US technology firms Gateway, Xerox and General Semiconductor have together paid back €27 million in grants this year following the closure of several facilities during 2001, figures released yesterday by IDA Ireland show.
The Government has received almost €36 million in refunded employment grants so far this year from firms that have either closed or rationalised their operations. This is more than double the €16.8 million in repayments made by firms during the whole of 2001 - of which €15 million was returned by US telecoms group Motorola following a review of plans for its Irish operations. The sharp rise in grant refunds this year reflects the severe impact that the global economic downturn is having on job numbers in the Republic.
The largest single payment was made by the US computer company Gateway, which repaid €11.1 million in grants to the IDA in April, following the closure of its plant in Dublin in 2001.
General Semiconductor, which announced in April 2001 that it would close its facility in Macroom, Cork, has repaid €9.2 million in several tranches in 2002.
Likewise, the US firm Xerox has paid back grants worth about €8.6 million to the IDA following its decision to close a manufacturing facility in Dundalk with the loss of 400 staff. It is understood Xerox still owes the IDA some grant aid and this is a matter for further discussion between the two parties.
In an interview today in The Irish Times, Mr Joe Browne, Xerox's director and general manager, Ireland operations, Europe, said the grants issue had not taken a minute of his management time. "I'll be very honest with you. The grant is incidental. It is not a big number in the scheme of things."
All monies repaid by companies to the IDA are given back to the Exchequer's central fund.
An IDA spokesman said yesterday it was impossible to work out how many jobs were lost as a result of the €36 million payout, as the cost per job figure for IDA-supported firms had changed dramatically over the past 10 years. But he said the agency was committed to pursue grant repayments if companies failed to deliver on the terms of their employment contracts drawn up with the IDA.
"Our policy over the last 15 years has changed radically and we are now insisting that parent companies sign guarantees with us rather than the Irish branches," he said. "IDA Ireland would pursue firms who do not pay up in the courts."
The IDA's annual report shows some 17,000 jobs were lost during 2001 at multinationals, a jump on 9,000 the previous year. In 2001 the IDA paid out €109 million in employment grants to companies investing in the Republic, down from €150 million the previous year. This year the IDA will pay out multi-million euro grants to multinational firms such as Wyeth and Intel, which have both committed to creating jobs.
Meanwhile, job cuts in the technology sector in the US eased by 31 per cent during the third quarter, according to a survey by the consultancy Challenger, Gray and Christmas. The report shows cuts in the sector totalled 91,450 in the third quarter, down 31 per cent from the previous quarter.
• See interview with Mr Joe Browne, director and general manager
of Ireland operations
