Losses In Times Of Plenty

The announcement that 1,400 jobs are to be lost at the Seagate Technology plant in Clonmel, Co Tipperary - just a fortnight before…

The announcement that 1,400 jobs are to be lost at the Seagate Technology plant in Clonmel, Co Tipperary - just a fortnight before Christmas - will come as an immense shock to the workers concerned and their families and will have a serious impact on the regional economy. There was a time, not so long ago, when the announcement of job losses was almost routine in this State. The Seagate redundancies are a reminder of those dark days, but it seems somehow incongruous and out of tune with a time of unprecedented economic growth. Perhaps we should not be so surprised. Indeed, the news should serve as a salutary reminder that nothing can be taken for granted - especially in the volatile hi-technology sector. Seagate itself was the replacement industry provided for Clonmel when another US computer giant, Digital, closed its plant in 1992.

Seagate, which opened its first Irish plant in Derry in 1994, quickly built up a workforce of over 1,400 in Clonmel but for the past year it has been affected by the worldwide weakness in the market for hard-disk drives. At present, there is substantial over-capacity in the memory sector of the computer industry.

The first ripples of concern were felt in October when the company announced that its plan for a 1,000-job investment, costing £150 million, at Ringaskiddy in Cork was to be deferred for six months. Shortly after this, some 160 temporary jobs at the Clonmel plant were lost.

The company, however, is vulnerable to the charge that it was disingenuous in its dealings with both the Government - especially the Tanaiste, Ms Harney - and the workers. Seagate executives have made reassuring statements about developments in relation to the Derry plant and the proposed investment in Cork; but the extent of the difficulties at the Clonmel plant were clearly glossed over.

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The abrupt announcement of the redundancies makes the company liable to the charge - made against many US multinationals in the past - that it established here on a footloose basis, without any real commitment to the economy.

Business closures are an inevitable part of economic life, but it is outrageous that senior company executives from Seagate can arrive in Ireland and peremptorily announce the closure of such a major industry. It raises serious questions about the way the company conducts its business. Inward investment, particularly in the electronics sector, has provided thousands of new jobs to the economy in recent years. But Seagate's abrupt departure from Clonmel again highlights the case for a discerning approach towards inward investment, with an emphasis on longer-term strategies. It may be that Seagate is a special case. It may be that the redundancies in Clonmel have no wider implications for the burgeoning computer sector in this economy. It may be that the job losses will be no more than a blip during a period of sustained economic growth; but if nothing else, the episode should serve as a cautionary tale for those among us who are tempted to believe that the surge in economic growth will continue without reverses.