UP to 3,000 jobs are at risk in the electronics industry, the chief executive of IDA Ireland said yesterday. However, he stressed the bulk of jobs in the sector were safe.
Mr Kieran McGowan said around 5 per cent of companies, representing 3,000 jobs, were currently in the "high risk category". A further 30 per cent of firms are at "medium risk".
The challenge for managers is to be successful at convincing their parent companies to add more responsibilities to make the Irish operation a more indispensable part of the entire corporation," he said.
"Unfortunately, effective management of existing production operations is no longer enough," he said.
Mr McGowan said the IDA's research found that companies least at risk tended to be those where the Irish plant had most responsibility for its own future, acting as a centre for excellence for particular products, processes or markets within the overall corporation. He added there was a need for more of the multi-national owners to commit to establishing centres of excellence in Ireland to contribute to the future success and development of their global businesses.
"Many of our client companies in electronics in Ireland are achieving this status and have established strong credibility within their parent organisations," he said.
Mr McGowan, who was addressing the Cork Electronics Association, said the electronics sector continued to bed itself deeper into the Irish economy, spending £2 billion a year on Irish goods and services. It also paid more than £40 million in corporation tax.
Mr McGowan said 56 per cent of the 135 companies in the sector would have very low risk status. "Our most recent review indicates that the sector is generally buoyant and stable with 90 per cent of all jobs in medium and low risk categories," he said.
He said companies were increasingly adding more responsibilities and greater value-added functions to their Irish manufacturing operations. Forty per cent of all electronic companies now have added functions such as software development, customer support marketing, distribution and product development.
He said the IDA's strategy for the electronics sector focused sharply on each company achieving the maximum embeddedness in the Irish economy.
He promised the development authority would use its resources to help managers make their Irish operations more indispensable. "It also requires IDA to achieve a wider spread of business functions within electronics plants from their very start-up," he added.
Emphasising the sector's importance, Mr McGowan said the sector exports nearly £20 million worth of goods every day, the equivalent of £6.7 billion a year.
Already this year, several companies in the electronics sector have experienced difficulties. In September, General Instrument in Macroom, Co Cork, said it had to lay off 100 of its 700 workers because of a worldwide downturn in demand for its products. The company had been aiming to employ 1,400 people by next year.
In March, Mitsumi announced it was reducing its 170-strong workforce by 80. It said increased competition from the Far East had forced rationalisation. Its main product line has been keyboards for the computer industry.
