Dáil debates

Thursday, 19 October 2006

Adjournment Debate

Job Losses.

5:00 pm

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Yesterday's confirmation that approximately 450 jobs are to be lost at Cadbury over three years is a shocking hammer blow for Coolock and Dublin's north side. Of the 1,500 member workforce at Cadbury, workers in Rathmore, County Kerry, and in Tallaght in west Dublin, will be affected but as 1,100 workers are based in the Coolock plant the most serious impact will be felt there.

My first thoughts are with those workers and their families who face the prospect of being made redundant over the coming months and years. This will be particularly difficult for many of the senior men and women who have worked at the factory for decades. These job losses will deeply affect Coolock district and its environs where in some areas there is up to 20% and 25% unemployment, despite the Celtic tiger. Cadbury has a decades-long connection with Coolock since its arrival in Ireland in 1932 and the factory on Oscar Traynor Road is a famous local landmark, providing work for generations of people.

People were always interested in working for Cadbury with intense competition for jobs as the company provided good wages and working conditions. Cadbury executives also supported employment initiatives undertaken by the Coolock Development Council, of which I was the first chairman in the mid-1980s, the Northside Partnership and the Northside Centre for the Unemployed. Their assistance was very important in the early days of those organisations and from that point of view too yesterday was a sad day.

Cadbury management has said it intends to undertake a change programme which will involve the investment of €100 million over the next three years and that it has invested €80 million since 1999 to restore competitiveness. I hope it follows through with this and new technology and that the remaining 700 or 800 jobs will be secure. This hammer blow to our region comes on top of a steady haemorrhaging of jobs from the local industrial estates, particularly Clonshaugh Industrial and Business Park which has lost dozens of IT companies to eastern Europe and Asia over the past seven years. These include flagship companies such as Gateway 2000 and Data Products, and Saronix and Terradata. Most of these businesses have not been replaced and their factories are lying empty. Over a year ago, when Tayto closed its famous north side factory with a loss of 98 jobs, I raised the issue of the failure of the IDA to attract jobs to the north side and urged Sean Dorgan urgently to change the IDA policy of directing jobs away from Dublin's north side. There is a need for less skilled jobs to be aimed at areas of high unemployment. So far that message does not seem to have got through to either Mr. Dorgan or the Fianna Fáil Party and the Fianna Fáil-Progressive Democrats Government.

The disgraceful rise in energy costs of well over 100% in gas prices for example and 60% to 70% in electricity during the lifetime of this Government has put a significant strain on business. The organisation for small and medium enterprises, ISME, describes the rising cost of energy as the "number one enemy" for business in this country. The Irish Exporters Association referred to "the unacceptably high increases in the cost of energy supply" which the Government needs to address urgently. IBEC has stated that perhaps 120 companies with over 52,000 workers are directly in danger of major pressures and downsizing, or even closure and liquidation, due to escalating energy costs.

Yesterday was a sad and regrettable day for Coolock and for the whole northside region. It is time for the Taoiseach and the Minister for Enterprise, Trade and Employment, Deputy Martin, to come forward with a strategy for our region to address competitiveness and energy costs and to implement it quickly. The organisations to which I referred earlier, in particular Northside Partnership, its chief executive officer, Ms Marion Vickers and chairperson, Mr. Willie Hamilton and their staff, the Northside Centre for the Unemployed and Coolock Development Council will be willing to liaise closely with Cadbury's management in respect of any retraining and reinstatement of workers affected by this restructuring programme. I urge the Government and Government Deputies to give the strongest possible financial and other assistance to the local organisations to enable them to do so.

Photo of Martin BradyMartin Brady (Dublin North East, Fianna Fail)
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Since the 1930s Cadbury has been a pivotal employer in the Coolock area and north-east Dublin. It has served the area well both in good and bad times. It was seen to be a privilege to work there. Cadbury is an institution in that part of Dublin, as well as one of the best known brand names in the country. In many cases, three generations of families have worked at the factory which employs 1,400 people.

From time to time, companies must modernise, streamline and restructure their operations. Like Deputy Broughan, when I first heard the news of the job losses, I was aghast at the swiftness of the decision. In a letter I received from the chairman of Cadbury yesterday, I was informed the 450 job losses will be on a phased basis over three years, hopefully on a voluntary basis. I contacted the office of the Minister for Enterprise, Trade and Employment and was assured the full details of the Cadbury package will be made known. As a former trade union official with the Communication Workers Union, I was involved in working out voluntary redundancies and early retirement schemes, and it is not as bad as some may believe.

The Minister assured me he will meet the unions, the workers and management of Cadbury. With an announcement like yesterday's, an unsettled atmosphere can be created among the staff who remain. People often ask who will be next to be laid off. I want to know what is planned for the next 15 years in Cadbury. I understand the company must streamline to be competitive to ensure it can give good employment in Coolock.

I recall when more than 60 people were laid off from a plastics factory in Coolock. FÁS retrained many of these workers and redeployed them in employment in their own area. I hope the same can be done for those affected in Cadbury. Cadbury must consult the Department of Enterprise, Trade and Employment and the employment agencies to ensure the workers are well informed of their options before the job losses come into effect. The Minister has informed me consultations will take place to reassure those not affected of their continued employment at the plant. As a former trade union official, I joined Fianna Fáil because I believe it is the party that protects the workers and will continue to do so.

Photo of John BrowneJohn Browne (Minister of State, Department of Communications, Marine and Natural Resources; Wexford, Fianna Fail)
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When the Minister for Enterprise, Trade and Employment, Deputy Martin, returns from abroad, he will meet Deputies Broughan and Martin Brady to discuss this issue. Both the Minister and Enterprise Ireland were aware for some time that the company was carrying out a strategic review of its operation in Coolock. It was only completed recently. During the course of the review, the company chairman, CEO of Enterprise Ireland and senior management from both organisations have been in discussions.

The Coolock facility is one of 11 similar facilities Cadbury has in Europe, the Middle East and Africa. Concern was expressed at the high level of operating costs at the Coolock plant and it was decided its current business model was unsustainable. Cadbury was faced with either the full closure of the operation in Coolock or to streamline and increase efficiencies. The latter option will require a reduction of 400 to 450 jobs on a voluntary basis over the next three years. Management and the unions will discuss the best way to achieve this. I am heartened by the commitment given by the company to the long-term future of the Coolock plant.

The Government is conscious of the effects the job losses will have on the workers involved, their families and their community. It is distressing news for those who will lose their jobs. The relevant State agencies will provide every support they can. The priority will be to find alternative employment for those involved at the earliest opportunity. The role of FÁS will be of particular importance in providing support and assistance to the workers concerned. The Minister for Enterprise, Trade and Employment, who is abroad on official business, has been following the case. Enterprise Ireland has been working closely with the company for some time.

There is a significant churn in employment. Traditional low-cost industries are under pressure and are closing, while other industries, especially the service industry, are providing much employment. In the past six years, more than 440,000 jobs were created in services and 150,000 jobs in high-end manufacturing, a significant turnaround in the nature of employment. Long-term, sustainable economic growth and expansion in employment depends on a competitive and adaptable economy. The effects of globalisation are felt in even the smallest markets and global competition will intensify and extend its reach. The Government has recognised the inevitable changes taking place across world markets for both trade and investment. Enterprise policies that equip companies with the ability to better compete in world markets, capture the opportunities from globalisation and build competitive advantage in innovation and knowledge have been central to policy development.

The impact of globalisation on Ireland has to be put in perspective. In the past eight years more than 523,000 people have been added to our workforce, an unprecedented growth of 35%, with more than 2 million people in employment. Job relocations, which inevitably arise in the globalised marketplace, are far exceeded by new job creation, usually accompanied by better paid high skilled employment. Furthermore, unemployment continues to fall.

The best response to globalisation is to ensure Ireland remains attractive for investment and enterprise growth. As the economy has matured, foreign direct investment incentives have been tailored to match our strengths. Low wage costs are no longer an enticement but have been replaced by other attractions. These include a benign tax and regulatory environment, a better educated workforce, an improving infrastructure and a commitment to world-class standards of research, development and innovation. Maintaining and improving upon these standards is vital to sustaining Ireland's competitiveness.

The IMD world competitiveness scoreboard ranked Ireland as the world's 11th most competitive economy in 2006, up one place on last year's position. The agencies under the Department of Enterprise, Trade and Employment are working to maintain Ireland's attractiveness to foreign investment while assisting indigenous industry. In 2005, the IDA supported more than 50 research and development projects related to business investment to the value of more than €275 million, a record both in number and value for the agency. Enterprise Ireland has introduced a productivity improvement fund for indigenous enterprises to improve levels of productivity through technology acquisition or labour force training. In 2005, Enterprise Ireland helped 515 client companies invest more than €100,000 each in meaningful research and development, with 33 companies investing more than €2 million. With this and other assistance, Enterprise Ireland is making significant progress in helping Irish enterprises to improve their export performance, with growth of 7% in 2005 and 15% in exports to Asia.

Dublin has been a success story in terms of foreign direct investment, FDI, with a critical mass of population, skills pool, educational infrastructure, international access connections, existing business activity across all sectors and extensive property solutions for future activity. New company arrivals in 2005 included Google, eBay, Kellogg and QLogic and, in 2006, SanDisk, Actel and Sage.

The Government strategy for Dublin is to progress the development of a knowledge economy so that the region can compete both nationally and internationally for foreign direct investment; work with the existing client base in Dublin to encourage it to expand and diversify into higher value added goods and services; act as a broker with the higher education authorities, key client companies and Science Foundation Ireland to encourage further research and development; provide modern property solutions with supporting infrastructure; and work with local authorities and other relevant agencies to influence the delivery of the necessary infrastructure in the county.

In 2005, there were 474 IDA companies in Dublin employing 48,178 people. The capital has traditionally been a centre for manufacturing industry for FDI. In recent years, however, there has been a shift away from manufacturing, due to cost competitiveness, to more knowledge-based higher value-added projects in fund management, e-commerce, software and high-end back office services. I assure the Deputies that the industrial development agencies will continue to promote north Dublin in order to create sustainable investment and job opportunities in the future.

I again apologise for the absence of the Minister. His officials have assured me he will meet both Deputies to discuss the matter further as soon as he returns.

The Dáil adjourned at 5.20 p.m. until 2.30 p.m. on Tuesday, 24 October 2006.