Dáil debates

Wednesday, 8 February 2017

4:40 pm

Photo of Pat GallagherPat Gallagher (Donegal, Fianna Fail)
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The next Topical Issue, in the names of Deputies Lawless, Quinlivan, Ruth Coppinger and Heydon, is to the Minister for Jobs, Enterprise and Innovation about the announcement of Hewlett Packard and the future of this facility at Leixlip. Each Deputy, in that order, will have three minutes to make an initial statement, the Minister will have four minutes and then Deputies will have one minute each for a supplementary question. I call Deputy Lawless.

Photo of James LawlessJames Lawless (Kildare North, Fianna Fail)
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I come to the Chamber today directly from Leixlip where I was at Hewlett Packard for most of the morning talking to workers, talking to staff and talking to the various management who were available on site. I was disappointed to note I was the only Oireachtas Member on site. There were no Government representatives present. There is a scrum to get into job announcements and I was disappointed to see the same approach is not taken to job cuts.

As the Minister should be aware, this is a devastating blow to Kildare, to the local economy of north Kildare and to the areas of Leixlip, Maynooth, Celbridge, Naas and the wider hinterland. This is one of the key employers in north Kildare along with Intel, Pfizer, Kerry Foods and others and 500 job losses is a huge hammer blow to those workers and their families and to the wider local economy. As the House will be aware, for every ten jobs generated by FDI another seven are generated as a spin-off. No doubt the local economy will begin to suffer as well. Everything that can be done has to be done to support those workers to begin that process of retraining and re-skilling, if that is required, to support them and put the facilities of the State at their disposal. I would be interested in knowing what package is on the table in terms of supports for those workers, everything from social protection through to retraining through such support services.

The writing was on the wall for this one for some time. The restructuring - it was at HP at global level - was announced in November 2015 of HP Inc. and HP Enterprise. It was well understood globally that 3,000 to 4,000 jobs would be cut. If that was not enough of a signal, the CEO of Hewlett Packard globally, Ms Meg Whitman, speaking at the Davos forum last month, made an announcement, which made world headlines but, perhaps, not the Minister's attention, that jobs and humans would be put out of business by robots and automation. Advanced manufacturing is heading in this direction. That was a fairly strong signal and I would have thought the Department and the Minister would have engaged, even at that late stage, given the amount of signals that had been given, given the presence of HP in Ireland and given its critical importance not only to the local Kildare economy and those workers but to the wider national economy and our economic model.

I want to ask the Minister what engagement she had with HP management. Did the Minister meet them in Ireland? Did she meet them elsewhere, for example, in the United States? If not, why? What contacts had the Minister or her office this week, this month and over the past 12 months, in light of the announcement of November 2015? Given HP's significant footprint in Ireland, did the Minister take immediate steps to engage with the company? If so, could the Minister elaborate on those? What steps are now being taken, in terms of mitigation?

It strikes me this has happened previously. As the Minister will be aware, I represent north Kildare. Intel went through the exact same process approximately a year ago. Once can be forgiven, twice is careless. It is unforgivable. What kind of mitigation plan has the Government? What kind of crisis management is in place? Unfortunately, these situations occur. We need to be prepared for them. We need to have more than we are doing. What is being done?

Photo of Maurice QuinlivanMaurice Quinlivan (Limerick City, Sinn Fein)
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I thank the Leas-Cheann Comhairle for taking this discussion. It is important that he has allowed four of us to speak.

First, my thoughts are with the workers and their families. It is a stressful time for them, some of whom are struggling with mortgages and the daily bills they will have to pay. I spoke to a number of those workers today and they are shattered by the reality of what has hit them with the number of job losses.

Whereas HP Inc. announced in October that it would be cutting 3,000 to 4,000 jobs globally over the next three years, nobody expected that 500 workers would be told today that they will lose their jobs in Leixlip. The scale of job losses announced today has been truly shocking.

The loss of these 500 jobs at the HP Inc. factory in Leixlip will be a major devastating blow, not only to the town but to the surrounding area of Kildare and in west Dublin where many of the workers also live. The area needs to be given priority by IDA Ireland. Education and training courses should be made available for the workforce to help them to find alternative employment.

HP, as the Minister will be aware, has been a major employer in Leixlip since 1995. The loss of these jobs will clearly be a major blow to that area. The site remains and it must be used for alternative employment.

Since HP announced it would be cutting 3,000 to 4,000 jobs globally over the next three years, questions must be asked about what has happened in the intervening period. As the company has clearly stated that it will invest in new market opportunities, we need to know today from the Minister where the jobs are going to? It is also critical that new investment is secured for this area.

The company has also indicated that jobs will be transferred abroad. If possible - I do not see why not - we should start to access the EU globalisation fund as early as possible. The Minister must ensure that the particular opportunity of funding from the EU globalisation fund is not wasted, as was the case with previous large-scale job losses in the State. My city of Limerick is a case in point, where we experienced a devastating loss of jobs in Dell in 2009. It was a textbook case of how it should not be done. If funding is accessible, the Minister should start leveraging it today.

Those who have lost their jobs must be given access to proper education and training courses to help them find alternative employment. It is clearly a stressful time for them and their families, as many will struggle to pay their mortgages and pay their daily bills.

I want specifically to ask the Minister if she briefed Cabinet on the expected scale of losses because some of her Cabinet colleagues seem to be in shock at the number of jobs losses that have been announced today. Rumour was floating around for a number of weeks or months or, as Deputy Lawless referred to, probably longer, that these jobs were precarious and they could be lost. I want to know did the Minister raise this at Cabinet. Did the Minister raise it at the Cabinet meeting this week? When has she raised it at Cabinet?

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Anti-Austerity Alliance)
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Five hundred workers and their families had to find out through the media, the television etc. that their jobs had been lost. These workers are from Kildare and west Dublin and many are from my constituency and other Dublin constituencies and around Leinster in general.

What this brings centre stage again is the massive unique dependency of this country on American-owned foreign direct investment to create employment and the lack of any native industrial policy. As a result, 20 out of 25 companies listed on the NASDAQ stock exchange as companies in Ireland are not Irish companies, 40 American companies account for two thirds of the value of Irish exports and one in five private sector jobs is now IDA Ireland supported through foreign direct investment.

Hewlett Packard is also one of the top two technology companies being investigated in the US Senate for tax avoidance on a massive scale. Obviously, much of this is connected with Ireland.

In total, 100% of its cash reserves are kept out of America, which is even more than in the case of Microsoft or Apple. Loans from its companies abroad subsidise its US operations. The Minister says she has daily contact with the IDA, so perhaps she can answer my questions about the largesse Hewlett Packard has enjoyed from the Irish State and the Irish taxpayer since it came here. How much grant aid has Hewlett Packard received since it located here? How many higher capital and employment grants for locating outside Dublin, for which there is a higher rate, has it received from the IDA? What level of corporation tax is Hewlett Packard paying in this country, when its workers are paying PRSI, pension contributions and so forth? How many high-level Hewlett Packard executives were given State appointments by Fine Gael or the Labour Party in recent years? The reason I ask that question is that in February 2012 Hewlett Packard and the IDA announced 150 Hewlett Packard jobs supported by the IDA in Galway and Leixlip. How many of these jobs were given IDA grants to bring them to this country in the first place? Even if they were not, Hewlett Packard is getting huge assistance from the State for other jobs. In April 2011, another 50 jobs in the cloud services innovation centre in Galway were supported by the IDA.

Hewlett Packard is high on the IDA's list of companies that got grants in 2015. It got the third highest amount of IDA grant aid in 1997. Its profits were $2.7 billion last year. There is no need for these workers to suffer in this way. Many of the company's top executives have been feted by the Irish establishment, as well as receiving appointments within the IDA and in many other places.

4:50 pm

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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I thank the Ceann Comhairle for selecting this important Topical Issue for discussion and for giving me the opportunity to speak on it. I represent Kildare South and while HP Inc. is located in the north of the county, today is a significant blow for all of County Kildare and the adjoining counties where a number of the workers come from. It should be put on the record that although we are discussing HP Inc. now, the jobs in the Hewlett Packard Enterprise element remain secure. That is very important and I urge the Minister to continue to engage with Hewlett Packard in the future to ensure everything can be done to keep the other approximately 1,500 important jobs on site. I acknowledge the supports the Government has provided to the research and development sector in recent years to grow that sector, a reason those jobs remain. Today, my thoughts are with the employees and their families but also with the workers and families in the many businesses in Kildare whose business, or a large amount of it, depends on the spin-off industry and economic activity that happens in this plant.

I wish to focus on the supports the State will provide now. The IDA has a significant role to play. A fine site will become available, unfortunately, and I expect no stone to be left unturned to find an alternative economic activity and employment opportunity for it. Kildare sometimes suffers from a perception of affluence. There is a belief that because Kildare has a great deal of foreign direct investment and is located beside Dublin it is fine. I challenge that myth. We have challenges in Kildare and some of them come from being so close to such a large economy as Dublin's. The Minister must ensure there is not a sense that jobs will come to Kildare because of where it is. No stone can be left unturned to ensure these jobs are replaced by other high level jobs.

Another State support is the Kildare and Wicklow Education and Training Board, ETB, which is ready to support the staff if they require re-training. The European Globalisation Adjustment Fund provides support when 500 jobs are lost in an area. I ask the Minister to work closely with the Minister for Education and Skills, Deputy Bruton, whose Department would make the application to Europe for this support funding. The European Globalisation Adjustment Fund will help staff who need to re-train and will provide approximately 60% of the funding towards that support to the staff who are losing their jobs today and over the coming year. We should seek to tap into that important support if at all possible. The education and training board will support that.

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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I thank Deputies Lawless, Quinlivan, Coppinger and Heydon for raising this issue. Today's announcement by HP Inc. is very disappointing and distressing for the 500 employees of the company and for Leixlip and County Kildare. My immediate thoughts are with the workers and their families. Many of these men and women have been with this company for a long time, which makes this news even more difficult.

The Government and IDA Ireland have done everything possible to avert this decision. I have had contact with HP Inc.’s senior management. The IDA has been in intensive daily engagement with the company. Strong proposals were put forward to try and ensure the continuing presence of the business in Leixlip. Unfortunately, it was did not prove possible for HP Inc. to change course. The decision formed part of a wider global restructuring process - a commercial decision which was irreversible. This is a company-specific issue where HP Inc. is consolidating its core business.

I wish to make it clear that the decision by HP Inc. is purely a commercial one taken by the company. The company’s senior management has been adamant about this. It has nothing to do with Brexit, the new US Administration, lreland’s competitiveness or any other wider economic or geopolitical factor. Unfortunately, as we know from past experience in Ireland, global companies sometimes undertake strategic restructurings which involve the loss of jobs, as in this case.

In conclusion, I emphasise that I am committed to working with my Oireachtas colleagues in response to this.

Photo of James LawlessJames Lawless (Kildare North, Fianna Fail)
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I am very disappointed with the Minister's response. The only thing I will credit the Minister with is her commitment to working with her Oireachtas colleagues and I look forward to meeting her later this evening at the meeting with Members of the Oireachtas from County Kildare.

Apart from that, I cannot find much else to welcome in the Minister's statement. There are no specifics about the support package. There is no commitment to a support package and I do not know what is available in terms of social protection, training and reskilling. We need contact points and dedicated personnel assigned to that. There is no mitigation plan in place. HP Inc. is unfortunate to be the receiver of bad news today. The Minister has mentioned other factors, such as President Trump and Brexit, which do not affect HP Inc. but they might affect other firms. What mitigation or crisis management plan is in place for the future? We had the issue with Intel a year ago, the announcement about HP Inc. today and it might be some other company this year or next year. Is any kind of plan being put together? We need this fast.

I hate to say this but the last time the Minister visited County Kildare she invited members of the council to a photograph opportunity. The time for photograph opportunities is gone. It is time for action.

Photo of Maurice QuinlivanMaurice Quinlivan (Limerick City, Sinn Fein)
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I too am disappointed with the Minister's response. Tonight, 500 workers and their families will go to bed with little or no assurance from what the Minister and the Taoiseach have said today. I asked the Minister specific questions. One of them was whether she had briefed the Cabinet about this. The Taoiseach appeared to know about it five weeks ago, but the Minister for Housing, Planning, Community and Local Government, Deputy Coveney, was quoted in The Irish Timesthis morning and he did not appear to realise the scale of what had happened. He seemed shocked at the number that was announced.

The Minister also did not answer some of my other questions. It is important that whatever State aid is given to workers from the Department of Social Protection is accessible, so they can get it when they need it, and is not tortuous and complex to access, as it can be sometimes. Every effort must be made by the IDA to source a replacement industry for the area to deal with the jobs vacuum that will be left. Will the Minister confirm that she will seek access to funding from the European Globalisation Adjustment Fund as early as possible on behalf of the workers? Can she confirm that the workers will get proper and decent redundancy payments?

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Anti-Austerity Alliance)
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Will the Minister even make a pretence of trying to answer any of the questions we submit for the Topical Issue debate? She arrived with a prepared script and did not bother to respond to any of the questions put to her. I asked about the State grants that are still being provided. The situation is reminiscent of the line from the song "Ordinary Man", by the Kildare singer, Christy Moore, "He still drives a car and smokes his cigar...".

The people who run Hewlett Packard are in receipt of massive incomes which have increased dramatically, and some of them are playing leading roles in State appointments. Lionel Alexander, vice president and managing director of Hewlett Packard, served on the board of the IDA from 2009 to date. He has only just been listed as formerly of that board. Last September, the Minister for Education and Skills, Deputy Bruton, appointed him to the board of the Institute of Technology Tralee. In September 2013, Deputy Burton appointed the managing director of Hewlett Packard Ireland, Martin Murphy, as chair of the Labour Market Council to drive the Pathways to Work programme to get people back to work. Instead of more IDA supports, corporate welfare and tax write-downs that cost the taxpayer, can we, for a change, use public investment to create jobs and develop our own native industrial policy rather than continuing this type of corporate welfare?

5:00 pm

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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The Minister for Social Protection, Deputy Varadkar, has been in contact with the Minister, Deputy Mary Mitchell O'Connor. The Department of Social Protection stands ready to support the employees and their families at this very difficult time. In the Minister's ongoing engagement with the other State agencies, I ask that the Minister and her Department send a very clear message that Kildare is open for business and that it has the talented workforce and infrastructure to be a very attractive proposition for industry and jobs.

It is a key week for business in Kildare given that both North Kildare Chamber of Commerce and South Kildare Chamber of Commerce will hold EGMs during which their members will consider a proposal to merge. I implore both chambers to grasp the opportunity and to see what happened today as a key example of why Kildare would be much better served by one united, countywide chamber of commerce that could tap into all the resources of Kildare County Council, the education and training boards, ETBs, and all the key Departments and have one united voice. I am confident the members of both chambers will do so and I look forward to this positive outcome from this week, which has been a very dark one for Kildare.

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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I will try to answer some of the questions. I have asked the IDA to seek additional investment for the Kildare area in order that these workers can get new jobs. From today, the IDA is marketing the HP Inc. site in Leixlip to interested buyers. Intreo is ready to accept an invitation from HP Inc. to allow a team to work with its employees on the Leixlip campus or in an alternative location. The Department of Social Protection has already phoned and e-mailed HP Inc. management to set this in train.

Intreo will tailor its response to the needs of HP Inc. employees. Its teams will advise the employees on the Intreo process, jobseekers' payments and redundancy entitlements. It will also provide information on other schemes, including rent supplement. Information will be given on the options and assistance available regarding returning to work, short-term enterprise allowance and training and education options. It will involve the Money Advice & Budgeting Service, MABS, and other bodies, as appropriate. Intreo will liaise with the Department of Education and Skills, the ETBs and the further education and training providers.

Enterprise Ireland will also visit the site. There will be a meeting with Deputies, executives of Kildare County Council and the chambers of commerce this afternoon.

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Anti-Austerity Alliance)
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How much grant assistance did HP Inc. receive?

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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I am getting to it. I am being interrupted.

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Anti-Austerity Alliance)
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The Minister has 15 seconds left and she has not mentioned the grants.

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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If the Deputy lets the Minister answer, she might.

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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If the Leas-Chathaoirleach could give me a little leeway, I would appreciate it. HP Inc. has received €62.3 million in grant assistance since its operations were established in Ireland. The IDA will recover any moneys outstanding from the company in line with the legal arrangements in place between the IDA and HP Inc. The total amount that will be reimbursed to the IDA will be approximately €3.9 million. I was asked about the European Globalisation Adjustment Fund. We have contacted the Department of Education and Skills, which has agreed to explore it. Certain criteria apply. It is for companies that make people redundant within four months. In this case, it is 12 months, therefore it will be a difficult case to make, but we will explore it.

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Anti-Austerity Alliance)
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Will it avert the corporation tax HP Inc. pays?

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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I have heard criticism today. Today, 500 people have lost their jobs in HP Inc. Today is not the day for criticising companies. Today is a day for helping workers.

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Anti-Austerity Alliance)
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It is a day for asking questions.

Photo of Mary Mitchell O'ConnorMary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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Hewlett Packard Enterprise is a completely different entity and it employs 2,100 people in this country. Our Department, the IDA and the Government are very supportive of the company and we are very proud to have 2,100 people working there.

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Anti-Austerity Alliance)
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Does the Minister know how much corporation tax the company has paid?

Sitting suspended at 4.25 p.m. and resumed at 5.05 p.m.