, 7 June 2012
Job Losses
7:00 pm
Richard Bruton (Dublin North Central, Fine Gael)
I thank the Deputy for raising these matters. The expiry of the patent on products manufactured by Pfizer has, unfortunately, resulted in the announcement of the loss of 177 positions in Cork this week. My thoughts are, obviously, with the workers and their families. All the applicable supports of the State will be made available to the workers if they are needed.
I have spoken to the company about the situation. These two quality plants in Cork will still employ more than 500 people and will be adapting to achieve operational excellence and deliver competitive manufacturing for the company. The company has also confirmed Ireland remains a key strategic location. Factoring in this decision, Pfizer will still employ almost 4,000 people in Ireland across eight locations. In September 2011, the company announced a €145 million investment in its Grange Castle site to develop a new site to expand the Irish manufacturing process for an invasive pneumococcal vaccine.
The Deputy is correct that the expiry of patents is a problem for a number of companies. In the case of Pfizer, Lipitor was the biggest selling drug in the world by a factor of two. Virtually all of the API was in Cork, as was most of the formulation. Having other investments in the pipeline, Pfizer is itself adapting to the challenges of products going off patent. IDA Ireland has been working for many years to minimise the threat to jobs posed by products coming off patent and has been seeking to diversify Ireland's pharmaceutical base. Its strategy has been to win leading company investment and to diversify the breadth of operations over multi-product sites, including associated services and development of new compounds. Ireland has been enormously successful in attracting eight of the major global players and the world's number one biotechnology company to manufacture from Ireland. IDA Ireland has focused, in particular, on biopharmaceuticals, which represent the next wave of opportunity in the industry, and has been very successful in attracting leading companies, with the result that Ireland now has a globally leading biopharmaceutical cluster in the next generation of pharmaceutical products.
I have been informed by IDA Ireland that employment in their client companies is surveyed annually by Forfás in its annual employment survey. Between 2010 and 2011 net employment in IDA client companies in the pharmaceutical and healthcare services sector increased by approximately 1,400. This is in the context of an overall net gain in employment of 6,118 in 2011. In the first six months of 2012 alone, Ireland has won five major investments in the pharma and biopharma sectors with the capacity to create 1,175 new jobs. We are successfully anticipating the changes that are happening in this sector, as some products come to the end of their protected life and move on to others.
IDA Ireland has assured me that it will continue to seek to win new investments in the pharmaceutical industry and to win large scale investments in product development and capability to enable its existing client companies take on new product mandates.
The examinership at Atlantic Homecare is disappointing and reflects the difficulties facing some retail operators, particularly those with exposure to the construction sector. My thoughts are with the workers whose jobs are under threat at Atlantic Homecare. As has been publicly stated, the 13 store chain has been losing money for the last five years, with losses of €11 million last year. The company has cited high rents as a factor and it is to be hoped this will be addressed in the course of the examinership.
As Deputy O'Dea pointed out, the examinership process will last several months and the stores will continue to trade as usual during the process. The examiner will be preparing a plan for the survival of the business. The company is engaging with the trade union representing staff interests.
Deputy O'Dea raised this issue on previous occasions. He knows the legal advice to the Government is that the hoped for removal of upward only rent provisions from existing contracts could not be implemented by Government.
Robert Browne
Posted on 11 Jun 2012 8:19 pm (Report this comment)
The answer to this question differs markedly from the advice given before the election. The government were happy enough to state that UORR's for existing tenants or "victims' as deputy O'Dea calls them, would be addressed if they were to assume power after an election. That election took place on the 25th of February 2011 a year and four months ago. It now appears, the government are hiding behind another legal contrary opinion. Since, many barristers, members of the legal profession and indeed politicians in Ireland are also commercial property owners, it is not surprising that such contradictory legal advice is on offer. What is surprising, is, that the government favor this advice over other advice given their stark election promises on this issue.
What precisely is the legal advice? Who exactly is giving this advice and can it be read into the record of the Dail? If other rents cannot be increased automatically any longer then why was this automaticity allowed previously and still allowed? It is my understanding that one of the leading High court judges in the Commercial Courts has questioned the legality of such UORR. The failure to address this issue appears to me to have more to do with taking the line of least resistance...., perhaps even, the government line on this issue has been influenced by a desire to preserve the value of pension portfolio's and of propping up the value of NAMA's commercial property portfolio. As the minister will be acutely aware, NAMA now effectively controls 9/10ths of the Irish commercial property market.
All in all, I think you did not answer deputy O'Dea's question on UORR satisfactorily. This is an issue which has caused many people to become unemployed and will cause more unemployment. It is an issue on which many peoples future employment prospects now hinge. I think a full and frank disclosure of not only where the government stand on this issue, the legal advice given by whom? Also, the "why" is important. Why the government has changed its approach after the election. There is a degree of cynicism among people regarding the governments diametrically different approach after gaining office.
If there was a bona fide legislative impediment to the removal of these clauses, which I very much doubt there is. There certainly is no legislative impediment that could not be removed if the government had a mind to do so.