Derry jobs disaster
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UTA closures will have ``disastrous consequences for the local
economy''
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The closure will create a major vacuum in the economy of the
city.
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``We regret the necessity of this decision, but please be assured
that the Company will work diligently to make the transition as
co-ordinated and equitable as possible''.
This is one way to tell the communities that make up the Creggan,
Bogside and Brandywell that their local economy has been
consigned to the scrapheap. It is how United Technologies, the
one industrial employer in the area, announced its decision to
close its automobile components factory with the loss of almost
600 jobs. Less than a year ago there were over 1,000 people
working at the United Technologies plant.
The closure of United Technologies will result in over £6 million
been sucked out of the local economy annually in lost wages. Sinn
Féin Cityside councillor Cathal Crumley told An Phoblacht that
the closure will ``create a major vacuum in the economy of the
city''.
This he says will exacerbate ``the problems which already exist as
a result of the systematic rundown of the area's economic
infrastructure. It is encumbent on us all to explore every avenue
possible to forestall this closure''.
The proposed shutdown puts huge pressure on an already severely
disadvantaged local economy. Recent surveys have shown that the
Creggan, Brandywell and Bogside wards endure the highest levels
of poverty, ill-health and unemployment in the Six Counties.
Councillor Crumley pointed out to that this area has been
``consistently ignored by the statutory bodies and the
administrators of international funding. It can little afford
such a devastating blow''.
The closure announcement is made more bitter by the fact that it
came only a day after workers were awarded a QS 900 award for the
quality of their work at United Technologies. So why is the plant
closing at all?
``Ever increasing pressures on prices,'' is the management excuse.
They did however find the funds to hire a public relations firms
to handle publicity surrounding the plant closure.
A spokesperson from the PR firm, GCAS, told An Phoblacht that the
parent company in the US was transferring the work done at the
Derry factory to plants in Spain and Portugal. United also has
plants in Hungary.
The closure and transfer of work to foreign plants is a very
similar story to that of Packard in Dublin. Packard produced
components for Opel, Vauxhall and General Motors cars. United
Technologies produces similar parts for Citroen and Ford cars.
Packard also transferred its work to foreign plants. It played
off one factory and one workforce against another. In the end the
Irish workers lost out. It seems as though the same fate has hit
the workers at United Technologies.
The issues that need to be addressed now are whether the plant
can be saved and what can be done to ensure that transnational
companies work with the local communities that host them, not
against them.
It seems unlikely that the United Technologies jobs can be saved
but that does not mean that the Northern Ireland Office and its
agencies cannot learn from this experience. They could take note
of the comments from a spokesperson for the Bogside and
Brandywell Initiative who said that the decision by United
Technologies showed that ``No lessons had been learnt by the
company over the past two years'' and that the announcement
displayed ``a total absence of any attempt to be democratically
accountable to the workers in the plant and the local
communities.
``Decisions such as today's must not be repeated. They exemplify
the absolute imperative of industrialists and employers working
in co-operation and partnership with Derry workers.''
Downside of the American dream
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They keep telling us how successful their system is. Then they
remind us not to stray too far from our hotel at night
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There are two sides to most stories and last week's Group of
Seven (G7) summit in Denver Colorado was no different. The G7
summit is an annual meeting of the leaders of the seven largest
industrial economies in the world. Its members include the USA,
France, Italy, Canada, Japan, Germany and Britain.
The leaders of these states meet annually to discuss what they
deem are the world's most threatening economic problems and agree
or not, as the case may be, to a collective course of action. At
last week's summit hosted by US President Bill Clinton the G7
leaders could not agree on adopting explicit targets for the
reduction of greenhouse gases.
They did agree on some bland toothless pronouncements such as the
need to improve job creation and opposing economic exclusion as
well as calling for better implementation of the Bosnian peace
agreement. They also enlarged the G7 to include Russia making it
the G8, even the though the EU is represented at the discussions
by the EU Commission President Jacques Santer, making it in
reality the G18.
The real meat of the summit was that the US hosts were seeking
formal recognition of what they perceive as their economic
successes of recent years. They have a low inflation, low
unemployment, high growth economy and they wanted the applause of
other leaders.
President Clinton told the other leaders that they could learn
from not only the ``Anglo Saxon approach'' but also from his
``Clintonomics''.
However, one official of a European government summed up the big
picture of the American Economic miracle when he or she told the
Financial Times ``They keep telling us how successful their system
is. Then they remind us not to stray too far from our hotel at
night''. Enough said really.
Fair wage or a millennium time bomb?
The ink was barely dry on the new Progressive Democrat/Fianna
Fáil Action Programme when the Small Firms Association (SFA) were
into the fray attacking the plan's proposals to introduce a
``national minimum hourly wage''. SFA director Brendan Butler
described the proposal as ``off the wall'' claiming that ``a minimum
wage would fly in the face of reality''.
Phoblacht contacted the SFA and asked Mr Butler why he was
opposed to the introduction of a national minimum wage. Butler
said it would ``price certain jobs out of the market''. It would
have a ``negative effect on competitiveness'' with a spate of
follow-on claims. A minimum wage is ``unnecessary because there
already is an established system of statutory minimum wage''
levels in some industries. It would ``not help those out of work''
and finally a minimum wage is a ``crude and indiscriminate
mechanism''.
``Let's finds a mechanism that can take account of variations
across industries and regions,'' said Butler. We pointed out that
the existing Joint Labour Commission on Wages in the hotel and
catering sector was currently unable to agree a new minimum wage
level leading to a situation where workers were earning as little
as £2 an hour. He was ``not familiar'' with this case.
The question was put as to whether employers could deliberately
maintain wages below a competitive level and he did admit that
``there is expolitation in the black economy and it should be
tackled''. Mr Butler claimed that his members had unfilled
vacancies where wages varied from £3.50 to £5 an hour. The
problem, he argued, was one of tax and social insurance payments.
Perhaps most interesting was Mr Butler's final comment. When
asked about a minimum hourly wage of over £4, he scoffed and
desribed this as ``German wage levels''. For the record, an hourly
wage of say £4.50 amounts to £180 for a 40 hour week and £9360
annually. On a weekly basis these ``German wages'' would leave an
Irish worker earning £130 less than the average industrial wage
for male workers in the 26 Counties.
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