January 2007 was a worrying month for the Irish economy. Across the country 2,807 people lost their jobs – a 21 per cent increase on the same month last year.The two sectors to suffer most have been the services sector, which had 1,000 layoffs, and manufacturing, which suffered 860 job losses.
In Cork, the news of Motorola beginning a consultation process with 350 staff, on so-called restructuring measures, has come as a real blow.
Rumours of jobs under threat at Pfizer’s plants in the Cork harbour area are also causing serious concern. These are high value jobs that we simply can’t afford to lose.
The harsh reality is that both Motorola and Pfizer have announced that they intend to cut large numbers of jobs globally, in a cost-cutting exercise. The question is, how will operations in Ireland be affected? Pfizer, for instance, employs more than 2,000 people in Ireland.
It is difficult to assess if this year’s job losses are the result of a series of unfortunate circumstances, specific to the individual companies concerned, or whether they are a symptom of something broader and far more serious to the wider economy.
Is it the case that Ireland is now being seen as a less attractive place to do business for large multinationals in the manufacturing, engineering and service sectors? Has the huge construction boom of recent years, and the employment and wealth created by it, disguised a changing market place for other sectors? Has the Government taken its eye off the ball in relation to keeping Ireland competitive for foreign direct investment? These are serious questions that need answers in order to ensure that the Irish economy remains buoyant and growing.
Last year, according to the Department of Enterprise, Trade and Employment, a total of 23,684 people lost their jobs. Worryingly, if the January trend were to continue for the rest of this year, that figure would be more than 28,600 for 2007.
It is true that the Irish economy is creating considerable numbers of jobs at the same time as being hit by layoffs. However, if the rate of increase continues in terms of job losses, it may become impossible to keep pace in terms of job creation.
This will certainly be the case if the reason for such losses in the first place is a lack of competitiveness.
It should not be forgotten that back in the year 2000 the figure for job losses was under 11,000, less than half the figure for last year. The Government needs to take heed of the clear signals that indicate Ireland is no longer viewed as a low-cost, competitive place to set up or expand a business.
Other countries have learned from our success and are able to undercut the cost base here, with lower taxation and lower wage and operating costs.
However, we do still have a number of strengths, primarily a very well educated and adaptable workforce.
The challenge for us is to target new investment from companies with a high skills requirement and ensure that we are training, and where necessary retraining, a workforce to meet that demand.
At the same time we need to support indigenous industry and business growth by encouraging entrepreneurship and keeping the costs of running a business to a minimum.
Ireland must avoid allowing itself become even more reliant on the construction industry into the future for economic growth. It is certain that this industry will not continue the level of growth that has been achieved in the last decade.
That is why the threat of job losses at companies like Motorola and Pfizer is so worrying, because these are the kind of jobs that we must be attracting, not losing.
Simon Coveney is a Fine Gael TD and MEP. He is writing a weekly column for Metro Eireann
