Tipperary Plant Closure - Debate 25th May 1999

Mr. Ferris: It gives me no pleasure to raise the matter of a further factory closure in Tipperary town. Last Friday morning, Namco Ireland Limited announced the closure of its manufacturing plant with the loss of 42 jobs. Perhaps the loss of 42 jobs is not very important to the Government, taking into account some of the job announcements recently made by the Tánaiste. However, in comparative terms, the loss of 42 jobs in Tipperary town is the final nail in the coffin of a town which has staggered from one closure to another.

As the company has stated, its share of the traditional games market has declined in the past few years as the technology gap between commercial and consumer games closed dramatically. This has arisen from the huge penetration of personal computers and highly sophisticated games software. Apart from job losses in other parts of the county, the litany of losses sustained in Tipperary town include the 7-Up soft drinks company, O'Doherty and O'Dwyer, Irish Pride bakery, Mass Mutual and Tambrands Ireland Limited. Mass Mutual has been replaced by Continental Promotions and Tambrands by Pall Corporation. However, these replacement companies, welcome as they are, are still in the process of getting into full employment mode, leaving a large number of unemployed people in Tipperary town. It is a shame that during this economic boom and the Celtic tiger, good workers who have excellent relations with their employers are forced to travel to Clonmel or Limerick which necessitates a 50 mile round trip.

Last Friday morning I met with the directors of Namco, including Michael Nevin and John McKenzie, the managing director and financial controller of Namco Europe respectively, and Patrick Pickham, the general manager of the Tipperary plant. I am pleased they have agreed to allow their facility to be marketed by the IDA. I do not have to tell the Minister, as the Tánaiste has already issued a statement, that this is one of the most excellent facilities available to the IDA and the Government. It is a magnificent facility and I thank the outgoing company for maintaining it. It has installed a security system to ensure the factory is not vandalised. It has ensured the continuation of heating, lighting and cleaning so that when the Minister, through the IDA, brings in a prospective customer they will see an excellent facility. Any prospective company can start up there immediately.

I ask the Government to give a commitment that Tipperary town will be given the priority it deserves from IDA promotions in Europe and North America. Nothing less will satisfy the people of Tipperary town and those of us who represent them. The company agreed, in consultation with me, to enter into meaningful and, hopefully, satisfactory negotiations with union representatives. I hope they will agree to a fair redundancy package to compensate for the loss of jobs. Many employees have worked for this company for more than 20 years. The closure has created and will create problems for Tipperary town. Every stop needs to be pulled out so Tipperary town will not be neglected and left on the industrial heap by the Government or the IDA. This closure is not the fault of workers or the company.

Mrs. T. Ahearn: The Minister said he will allow me a little time to endorse what Deputy Ferris said.

Leader of the House: My predecessor in the Chair ruled it was not appropriate for a Minister to concede time to a Member of the House. However, if the House is agreeable, Deputy Ahearn may make a contribution. Is that agreed? Agreed.

Mrs. T. Ahearn: I thank the Minister for giving me this opportunity to concur  with Deputy Ferris. We are all devastated and shocked by the closure of this factory in Tipperary town. Deputy Ferris did not exaggerate the tragic consequences of the loss of 42 jobs to the economy of the town. Tipperary has suffered more than its share of job losses. This must be the priority of the IDA. I trust that the plea made by Deputy Ferris and myself will enable the Minister for Enterprise and Employment to put Tipperary on the top of the agenda. We hope we will be able to report to the devastated workers that the Government will make every effort to get a replacement industry.

Minister of State at the Department of Education and Science (Mr. Fahey): I acknowledge the constructive contributions of both Deputies. I apologise for the absence of the Tánaiste. We were all greatly disappointed at the recent announcement by Namco Ireland that it will close its Tipperary plant which is engaged in the manufacture of amusement centre video games, with the loss of 50 jobs. This decision has resulted from the loss of its contract to supply its main customer, WMS, with Atari product. This product represented 60 per cent of turnover in the Tipperary plant.

The Atari corporation established an operation in Tipperary in 1978 and one in Limerick in 1982. At that time they were world leaders in video games and home computers. Over the years, the company lost market share to the more sophisticated Sony and Sega products. This resulted in the downsizing of the Tipperary plant and the closure of the Limerick plant.

Atari was bought by two successive owners and finally by WMS in Chicago, which is in the same business. Namco corporation, a $500 million dollar business with global leisure interests, purchased the manufacturing facility in Tipperary from WMS and a contract was agreed to continue to supply the Atari product to Europe on its behalf. In addition, Namco manufactured some of its own product for Europe in the Tipperary facility.

Following the loss of the WMS contract, the only remaining production in the County Tipperary facility was Namco's own product, the volume of which would not be sufficient to maintain the operation. IDA Ireland requested that Namco consider the option of making Ireland its principal European manufacturing base. However, despite IDA Ireland's best efforts, in discussion with the company and at meetings with the Japanese owners regarding the various options, Namco has decided that the only option is to close the facility. Namco previously closed its UK manufacturing facility with a loss of 40 jobs.

In response to the announcement, IDA Ireland has persuaded the company to co-operate in promoting the property for an alternative manufacturing activity. A specific marketing initiative to highlight the availability of a modern facility and skilled workforce is currently being put into action through the IDA's overseas offices. In particular, IDA Ireland is targeting the opportunities for sub-supply companies to locate in County Tipperary to service the growing number of large scale IT manufacturing operations in Ireland. I understand that IDA regional management will be meeting tomorrow with the county manager, the chairman of the county council and the chairman of the urban district council to discuss a full range of further initiatives.

This and previous Governments have had significant success in the last few years in attracting new jobs to County Tipperary. In 1997 and 1998 a total of 697 and 726 jobs, respectively, were created in County Tipperary in client companies of the industrial development agencies, namely, IDA Ireland, Enterprise Ireland, Shannon Development and the Tipperary county enterprise boards.

In April 1998 an expansion of 200 jobs for Clonmel Healthcare was announced. In July 1998 Guidant Corporation, a global leader in the medical devices sector, decided to establish a 518 person project over a five year period in the former Seagate facility. Guidant Corporation is progressing well, and in March 1999 the Taoiseach announced a 700

person expansion project for the company. Also, in 1998 60 new jobs were announced for Tipperary town, with an expansion of Continental Promotions. In addition, employment in Pall Corporation, also in Tipperary town, increased to 99 in 1998.

I assure Members every effort will be made by the industrial development agencies to ensure a replacement industry for Namco is secured at the earliest opportunity.

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