Michael McGrath (Cork South Central, Fianna Fail)
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At the outset I want to thank the Ceann Comhairle for selecting this important matter for the Adjournment. I also thank the Minister, Deputy Batt O'Keeffe, for taking this matter this evening. Having represented Cork South Central for many years I am aware he would have a strong affinity with the company, GlaxoSmithKline, GSK, and with many of the employees and the management. I thank him for the personal interest he has shown.

Everyone in Cork was deeply disappointed to learn of the news on Monday that 55 jobs were to be lost at GlaxoSmithKline following the completion of the formal business review and also confirmation that another 66 jobs would be lost following consultation with the trade unions and other employee representatives and after changes to shift patterns and so forth. It is clearly a significant blow for Cork and for the pharmaceutical industry in the area, particularly coming on top of recent job losses by Schering Plough in Brinny and also Pfizer in Ringaskiddy in recent months.

The main purpose in raising this is to urge the Government and the Minister to ensure that the people who are directly affected by Monday's announcement at GlaxoSmithKline are given every possible support by Departments and the relevant State agencies. The company intends to implement an out-placement support service for those who will be made redundant, which I welcome. It is in keeping with the company we are dealing with in GSK and I trust that the work by FÁS and the other State agencies will complement the work the company intends to do to ensure that the people being made redundant will be given the required training and every opportunity to find alternative employment, whether it be in the pharmaceutical sector or any other sector.

The second reason I raise this issue is to call on the IDA to work closely with GSK and the other pharmaceutical companies in the Cork region to maintain the remaining jobs because it is clear there are major challenges. It is important to point out that the announcement by GSK on Monday was not to do with the quality of the employees at the plant, the cost base or anything else. It was directly linked to the continuing decline in product demand globally. These companies are operating in a very competitive environment. There has been a decline in global demand for certain products and they must deal with that. The announcement on Monday was a direct consequence of that but even after that announcement, GSK will still have 340 employees left at the Cork plant and my priority - I know it is also the Minister's - will be to ensure we can retain those jobs and also retain the jobs in Pfizer, Novartis, Centocor and all of the other companies that have invested in the Cork area.

I welcome the statement by GSK on Monday in which the vice president, Finbar Whyte, made it clear that the company is committed to working closely with all employees to ensure we are able to safeguard the future of GSK in Cork. That is a very welcome commitment. Ireland has been particularly successful in attracting all of the major pharmaceutical companies to our economy. We want to maintain that presence and develop it further where possible.

I want to comment briefly on the reference by Commissioner Rehn earlier this week on the issue of the 12.5% corporation tax rate. From my perspective it would be economic suicide for us as a country to increase our corporation tax and I welcome the Government's commitment, following the Commissioner's comments, that such an increase will not be considered because it would do major damage to us as an economy.

While the GSK decision was not directly related to the cost base it is important that we are vigilant on the issue of the cost base for all companies, small and medium enterprises and multinationals. I welcome the various initiatives the Minister has announced to do with cutting down on red tape for businesses but we will have to be increasingly vigilant on the issue of energy costs, waste management costs, labour costs, transport costs and the cost of compliance with health and safety and other regulatory requirements, including the cost of local authority rates, water rates and so on.

It is quite simple. Undoubtedly, there is a direct correlation between our cost base as a country and our ability to attract inward investment. If we can maintain the quality of our workforce and our strong regulatory environment while at the same time reducing costs, we will be successful into the future. I look forward to the comments by the Minister on GSK and the employees.

Batt O'Keeffe (Cork North West, Fianna Fail)
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I thank Deputy Michael McGrath for raising an issue on the Adjournment that is of serious concern to all of us. I want to begin by expressing my regret at the announcement by GlaxoSmithKline of the loss of 121 jobs at its Currabinny facility.

GSK currently employs over 1,500 people in Ireland at its various sites in Cork, Dublin, Dungarvan and Sligo. The current job losses are a result of market conditions resulting in a fall in demand for the drugs GSK manufactures in Cork. I am aware that the IDA consistently engages with the company at both local and corporate level in an effort to secure further new investment to maintain and increase the company's base in Ireland. I met representatives of the company last week.

I am acutely aware of the impact of the job losses on employees and their families and share the concern outlined by Deputy McGrath. I have asked the State development agencies to make their full resources and services available to the employees affected by the company's decision. FÁS Employment Services Management, South West Region, will meet with management and staff representatives at GSK to formulate a plan of action to deliver FÁS services and supports to the staff being made redundant in 2010 and 2011. The Cork county enterprise boards, together with Enterprise Ireland, will provide a range of supports and services to anyone wishing to start their own business.

Cork has been particularly successful in attracting foreign direct investment over the years. In the past ten years direct employment in IDA supported companies in Cork city and county has grown from just under 16,000 in 1999 to 20,000 now. In 2009, foreign direct investment, FDI, decreased globally by 30% and the average scale of investment was smaller than in previous years. Despite these trends, since 2009 the IDA has announced nine projects for Cork, with a job potential of approximately 1,070.

The strategic challenge now facing IDA Ireland is to be proactive in identifying future FDI trends and the associated employment opportunities. Every year, an average of between 7% and 8% of jobs within the IDA Ireland portfolio are lost as part of the normal business life-cycle. The reasons for this include competitiveness, market downturn, global economic trends and business model restructuring, particularly as a result of merger and acquisition activity. I assure Deputy McGrath that my priority is to ensure that the business environment is supportive of Irish enterprise and export growth and that we attract high value foreign investment. By selling on international markets, we will create jobs and prosperity at home. While it is clear that we are operating in a difficult economic environment, there are still investment opportunities in global markets and IDA Ireland will continue to compete vigorously for projects for Ireland. I am to accompany IDA Ireland on a visit to North America over the next number of weeks.

In addition, since 2008, Enterprise Ireland has approved approximately €50 million to client companies in Cork city and county. Enterprise Ireland has a client base of over 700 companies in County Cork, employing approximately 18,000 people. I again assure the Deputy that the State development agencies will provide every possible support they can to GlaxoSmithKline employees affected by the company's decision.