A proposed Seagate computer plant in Cork, which was to provide 1000 jobs, is unlikely to go ahead next year. Government sources confirmed yesterday that the future of the factory, planned for Ringaskiddy, which was expected to open in the coming months, had been thrown into doubt.
The company is "unlikely to proceed within the next year" with the Cork plant, the sources said.
Furious at the company's handling of the sudden closure in Clonmel, Co Tipperary, with the loss of 1,400 jobs, the Tanaiste, Ms Harney, yesterday said that, "quite honestly, I laughed" when Seagate executives assured her the plans to develop the Cork plant were going ahead.
"I replied, `if you think I can approach the Government and recommend you receive grant-aid for a new facility in Cork following on this disaster, I want you to know that I would find that very difficult' ", she told the Dail. However, the Tanaiste added that it would be "irresponsible" to close the door completely on the project.
Defending her decision not to inform the workers in Clonmel last October that Seagate was considering two options, including cutting jobs to 750, Ms Harney said the company was in difficulties at the time and she did not want to make its problems worse by making an announcement to the employees.
She also said Seagate would repay in full £11.3 million of IDA grants. The company is to provide about £4 million in a severance package for the 1,100 full-time workers.
In Clonmel yesterday, it was learned that the 300 temporary workers at the plant are to be laid off in a week with no severance pay. During Ms Harney's early morning visit to the plant to address workers yesterday, the company management confirmed that its intention is to cease production in mid-February. Civic officials yesterday urged the Seagate workforce to participate in an orderly wind-down of the company. Fears have been expressed locally that worker demoralisation may lead to widespread absenteeism after Christmas and could prompt management to make an even earlier closure.
Mr Kieran McGowan, chief executive of the IDA, said that the authority had offered to support the company if it undertook investment to upgrade the facility and make it more viable in the future. They had believed that option was under serious consideration right up to and during the crucial board meeting at Seagate headquarters in California a week ago.
In Derry, where Seagate employs 1000 people but has postponed further investment plans, the SDLP leader, Mr John Hume, sought to reassure the factory workers. "My clear understanding is that their positions are quite safe and, as I know from my own experience, the quality of the work of the workforce has built up an enormous confidence at the highest levels of Seagate. . . " The downturn in the computer disk-drive market, blamed for the closure of Seagate, will put pressure on its closest rival, Quantum, which employs 400 people in Dundalk.
Quantum, the world's second-biggest disk-drive manufacturer, yesterday issued its own distress signal to investors, warning that the glut in the market would sharply reduce its profits. But Irish managing director Mr Aidan Donnelly quickly moved to reassure Quantum's workforce, stressing that there was no threat to their jobs.
"It is business as usual. We have been recruiting staff over the last few months and will continue to do so in the new year" Mr Donnelly said.