Plants are closing all over Europe as recession deepens on the continent and particular industries make the painful adjustments to their own private new world orders, but the announcement that Digital Equipment Corp was to close its venerable 22-year-old manufacturing plant in Galway has drawn international attention that far exceeds anything generated by threatened closures […]
Plants are closing all over Europe as recession deepens on the continent and particular industries make the painful adjustments to their own private new world orders, but the announcement that Digital Equipment Corp was to close its venerable 22-year-old manufacturing plant in Galway has drawn international attention that far exceeds anything generated by threatened closures such as the even more venerable truck plant that is almost the only employer in the Lancashire town of Leyland, and involved a threat to many more jobs. That played big in the UK press but caused scarcely a ripple beyond the shores of Britain. Galway’s worst economic nightmare came true when US computer group Digital decided to close its manufacturing plant in this thriving city on Ireland’s Atlantic coast, wrote Reuters reporter Paul Majendie. For the 780 workers to be thrown out of their jobs by a global business giant grappling with international recession, it was the death of a dream. ‘This is undoubtedly Galway’s darkest hour,’ said Mayor Padraig McCormack as the city looked like being transformed into an economic blackspot. Almost a quarter of Galway’s manufacturing workforce are being put out of a job and local business leaders say that up to 2,000 more could be made redundant by the ripple effect hitting Digital’s contractors and suppliers.
Economists estimate that Galway’s unemployment rate will soar above its present level of 34% – already twice the national average. Exactly the same could be said of Leyland – and indeed it was, in the British press. But this one played internationally: why? One of the reasons is clearly the cloying sentimentality with which all things Irish are viewed by so many Americans: DEC after all is a Boston company, and Boston has a large population that traces its roots back to Ireland. How could the company treat its own in such a shabby fashion? The outrage was piqued further by the fact that the final play-off was between Ireland and Britain, and sentimentality about a mythical Ireland – a sentiment that does no service to the modern industrial state that Ireland is striving to become goes hand in hand with staunch anti-British feelings. The subtlety that when Irish people express their antipathy to the British, the real target of their hatred is the English, and that Ayr, the rival plant, is actually in Scotland, where a substantial proportion of the population feels just as strongly about the English as do surrogate Irish nationalists, was quite lost on the protesters across the water. From a wider perspective, the restless tides that govern world trade and industry make plant closures as well as new plant openings inevitable and healthy, and only the neanderthals that believe that it is management’s function to provide jobs for life, and the workers’ function to make management’s life as hard as possible would argue otherwise. None of which is to say that Galway’s anguish is not fully justified. Galway has been devastated. People are in shock. Digital was the backbone of Galway. You were set up for life with them, Olive Fitzgerald of the Samaritans, bracing for a flood of calls over the next few months on their telephone helpline, told Reuters’ man. But the real reaction won’t set in until the money becomes scarce. Where is the work? There just isn’t any, she said.
Yet there have been any surprise at the decision, dismissed brusquely by DEC chief executive Robert Palmer with a curt Nothing personal. It is simply a matter of business. A glance at the map of Ireland immediately raises the question Why was the plant there in the first place? It’s near the international airport at Shannon is the first thought that spings to mind but Galway isn’t close to Shannon. Most of the high-tech inward investment in Ireland is concentrated around Dublin and in Cork, and it seems to have been remiss on the part of the Industrial 7Development Agency that having enticed DEC to Galway, it was not able to turn the town into a centre of high-tech inward investment so that if DEC – or others –
pulled out, there was every chance of attracting new ones. After all, Wang Laboratories Inc and Prime Computer Inc are just two of a string of companies that have opened and later closed in the south of Ireland, but Amdahl Corp is still there, Intel Corp is investing heavily and expanding, 3Com Corp and Cabletron Systems Inc are among the new arrivals, and several other chipmakers are still doing assembly and Sun Microsystems Inc has just followed ICL Plc and Sema Group Plc in establishing software development operations in the Dublin area. And a handful of critics is beginning to wonder whether Ireland has not concentrated a little too hard on attracting inward investors at the expense of building a strong home-grown computer and electronics industry: after all, the policy of rallying all centres of higher education to turn out highly-skilled hardware and software engineers has been a great success, but shouldn’t more of those people be working for Irish companies? After all, at the most basic level, Ireland should be a superb base for establishing a rock-bottom high volume personal computer manufacturing business that could knock spots off Tulip Computers NV with its lower costs and be challenging Elonex Plc and the tartan Americans led by Compaq Computer Corp and IBM Corp, not to mention Ireland’s own foster-sons Dell Computer Corp in Limerick, and Apple Computer Inc in Cork. Nor are the prospects, even for Galway, as bad as they appear at the moment: workers reportedly wept openly in the Digital canteen when told their jobs were being phased out over the next 12 months, but the fear that most of the subcontractors that served DEC will have to close as well is not likely to be realised: where a company has a good relationship with a subcontractor, there are good reasons for maintaining that relationship even after a plant closes, and work should start flowing across the Irish Sea all the way to Galway from Scotland. Business leaders have moved into Galway to repair the damage with task forces to help create replacement jobs. The Bank of Ireland group has set up a special support unit to assist DEC employees eager to start their own businesses with their redundancy money.
And a much more substantial prospect is to be found in continental Europe, where the German worker is assiduously pricing himself out of the market – and far from the Ossies pricing themselves into jobs lost by the Wessies, the former East Germans are insisting on even more uneconomic wages in relation to their skills and capabilities. The deepening recession in Germany makes it more and more certain that German companies will have to transfer manufacturing overseas, and so long as the former Comecon countries remain outside the European Community, Ireland will be one of the most cost-effective places to site new plants. Things look very black for Galway today, but there is every reason to believe that even before DEC finally shutters its factory in about a year from now, a new tenant will be poised to move in and occupy it.