Did this come back to bite them in the butt?

boardy

WORKERS at the Hospira plant in Co Donegal made an unsuccessful special pay claim over a year ago when the company changed its name from Abbott Laboratories to Hospira.

Of the 14,000 of Abbott's 60,000-strong worldwide workforce transferred to their medical devices subdivision Hospira, they were the only ones to do so.

Hospira informed its workforce in Donegal yesterday morning that it would shut its Donegal manufacturing plant by the end of next year. The work will be transferred to lower cost plants in the Caribbean.

(From the Irish Independent on Aug 24, 2005)

Flukey

I don't think you can blame it on that. It is just part of a wider trend of moving manufacturing out of Ireland to cheaper economies. With or without those pay rises, this type of thing was likely to happen. Manufacturing is just too expensive here.

segadreamcast

If you listened to 5-7 live, this debate kind of broke out during their talk about this - and they all but conceeded that they had, essentially, lead to their own dismissal with the 11% pay rise demand.

I doubt the move would've happened, they had only renovated the factory last year - not much has changed in a year, except for that wage demand.

boardy

I am amazed that there are still manufacturing companies here - it just makes good business sense to move these companies to a cheaper labour market environment.

However:
"SIPTU and the TEEU craft union lodged a special claim for compensation over the name change. Last year the Labour Court was told by management that of 14,000 employees, out of Abbott Laboratories total of 60,000, who moved to the new Hospira worldwide division, the 420 production and maintenance workers in Donegal were the only ones to demand a special goodwill payment. Earlier this year the Labour Court ruled against the claim."

Is it me, or was this a ridiculous demand?

segadreamcast

boardy wrote:

I am amazed that there are still manufacturing companies here - it just makes good business sense to move these companies to a cheaper labour market environment.

However:
"SIPTU and the TEEU craft union lodged a special claim for compensation over the name change. Last year the Labour Court was told by management that of 14,000 employees, out of Abbott Laboratories total of 60,000, who moved to the new Hospira worldwide division, the 420 production and maintenance workers in Donegal were the only ones to demand a special goodwill payment. Earlier this year the Labour Court ruled against the claim."

Is it me, or was this a ridiculous demand?

Absolutely. That's why I have very little sympathy for them as of this moment. It highlights one of the biggest problems that the country is facing.

Flukey

I didn't hear 5 7 Live, but even without the pay deal they would have moved at some stage. Maybe it did make it happen sooner, but manufacturing has been fleeing places like Donegal for cheaper economies for a long time now. It is nothing new.

segadreamcast

Yeah - obviously that's the trend, but demands like this certainly aren't helping the situation. They really need to look forward out there - e.g. what can be done... they need to latch onto this model of a knowledge-based 'added-value' style economy.

Eoin

I hope I have missed something glaringly obvious, but can someone explain to me why they wanted a pay increase in the first place?

boardy

I think that there is a consensus out there that we have to go in the "professional services" direction in order to sustain our growth.

The point I (ex-union member) was eluding to was the stranglehold of the unions over the manufacturing sector (and business in general).

Flukey

Well labour, materials and many other costs make it cheaper to set up businesses elsewhere or move them from here. It is far more than just the labour costs. If the wages are low in other countries, then a lot of the other things they have to pay for will be low too, but they can still charge the same prices in their markets.


Our advantage is a high skilled workforce, but in more technical areas. Production line skills don't fall into that category. As we all know, it's areas like services, financial skills, technical skills etc. that our economy has moved toward. Work around infrastructure and building in general has been a growth sector. Tourism has grown and has a lot of potential if it was managed properly. The old industries are dying now. The 70s and 80s killed off a lot of them. The boom in the 90s held some of them afloat even as work migrated towards the other areas. They are dying off now though.