Job losses - Firms’ ability to compete hit by taxes

COMING in the wake of a deeply depressing week of more than 1,000 job losses, today’s news that the Government is expected to announce the creation of 1,000 jobs this week is heartening.

This marks a welcome reversal of a trend where pressure is mounting on hi-technology companies to pack up and move to cheaper locations in Eastern Europe or the sweat-shop economies of the Far East.

By any yardstick, the past week has been the worst for job losses in a long time.

The pain and suffering of those joining the dole queue was etched on the faces of workers leaving the 3Com plant in Dublin’s Blanchardstown, where 640 jobs went at the stroke of a pen in a US boardroom.

Regrettably, other workers across the country are now bracing themselves for more of the same as the global economy continues to struggle.

According to IDA Ireland, up to 15,000 jobs are under threat. Overall, the activities of 30 companies in the hi-tech sector are being monitored with growing anxiety.

The grim reality is that the rate of job losses in the economy is rapidly accelerating as the pace of the IDA’s inward job creation drive steadily declines.

Thus, even if the agency succeeds in attracting 12,000 replacement jobs already in place or coming down the tracks, there will still be a shortfall of 3,000 or more by the end of the year.

That said, the welcome news that internet auction group eBay is expected to create 1,000 jobs on the east coast brings a glimmer of light to an otherwise dark landscape.

It is worrying, however, to learn that the internet company and the IDA have reportedly fallen out over the group’s refusal to locate in a less-developed region. Apparently, this led eBay to walk away from talks with the IDA.

In better times, it would indeed be refreshing to see those jobs starting up on the west coast, where communities are crying out for employment. But it would be short-sighted of the IDA to withdraw grant aid from a company merely because it refuses to locate where it is told to go. In these straitened times, beggars can’t be choosers.

Until we hear its side of the story, criticism of the IDA’s overly-rigid approach to this question appears justified.

In the cut-throat business of job creation, no country can afford to withdraw its support network from a prospective industry without very good reason. A squabble over location hardly merits pulling the plug.

A more positive aspect of the IDA was illustrated last week when it announced 160 new jobs for the north east involving two separate projects in Dundalk.

And on an equally bright note, Tánaiste Mary Harney will today announce completion of a project that will ultimately see €250m invested in hi-tech equipment at the Pepsi-Cola plant in Cork.

Generally speaking, however, there is growing disquiet over the current rate of job losses.

The state of the economy is undoubtedly contributing to the Government’s and the Taoiseach’s growing unpopularity in addition to broken promises and the inept handling of the Laffoy Commission debacle.

While it may be beyond the Government’s power to staunch the jobs haemorrhage, it is to blame for eroding competitiveness through stealth taxes and also for slowing down vital investment in infrastructure urgently needed to make Ireland a more attractive base for new industry.