IRELAND’S FLIRTATION with pharmaceuticals, including Pfizer, goes back a long way and has proved very beneficial. Coming in after food and electrical goods, it is the third largest provider of manufacturing jobs. Nine out of the top 10 global pharmaceutical companies have operations in Ireland where they produce seven out of the top 10 blockbuster drugs. Many of the jobs involved are highly-skilled and well paid; the so-called smart jobs which we are told are more durable than mere assembly jobs. The firms involved, mainly due to the lowest company tax rate in Europe, have generated huge profits from their Irish operations.
Nevertheless, Pfizer, the world’s largest pharmaceutical company, has decided to pull the plug on three of its Irish plants and consign 785 employees to the dole queues. The employees will be disappointed, devastated and even angry. They are entitled to be. Nobody has suggested that the plants scheduled for closure are not profitable or viable. Rather, the fact is that they are not profitable enough.
Last year Pfizer bought out rival drug company Wyeth for a total consideration of $68 billion. The purchase necessitated a huge increase in Pfizer debt which must be financed and eventually repaid. The company said at the time that it would expect the takeover to manifest savings amounting to $4 billion a year through a reduction of 15 per cent in the workforce. So, yesterday’s announcement will have come as no great surprise to employees. The company said that, following the Wyeth purchase, it now has “excess manufacturing capacity and the duplication of resources”. The markets were not unhappy. The company’s share price climbed 31 cents in New York following the announcement.
There is an element of climbing on the tiger’s back in attracting large foreign investment. The value of the resultant employment, wealth-creation and taxes cannot be overstated. But foreign-owned industries dance to their own agendas and, no matter how successful Irish subsidiaries become, decisions taken thousands of miles away can consign them to the graveyard. Ireland would seem to have suffered a disproportionate blow with three of the eight worldwide plants that “are being exited” located here, though these plants are small in global terms.
There is a possibility that Pfizer will find buyers for the plants who would maintain at least some of the jobs but in the current climate that desirable outcome would seem a long shot. The Government has trotted out the usual guff about retraining the employees affected, and no doubt a taskforce will be set up, but all of that is scant consolation to them and their families. The Government needs to get real about the unemployment crisis. Currently there are 430,000 persons (and rising) in the dole queues – 13.5 per cent of the workforce – and yet Government policies to tackle this, at best, are nothing more than old wine in new bottles. Would that the concentration of effort brought to bear on saving the banks be utilised on saving the unemployed.