A manufacturing operation is opting out because its Irish plant is more expensive to operate than any other of its plants worldwide, writes HELEN DOWNES
THE TREND in Ireland when jobs are lost to another jurisdiction is to gather the troops and set up a task force to seek redress. The opportunity to address the real cause of the problem (in most instances Ireland’s failing competitiveness) is lost. The company and its associated jobs are gone forever. Retaining valued employment in Ireland and rebuilding the nation’s ability to compete on a world stage is no longer an option; it’s a necessity.
While the recent report of the Mid-West Task Force sets out a list of concrete actions that would help the Shannon region – such as improved infrastructure, energy supply and education – the thought behind all of these is simple and singular: our economic recovery will come if we can sell goods and services of the right quality at the right price to overseas customers.
The Irish people showed extraordinary resolve in the late 1980s and early 1990s to do precisely this. As a result, from 1993 to 2000, we had strong economic growth which was sustainable and “reality based”. For a variety of reasons we lost our way in the period 2000 to 2007: we allowed costs to rise without the necessary productivity increases; we became less competitive; and in simple terms we lost business on the international stage.
This is exactly what’s happened in the most recent proposed company downsizing at Shannon. The story that is unfolding in Element Six is the story of Ireland in microcosm. A manufacturing operation is opting out because it was more expensive to operate in Ireland than any other of its plants in the world.
The simple fact is that it has found Ireland to be more expensive than Sweden, Germany, the Netherlands, the UK, South Africa or China. Seeing 370 jobs about to disappear, the Irish-based management took the audacious initiative of asking their international board to give them a little time to generate a plan that would save 163 of those jobs. They secured agreement for a plan that could go ahead without any reductions in pay for staff. It would secure what Ireland needs: that is, high-end, long-term jobs focused on internationalisation. If we could get this, and other exporting businesses back to being competitive, Ireland would bring itself back to prosperity as we did so courageously in the 1990s.
Yet everything has a price. The price of keeping the jobs in Element Six and other troubled businesses is that everyone working there must understand and appreciate Ireland’s competitiveness dilemma. Unless we get it right now, future generations will feel the impact.
It may well mean new work practices and accepting things which would not have been considered some decades ago, or even last year.
It is entirely understandable that those working in such companies will feel shocked, aggrieved and even angry, but that same feeling of loss is also being felt by hundreds of thousands of people in Ireland who have taken cuts in income at work or who have lost their jobs; some are even working for nothing to keep themselves focused in the hope of being gainfully employed in the future.
The issues current in Element Six starkly present what faces the whole of Ireland. With powerful economies to our east, now aggressively competing in the global market, it is much more difficult for Ireland to be competitive than it was some decades ago. The world has changed fundamentally.
Shannon companies, many of whom are members of Shannon and District Chamber, have had to face adversity in the past and will do so in the future. Those that have adjusted to meet the market have survived; those that have not have disappeared.
The chamber is heartened to now see ongoing engagement between all parties in Element Six. What way the dice will fall is in the hands of those taking part in this engagement.
They are being closely watched. A positive outcome will retain jobs in Ireland; a negative outcome could have long-term repercussions for Shannon as a business location, for employees, sub-suppliers, families, the Government and Ireland generally.
Both sides should enter these discussions in good faith and keep their eye on the longer term. If, as I hope, the employees and management agree to a sustainable plan, they will have set down a strong example for all of us. A key player in an internationally recognised sector will remain in Shannon providing a new base to build upon; and Shannon will, once again, have taken a bold step for the future. If they fail and 370 jobs are lost, the signal this will send to the wider world is too appalling to contemplate.
Helen Downes is chief executive of Shannon and District Chamber of Commerce