Xerox review may affect investment at Dundalk

Employees working at the Xerox Technology Park in Dundalk, Co Louth, which is scheduled to be completed by 2002 and should employ up to 2,100 staff.

Xerox is conducting a worldwide review of its manufacturing operations which could mean a scaling back in investment at its $500 million (€598 million) development in Dundalk.

The plant in the Co Louth town should be completed by 2002 and employ up to 2,100 staff.

Mr Joe Kelly, head of public relations at Xerox Europe, confirmed yesterday that a task force was reviewing manufacturing operations and "looking at its investment strategy again". "Nothing is ruled in and nothing is ruled out in the review," he said. "It's too early to say what will happen."

But Mr Kelly said there was a strong possibility Xerox would have to sell or outsource certain manufacturing operations at some of its 12 centres worldwide.

Xerox wants cost reductions of about $200 million in its manufacturing and design operations as part of a $1 billion global cost-cutting plan.

It is understood representatives of Xerox Europe will meet Mr Sean Dorgan, chief executive of IDA Ireland, next week to discuss future plans.

The future of Xerox's shared services and European business service centre, which employs around 1,600 in Dublin, is thought by company insiders to be more secure. The consolidation in Dublin of services for Xerox's European operations had led to significant cost reductions for the company, said Mr Kelly.

In contrast, Xerox's Dundalk plant, which employs 700 people, is one of only 12 manufacturing units worldwide facing major cost cuts.

Another factor which could affect the plant's future is its concentration on ink jet technology. The facility is scheduled to supply 65 per cent of Xerox's global needs in this area within years.

Mr Kelly said this was one line in which the group had specifically stated it was looking for an equity partner to share investment requirements.

An IDA spokesman said last night the agency was hopeful Xerox's restructuring plans would not affect adversely its plans for the Republic.

"We are taking a wait-and-see approach and are hopeful that further corporate reorganisation by Xerox could be good for Ireland," he said.

Xerox has already received about £12.5 million (€15.88 million) in grant aid from IDA Ireland and will receive substantially more if it meets specified job targets. These are set at recruiting 3,600 employees by 2003 and a full complement of 4,100 employees by 2005.

Any failure to deliver on its employment targets would result in a reduction in grant aid; a decision by Xerox to pull some of its investment from the Republic could result in it having to pay back some grants.

Xerox's $700 million investment programme in the Republic was designed as a means of cutting costs by centralising its European operations.

A spokesman for Xerox in Ireland said further details on the implications for Irish operations would be made public shortly.

He said the company would announce the appointment of a new general manager for Xerox Europe within the next couple of weeks following the resignation last June of Mr Aidan Donnelly.