Job losses in Shannon and Cork
Deputy Howlin raised the shock loss of 820 jobs at Molex and Novartis and asked about a task force, the EGF, and advance warning. The Taoiseach expressed regret, said regional enterprise steering committees already exist as a standing task-force-type mechanism, and noted companies do not always give notice.
I was also truly shocked and saddened at the emerging news of 39 deaths in a container that may have passed through this country and that is certainly an issue to which we must revert as soon as we have more information.
In less than 48 hours, 820 good jobs have been lost in the south west between the 320 jobs at Novartis pharmaceutical company and 500 jobs at Molex electronic components company. This will leave workers and their families in a terrible situation coming up to Christmas. It will also have a significant knock-on effect on the local economies.
International trade is currently in a downturn due to increased protectionism and a move away from free trade. Locals have rightly asked the Government what it will do to support the workers now being unemployed. It will be a real test of the ability of the State and its agencies to react to major job losses. Unfortunately, there is still a risk of major job losses with an adverse Brexit. We will be looking closely at how the Government and its agencies cope with Novartis and Molex workers to see how successfully they will be assisted back to work and how problems in those regions can be addressed.
I want to ask the Taoiseach about the Government's analysis of the economy. The trade war between the United States and China is named as one of the factors that affected Molex, which has laid off workers around the world due to additional tariffs being imposed. It is extremely worrying that 820 job losses could come out of the blue, unknown to the IDA or the Department of Business, Enterprise and Innovation. Is this just unfortunate timing or are other jobs at risk right now? What research has been done by the Government to understand the effects of changes to international trade on jobs in Ireland? Can the Taoiseach assure other workers in similar jobs that their positions are stable?
There have been some estimates of job losses following a no-deal Brexit but does the Government have any estimate of job losses due to protectionism, the ongoing trade war and the higher tariffs being imposed on products made in this country? The World Trade Organization, WTO, permitted the US to impose €6.8 billion of tariffs on European goods at the beginning of this month. Food and drink products, including household names like Kerrygold and Baileys, now face a 25% tariff in the US. What analysis has the Government done about how this hostile trading environment will translate into potential job losses in this State and what is the Taoiseach going to do about it?
Comment on this
I thank the Deputy and join with him in expressing my regret at the news that jobs are to be lost at Molex in Shannon and Novartis in Cork. These are not connected. One is a pharmaceutical company and the other is in manufacturing and while the IDA had some advance notice that there may be issues with Novartis, there was no prior awareness of job losses at Molex. This will be a big blow to both regions, Cork and the mid-west, and our thoughts are very much with the staff today, particularly as we begin the run-in to Christmas.
We have become so used to big job announcements that it is sometimes easy to forget that jobs can also be lost but that can happen, and that has happened in these cases. On a somewhat reassuring note, the jobs are not to be lost immediately and will be phased over a two-year period, through 2020 and 2021. That will give people who do not take up early retirement the opportunity to find alternative employment, of which there is much in those regions.
It will also give us and the IDA an opportunity, perhaps, to get a new investor or owner to come into Molex, in particular, and replace the jobs.
The Minister for Business, Enterprise and Innovation, Deputy Humphreys, has cancelled events so as to travel to Shannon this morning, where she is convening a meeting of the enterprise agencies, the Department of Employment Affairs and Social Protection, members of the regional enterprise plan committee, the Shannon Chamber of Commerce, the local authority and other local stakeholders. The purpose of the meeting is to discuss how we can all work together, collectively across Government, State agencies and the private sector, to transition workers to new positions between now and the end of 2020, and what steps we can take to find a new investor for the Molex site. I want to assure the House that the Government will make every assistance available to the impacted employees in both companies. That includes benefits such as jobseeker's benefit, the back-to-education allowance for those who may go back to education, the back-to-enterprise allowance for those who may wish to set up their own business, as well as training opportunities and advice on redundancy entitlements and so on. All of that will be done.
I appreciate there have been calls for a task force. However, we already have a regional enterprise plan steering committee, which will be able to take on the role that a task force would have taken on in the past. We have done specific research on the impact of the recent US tariffs on EU trade and Ireland. I read it only a few days ago and I am not sure whether I am in a position to share it but if we are, we certainly will. When it comes to the US trade war, that is much harder to predict because we do not know yet the extent of it, what any tariffs will be or when or how it will end. It is a statement of the obvious, to which almost everyone in the House will agree, that free trade makes everyone better off in the round. It creates jobs and wealth and when there are restrictions on free trade through protectionism, it is not good for jobs or wealth. That is why it has always been the Government's position to be supportive of free trade, which we do, particularly, through our membership of the European Union and the trade deals the European Union makes.
Comment on this
I am sure the Taoiseach will acknowledge that many people were surprised by the lack of awareness, of both the Department and the IDA in respect of the announcement of the job losses. In Novartis's case, we understand it has been an ongoing consideration for a year. Has the Taoiseach ruled out the notion of a task force or will he reclassify an existing body as a task force to deal with this, as has been done in the past? Will he confirm that the workers will have access to the European Globalisation Adjustment Fund, EGF, as happened in previous cases of significant job losses?
On the lack of awareness, the Taoiseach might recall I raised several times the need to have direct dialogue on an enterprise-by-enterprise basis on the impact of Brexit. I have had discussions with a number of enterprises that have started short-term working or reduced overtime because of Brexit. I refer not only to enterprises in the agrifood and tourism areas but also those in manufacturing. We need to have enterprise-by-enterprise analysis in order that we will not be taken by surprise at shocks such as the announcement yesterday. Will that be done?
Comment on this
We have standing regional enterprise plan steering committees, which are made up of Enterprise Ireland, the IDA, the Department of Employment Affairs and Social Protection, the local authority, the universities and the local enterprise offices, as well as local stakeholders. They are exactly the same people one would call together to be on a task force and it is now a standing arrangement. I am not ruling out creating a task force but I would argue we have one already, and the regional enterprise plan steering committee can take on the role.
I do not know if Molex meets the criteria for the globalisation fund and we will have to check that out. If it does, we can certainly make an application, while if it does not, we cannot, but that can be checked out without any undue delay. Enterprise Ireland and the IDA already have direct contact with their various client companies and engage with them regularly on what the impacts of Brexit or trade movements would be.
Comment on this
Companies do not always give advance notice. They have their own commercial reasons for not doing so.
Comment on this
Where is the early warning system?