Clonmel is bruised but not out, says its resilient workforce

The news for Clonmel was brutal in its content and in its delivery. On Wednesday a decision reached in a Californian boardroom shattered modest dreams in an Irish town. Eleven hundred permanent staff and 300 temporary workers lost their jobs.

They were messing up the bottom line. Their Far Eastern counterparts did the job for a third of the price. Seagate Clonmel lost $63 million in two years. Worldwide the company lost $240 million in the last quarter.

Who would guess this was the same company that boasted more than $100 million profits on $2 billion revenues in one quarter in 1996? Or that the $63 million dollar Clonmel losses included start-up costs? Or that the company was well aware, long before the Clonmel start-up, that the cost ratio of an Irish worker to his Far Eastern counterpart, as quoted to this reporter by the company, is 12:1?

The firm insists the Clonmel decision was a good one at the time.

"The dynamics have been absolutely reversed since then. The margins collapsed, there is an excess of supply," said Mike Greally, executive director for human resources in Europe.

Nonetheless, somebody somewhere got it massively wrong. They calculated that European customers would pay a little more to have a disk-drive plant on their doorstep. But the problem, said an industry source, was that typical plants in the Far East required up to 5,000 assembly-line workers to meet targets.

The trick then was to locate in Ireland, where by combining an educated workforce and high-tech, sophisticated automation, they could reduce the workforce to 1,000.

It didn't work. Possibly because the technology never quite lived up to the dream, possibly because Seagate hired people "that are not the best in their field", in the words of a source. And possibly because they didn't pay enough.

In any event, 10 per cent or less of Seagate's Clonmel investment was devoted to research and development. Some believe the rapid start-up probably led to short-cuts in recruitment and decision-making.

It is all academic to those employees who hardly slept on Wednesday night and rose early next day to cancel apartment rentals and imminent house purchases around the town.

No one anticipated the final shattering blow, or the scale of it. Only this week some workers were given plans showing how their pay would look in four or five years' time. But on Wednesday they were summoned to a meeting. Some got no phone call and heard it first on the evening news. The 300 temporary staff, some employed full-time since January, never entered the reckoning.

Temporary staff would be gone in a week or so. Permanent staff could lick their wounds in company time till February. No warning to the county manager, the mayor or the chamber of commerce. Even the Tanaiste, Mary Harney, who received the news the same afternoon, was shaken.

For some it was the second disaster. They had worked for Digital, which once inhabited the same space. It had closed. But Digital did things differently, managing its closure humanely and generously.

It phased the plant out over 18 months, keeping its staff informed of every step, involving them intimately in the blow-by-blow fight for survival.

Some 120 houses went on the market as it closed, but Digital set up its own holding company to purchase them at market value, freeing the owners to move on to new jobs. Former Digital workers recall a mutual respect between senior management and staff.

Above all, said an industry source, Digital, like Hewlett Packard, IBM and Intel, invested significantly in "people development". In these companies, the culture is "people-focused, people-centred."

Thus, although a large percentage of Digital's workforce was educated to third level, those who joined from school were encouraged to better themselves, so many were sufficiently adaptable to go out to the marketplace with confidence and attractive CVs.

BY contrast, Seagate never perceived a dividend in good communications between senior management and the workforce. Sharp lines were drawn between the two. "There was no information about anything," said a staff member. As a result, the company was riven by rumour from day one. "A manager could deny a rumour to the staff that would later turn out to be true," said a middle manager, "but he wouldn't have known that at the time."

Management style was confrontational. Warnings and sackings were commonplace. Workers allege they had to sign a book before being allowed to the lavatory and that absences certified even by a doctor were frowned upon. As for union, the word could never pass their lips, they say.

"My supervisor was brilliant but I just felt like a number," said one worker.

In July last year the company suddenly shut down for the month; bad enough for those still due their two weeks' paid summer holidays but a bombshell for workers who had been forced to take their two weeks in May or June. Then recently workers were begged to haul in every sibling they had to help meet production targets.

This week hardship stories surfaced at every turn.

A case where a husband, wife and two daughters all worked for Seagate. Several cases of husbands and wives, both depending on Seagate. Cases where mortgages were taken out on the strength of a Seagate job supplementing the family income or of a car being bought to commute to the factory.

Families returned from abroad, delighted to get the work even while a net week's wage was just £130. They looked forward to working and progressing in a growing company.

"I've just moved into a new house. I'm the main breadwinner and I have a four-year-old child," said Ann-Louise Quigley. "I have no education, no qualifications beyond Leaving Cert. What can I do? I saw my future here in the next five to 10 years. But it was a social outlet, too.

"When I came back from England five years ago, all my friends were gone. Seagate is my life now. This is where I made my friends. It's going to leave a huge void in many people's lives."

Clonmel as a town, however, will not lie down and die.

The chairman of Clonmel 2001 Taskforce on Tourism, Tom Pollard, believes that this obstacle, like the others before it - Digital, Kentz, Bourkes - will be surmounted. Some 31,000 people live within 10 miles of the town, half of them under the age of 24.

It has a sound base of long-term blue-chip companies, Merck Sharp and Dohme, Showerings, Medite and Clonmel Healthcare among them.

Jimmy Ryan, a member of the Minister's task force, has been helping establish a third-level institute for Co Tipperary. Firmly focused on information and communications technology, the Tipperary Rural Business Development Institute (TRBDI) will be a model for communities believing that success is about sustainable rural industry and about educating people.

"We're really trying to position second-level students so that they will be able to pick subjects that will enable them to come back here. There is great resilience within this community. This has always been a good business town. We have to look to industries that have been successful here. We have the skills and the quality of life. The only pity is that the TRBDI wasn't up and running 18 months ago," said Jimmy Ryan.