Cynics may say the Government's taskforce-oriented reaction to layoffs is a PR exercise, but their role in past recoveries provides lessons for now

FOR THOSE who remember the taskforces of the 1970s and 1980s - set up after the closure of a number of large, high-profile companies - there's a sense of deja vu in the resurgence of the term.

It's as if there's well-thumbed manual in Government Buildings on how to handle major job losses. "Step one: Immediate statements of regret and sorrow at the impact on the families and local community. Step two: within hours, promise some action. Step three: set up a Taskforce."

Mental images are conjured up of leading industrialists parachuting into the area, Swat teams of business gurus shimmying down ropes into all-night meetings, white boards on every wall and a hitlist of new employers for the region prepared within hours. The message is simple: your local representatives are on the case. The best brains in the country are going to get you all back to work.

Cynics baulk at the very idea and write them off as a publicity exercise to buy the politicians and civil servants some breathing space until media attention drifts to the next big story. Then it's just a case of dealing with the local media and hoping a mixture of migration from the area and local enterprises can allay some of the damage.

However, Government-appointed committees have their defenders.

Kieran McGowan, former chief executive of the IDA, has experience of the work of a number of taskforces. He says they perform a useful role in co-ordinating local initiatives and putting pressure on agencies to deliver for a region. "It might be a question of improving infrastructure or getting a more attractive package for new potential investors in the region They can be very effective in helping to steer inward investment in a particular direction and making sure that a region gets its fair share of projects."

In the early stages of an economic crisis, taskforces will generally meet on a weekly basis. They are usually comprised of representatives from a number of development agencies, including the IDA, Fás, the local authorities, county enterprise board and, in some cases, local chambers of commerce. Their work typically focuses on overcoming obstacles to attracting new projects and on lobbying for site visits. It's not exactly rocket science, but it does work.

McGowan does not see a conflict between developing policy on a macroeconomic basis and being able to funnel projects into areas in need. Ultimately, he says, a multinational will make its own decision about where to locate but a heightened sense of urgency on the part of local business interests will not hinder their case.

Padraic White, another former IDA boss and veteran of taskforce veteran, says when Digital closed down its manufacturing facility in Galway in early 1993, meetings were held with the plant managers from five major multinational subsidiaries in the region, all of whom enthusiastically agreed to help out inpromotinge the region to potential new arrivals. "There was a great sense of solidarity and trying to do something positive for the city," he recalls, singling out local regional manager Tom Hyland for praise in helping to co-ordinate a positive response to what seemed a bleak outlook for the city.

Within four years the jobs had been replaced and a number of leading technology companies,including Brian Long's Parthus, can trace their origins directly to the Digital pull-out. "One of the features of our success in attracting multinational companies has been the development of managerial and entrepreneurial talent in these subsidiaries," says Prof Patrick Gibbons of the Michael Smurfit Graduate School of Business, who adds that within one year of the closure of Motorola in Cork, 10 start-up companies had been formed.
Arguably the most successful taskforce response to the announcement of a closure occurred with Travenol, later called Baxter Healthcare, in Castlebar. Here, the response was such that the company reversed its decision to shut the plant based on a concerted and successful effort to improve productivity at the facility, which had been beset with a range of problems.
White, who was involved in the efforts to save the Castlebar facility, said an earlier attempt to save the Ford plant in Cork was unsuccessful. They had tried to convince Ford HQ of the potential to transform the car facility into a new modern business. "We had a good plan but when we went out to the US to present it, it became obvious that the mood towards the plant was very negative and there was no way they were going to change their mind." White and McGowan agree one of the key
lessons from past experiences is to always remain positive towards the organisation that is shedding jobs, despite the natural inclination of local people who have been hard hit personally to feel a sense of betrayal. While one part of the facility may have gone, in many cases, including the recent Dell announcement, significant parts of the operation remain in place – sometimes the more
enduring or value-added parts of the business. There is also the possibility that if a critical mass remains in place, the location may also benefit from new inward investment from the multinational over time.
In general, Ireland has a history of recovering well from mass layoffs and plant closures. There are also lessons learned from previous shutdowns – and they would indicate that while there is initial pain for all involved, the aftermath is far more complex, and generally has had upsides for Ireland Inc. If one goes and examines the fallout after some previous high-profile pullouts, notes Dr
James Cunningham, director of the Centre of Innovation and Structural Change (CISC) at
NUI Galway and co-author of a new book, Irish Management 2.0, previous job losses in multinational
technology companies based in Ireland have not been triggers for larger scale collapse.
Paradoxically, such situations have often proven to be innovation drivers that have strengthened the economy in the longer run. The most obvious example, he says, was the pullout of Digital (now HP) from Galway in 1993, at a time when the Irish economy was very fragile, unemployment high, and prospects for the workers seemed dim.
Over 800 jobs went from this employer of 1,300, and another 1,500 or so regional jobs
were seen as dependent on Digital's operations. "It was a huge blow at the time for the Galway
region," he says. "But look at the Digital story – as a result of the closure, Digital spun out lots of entrepreneurs and the region ultimately developed an IT (information technology)
cluster."
He says this didn't happen entirely by chance. Though a major driver was the Irish talent within Digital at that time, the Government and agencies also quickly set to work to focus on developing the region to have "competitive value", he says. Dr Rory O'Shea, a lecturer at the UCD
Smurfit School of Business, agrees. "Although these situations bring about anxiety, they also bring about opportunity," he says. After the The high-level management experience gained by Irish employees of multinationals creates a training ground for future entrepreneurs loss of the Digital jobs, Ireland "witnessed many new ventures that were created – based upon devising new technologies, discovering new products, or developing new markets, and drawing much of their prior experience working at these multinational companies."
He points to entrepreneur Brian Long as arguably "the most prominent example in this respect." Long went on to found chip technology company Parthus, one of the more high-profile indigenous IT companies to emerge from Ireland in the past two decades. Other mass closures, such as the complete shutdown of Gateway's manufacturing plant in Dublin, also provoked dire predictions of
major pullouts, notes O'Shea. But again, this didn't happen. Those in Gateway's Irish management
have gone on to very senior-level positions within multinationals such as Microsoft, and Gateway's Irish managing director, Mike Maloney, has gone on to become a prominent entrepreneur and venture capitalist. Both O'Shea and Cunningham strongly emphasise that the high-level management experience gained by Irish employees of multinationals creates both a training ground for future entrepreneurs and gives Irish managers the prominence in such companies to be deeply
influential both at home and abroad when their companies look to place higher value
operations abroad or to hire.
"For the size of our population, people of Irish birth and Irish descent hold a lot of key
positions in multinationals," says Cunningham. "This is one of the advantages of having
mass investments – we are building up the management capability that the whole country
eventually benefits from. And Irish employees and managers have delivered consistently for
multinationals."
However, one important difference this time around when we come out of the recession is there is little prospect of replacement assembly-line manufacturing jobs coming to Ireland.
One of the key functions of any taskforce is to create realistic expectations in terms of replacement industries. In the case of Dell, the reasons for the specific layoffs need to be seen in a broader context – replacing one uncompetitive assembly function with another is not an option for the workforce or the region. The issue, experts agree, is as much about compensating the region as the workforce, as not everyone will have the skills or opportunities to benefit directly from any new forms of investment that come as a result of the efforts of the taskforce.
Gibbons says that while taskforces are vital in ensuring a co-ordinated response to an economic shock in a region, ultimately their success is a function of how competitive an
economy Ireland is.
"A taskforce cannot act like King Canute and attempt to roll back the tide of eroding
competitiveness and productivity. There remain significant impediments to our competitiveness
– broadband availability, educational attainment, labour flexibility and high costs of services are all inimical to the creation of good jobs."
For Gibbons, the issue also goes beyond the eastward migration of manufacturing jobs in
Europe and the assumption that Ireland will automatically move up the so-called value chain. "While we speak about focusing on the knowledge economy, the location of R&D activity is also shifting to China, India and Singapore, among other locations. So in addition to competitiveness, we need to identify how we can attract talented scientists, technologists and other professionals to Ireland. If the future is to built around a knowledge economy, then we need to ensure that Ireland is an attractive place to live for talented people."
Cunningham supports this proposition, pointing out that low-level manufacturing will always be at risk of moving to cheaper locations and that every closure of such facilities here has more or less been expected.
Yet what tends not to be noticed is how many companies that have moved manufacturing have actually kept the higher value, "knowledge economy" jobs in Ireland, says O'Shea.
Apple has transitioned its Cork manufacturing facility over to higher-level service jobs in recent years, and in the wake of Dell's announced job losses, few have focused on the fact that about 2,000 jobs remain, most of them in higher-level service and sales jobs in Limerick and Dublin, says O'Shea.
Among the jobs lost from Dell, O'Shea expects many workers will go on to help build new industries. "I think you might see a lot of operational management jobs, especially supply management, become useful to the growing biotech industry," he notes. O'Shea and Cunningham emphasise that Ireland's response to the current environment and job losses in the tech sector must again be one where State and agencies help to reposition the country in emerging high-level technology areas.
Cunningham points towards the pivotal role Ireland could play in managing and developing tech-sector intellectual property, as well as  fresh markets such as "converging tech – ICT and biotech".
O'Shea thinks the whole area of clean-tech and green-tech are very promising for Ireland, and adds that the IDA and Enterprise Ireland should have dedicated units in these niche areas.
Coming in late to already developing industrial sectors won't do much for a small country, he says, but Ireland can lead in new sectors where it has the ability to pioneer.
"We need to move into sectors where the industry is embryonic in nature," he argues. "And we need to move much quicker into these new areas, before other countries get there first."