Dáil debates

Tuesday, 18 June 2019

Saincheisteanna Tráthúla - Topical Issue Debate

Jobs Protection

6:10 pm

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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As the Minister of State is aware, Analog Devices is one of Limerick's biggest employers and the main European base for the Analog Devices company, which has its headquarters in Massachusetts in the United States. Recently the American Government blacklisted a Chinese company preventing it effectively from purchasing American made parts and components. Analog Devices makes semi-conductors for smartphones produced by that company and is a huge customer. The decision by the American Government to prevent the Chinese company continuing as a customer of Analog Devices has created great uncertainty and confusion in the region. We are informed that the company has arranged a three or up to five day shutdown to take place in the next week or two. Staff have been told take holidays during that time and staff who have used up their holiday are told they will have to unpaid leave. This is to prevent Analog Devices building up an inventory because of the uncertainty surrounding it. Analog Devices is one of the best employers in the mid-west region, employing 1,200 people in well paid jobs. That accounts for 1,200 families.

If anything happened there, there would be a ripple effect throughout the economy of the mid west because many smaller companies and contractors etc. depend on the business they do with Analog Devices. It would have a devastating impact on the economy of the region. We have done pretty well in recent years but this would be a massive setback. I raise this matter to bring to the attention of the Government what is happening. Is the Minister of State aware of the situation? Have any discussions taken place between his Department and Analog Devices in Limerick, which has refused to issue a statement? Have any discussions taken place with the American authorities or with the enterprise agencies here?

The real reason I am raising this matter is because of the anxiety and distress that these developments have caused in the mid-west region. Does the Minister of State have anything to say that will reassure workers and their fear and uncertainty about their jobs into the future?

6:20 pm

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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I thank the Deputy for raising what he rightly pointed out is an important issue. I am aware of the reports of a planned, temporary cessation of operations at the Analog Devices plant at Raheen in Limerick. I know many employees who work in what is a great company, with 1,200 or more employees in the region. As the Deputy rightly said, it is the European base of Analog Devices.

I want to emphasise to the Deputy that I understand the concerns in connection with this. I know well how important an employer Analog Devices is in the region. IDA Ireland has regular contact with the company. Our understanding in the Department remains that this is a short-term measure which is being implemented across Analog Devices' global sites and that there have been no long-term concerns raised over its Irish operation. Of course, the Government will continue to assess the wider situation and keep the matter under review. I understand that this measure is being implemented across the company's global sites due to the current uncertainty in the market arising from the tensions in the trading relationship between the US and China. Ireland is not the only country affected by this. While I appreciate the concerns that have been generated here, particularly around the mid-west region, it would not be appropriate for me to comment or speculate on an operational decision by a commercial entity. What is clear, however, is that trade-related measures taken in other states can have far-reaching effects beyond those borders. Consumers, suppliers, third party firms and most of all employees are all affected by such scenarios. That has been the situation with the case in hand.

Ireland's economy, as we all know, is outward-facing and export-orientated and reliant to a large degree on global foreign direct investment, FDI. While that serves us well in terms of employment and our economy, it also means we can feel the effects of geopolitical developments from time to time. We have all seen the effects of that in the mid-west and in other areas as well. The Department and I, as a Minister of State in the area, together with the enterprise agencies, IDA Ireland and Enterprise Ireland, are monitoring the situation closely, as is our Embassy in Washington DC. The Department is also assessing any other direct and indirect implications for Irish based companies that may arise, especially given the broad and complex global value chains that underpin the operation of the information and communications technology and telecommunications sectors. While I appreciate recent events have been concerning, we need to remember, as the Deputy rightly said, that there is a lot of investment in the region. We know the situation remains fluid and the Government will continue to follow developments closely.

As the Deputy said, moreover in the mid-west region, the situation is good. There are many high quality jobs in IDA Ireland supported companies. Since 2010, the number of staff at IDA Ireland supported firms in Limerick has increase by 82% to almost 12,000 last year. Last year alone there were over 1,400 gross new jobs created by IDA Ireland companies in the region. In recent times we have seen significant investment announcements in the area from other top companies such as Edwards Lifesciences, Regeneron, STATS and Johnson & Johnson.

The overall trend in job creation in Ireland is extremely positive. The year 2018 was another record year for the State in FDI-driven employment and investment. This will continue strongly in the coming year. We are conscious of the situation worldwide, particularly with the trade war between the US and China and the situation between Huawei and the US. It is something that we are monitoring closely and as I said to the Deputy, I know that IDA Ireland is in close contact with the company in Limerick.

Photo of Willie O'DeaWillie O'Dea (Limerick City, Fianna Fail)
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I thank the Minister of State for his reassurance that IDA Ireland is in close contact with the company. I want to ask the Minister of State a couple of questions. He says this will be a short-term close down. What evidence does he have to support that? There is a great deal of uncertainty out there. The reality is that people do not know whether this will be short-term or otherwise. The Minister of State cited the figure of 1,400 gross jobs being created last year. The number of jobs lost has to be deducted from that, which was in the region of 200 to 250. At one fell swoop this will wipe out all those gains and do more damage because it is 1,200 direct jobs and a great many more that we cannot count at the moment. We cannot assess the amount of jobs that will be lost indirectly. In his recent discussions with US President Trump, did the Taoiseach raise the issue of how decisions being taken by his Government are affecting investment in our region, which is heavily dependent on foreign direct investment, particularly from the United States, of which the Minister of State is as aware as I am?

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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As the Deputy knows, US foreign direct investment is important in Ireland. Some 70% of FDI comes from the US. That is how important it is and we value all the US investment we have in this country because in the region of 150,000 people are employed as a result of it.

On the Taoiseach's meeting with President Trump, as the Deputy knows, the meeting was quite short but my understanding from my officials is that the issue was raised but they obviously did not go into it comprehensively. The Deputy will remember back to 2008 when the threat to Dell jobs was evident in Limerick. Both the Deputy and the then Minister, former Deputy Mary Coughlan, travelled to Texas to see what they could do about this. This is a totally different situation because it affects nearly 15,000 employees of Analog Devices worldwide and it is important to point that out.

I refer to trade wars and the Deputy will agree with me on this. All trade wars are settled in the end. It is in the interests of the US and of China to address any concerns they have. We have seen this before with Aughinish Alumina in Limerick as the Deputy knows. It was because of that special relationship we had with the US that we were able to lift the sanctions on Mr. Deripaska. That may have been a different situation to Analog Devices, however. This is an IDA Ireland company, it is a flagship company and it makes the chip devices for Huawei, as it does for other companies. President Trump signed this executive order on 15 May, as the Deputy knows.

I reassure the Deputy that as a Minister of State in the area, I am concerned about developments such as this, as is the Government. Matters that happen on the geopolitical stage affect every country, big or small. It will affect the European Union and it will affect the whole global stage. Much of that is outside our control but that relationship we have with the US will stand to us should a disaster happen. I do not believe it will, however. This is a short-term measure and we have to look at it as such. If the situation deteriorates then it will be a different matter but at the moment I assure the Deputy that everything is being done by IDA Ireland to ensure the viability of this company moving forward.

Sitting suspended at 5.40 p.m. and resumed at 5.45 p.m.