Business Technology

Tuesday 25 July 2017

HP's pullback isn't the start of an exodus

Another angle

HP Inket printer
HP Inket printer
Adrian Weckler

Adrian Weckler

Does HP's shuttering of its Leixlip factory represent the start of some pullback by US tech companies from Ireland?

It seems unlikely. Booming digital firms such as Google and Facebook are still expanding their Irish operations like there's no tomorrow. There's a queue of similar digital tech firms waiting to open up offices here, too.

'Legacy' multinationals - such as Microsoft, Dell and IBM - appear to have transitioned to services that help their companies to compete globally.

Another theory, that HP's retrenchment shows there is no place for manufacturing in Ireland's new industrial landscape, is also a little watery.

Apple still makes PCs at its facility in Cork, a fact frequently overlooked when talking about its financial arrangements here. Similarly, Intel makes chips at its Leixlip plant, a short hop from HP's facility.

Modern manufacturing in any western country is light years beyond the Dickensian stereotypes of low-skilled assembly lines. Any manufacturing jobs still here are unlikely to be shifted to China or Eastern Europe. (If anything, the threat to manufacturing jobs no longer comes from any foreign territory but from robots in our own countries.)

What about Donald Trump? Is his 'America First' policy tipping the balance when US companies review their offshore facilities? If they are, the timing of the HP announcement doesn't particularly rhyme. The company's core decision to cut jobs was made in October, when Trump's election still looked like a far-fetched thing.

In the end, it may be that HP's decision to close its print-cartridge production here boils down to a much more basic reason: it can no longer fully sustain the production of a technology that the world is gradually turning its back on.

While most offices still use printers, people are using them less and less. Even the home-printed airplane boarding cards we kept our printers for aren't a reason anymore, now that smartphones act as boarding cards.

Bills and bank statements frequently arrive online rather than through the post. Even middle-aged managers no longer 'print off' emails the way they used to when dreaming of some golf outing.

And in case anyone is thinking that 3D printers might ride to the rescue, that also seems unlikely. The 3D printer market is still a comparatively small sector worth around €12bn per year. Its prospects remain niche for the foreseeable future.

This not to say that the printing or PC markets, both of which HP were primarily linked to, are dead. Both sectors still have huge residual businesses, even if that is starting to retreat from the consumer market back to purely office-based ones.

In this context, it's worth noting that HP remains a profitable company (to the tune of over €3bn last year).

But the company's long-term future does not lie in inkjet printers.

For stressed workers hearing that they no longer have a job, the only minor ray of sunshine is that it will be far easier to get alternative employment now than it would have been in 2011 or 2012.

It's not just that our unemployment rate has halved in the last five years, or that most big companies are hiring. Big US tech firms are generally perceived to have advanced working processes that are aped by rival sectors. Recruitment firms say that those familiar with such workstreams are considered eminently employable by alternative employers which, themselves, are seeking to modernise systems.

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