High wages blamed as 315 jobs lost to eastern Europe
HIGH costs in Ireland compared to eastern Europe were again blamed for hundreds of manufacturing job losses yesterday.
Teva Pharmaceuticals, which employs 38,000 people across 80 countries, is to stop the production of generic tablets at its Waterford base.
It is expected that much of the lost manufacturing will be transferred to low-cost operations in Hungary, Croatia, Poland and the Czech Republic, where wages are understood to be as low as one-third of what they are here.
Shocked workers were told the news yesterday at a meeting in the Waterford city plant, with 315 out of the total workforce of 730 set to be made redundant.
Generous
The redundancies, both voluntary and compulsory, are due to take place on a phased basis from early next year until the autumn, and management have promised a "generous" severance package for those affected.
According to the Israeli-owned Teva group, the closure of its oral solid dose (tablet manufacturing) facility is "due to the challenges of operating in a high-cost and difficult economic environment in Ireland".
Managing director Tom McCabe said yesterday that high wages in Ireland were one factor contributing to uncompetitiveness, along with high energy and infrastructure costs.
He said that, despite halving the cost of tablet production in the past few years, it was still three times higher than the same process in eastern Europe.
Management and staff had done "a huge amount" to increase efficiency, he said, "but it's not enough. We've lost out to those lower-cost economies."
Teva has committed to providing training and outplacement services to those made redundant in the coming year and Dr McCabe acknowledged yesterday that staff were "devastated" after being told the news.
Workers losing their jobs will receive about six weeks' salary per year of service in their redundancy package.
He said the company's future in Waterford, where it would continue its inhaler-manufacturing facility -- which has lower costs than tablet production -- as well as research and development, is secure and it has invested €75m in upgrading its local operation.
But this latest jobs blow prompted calls for government action for the region, with the mayor of Waterford demanding that a special taskforce be set up. There have been a series of factory closures and cutbacks in recent months.
SIPTU have described the news as "a shock" to workers and their families and said the Government needs to step in to provide alternatives for those losing out.
An official said manufacturing jobs were worth about €650-€700 a week to Teva employees but in eastern Europe it could be as little as one-third of that rate.
Michael Fitzpatrick, who has worked at the plant for 19 years, said the first staff knew about the job losses was yesterday.
"People are just walking away and they're shocked. They're shell-shocked," he said after the staff meeting.
Abandoned
Waterford mayor councillor John Halligan said that when Dell announced it was phasing out manufacturing in Limerick, Defence Minister Willie O'Dea had a taskforce set up "within days" of the move.
"I think people genuinely believe they've been abandoned by the Government here in Waterford."
Mr Halligan said that the most positive step the Government could take would be to redesignate Waterford Institute of Technology as a university, to promote inward investment.
Fine Gael TD John Deasy called on the IDA and Enterprise Ireland to give advice and support to save businesses and jobs at risk in the region.
"Our government representatives need to stem the momentum of decline that seems to be gripping Waterford city," he said.
Labour TD Brian O'Shea said it was "incumbent" on the Tanaiste "to leave no stone unturned in the effort to ensure the future viability of the company and to seek to retain every possible job".
- Conor Kane
