Nearly 3,000 jobs have been axed from companies in the North West supported by Invest Northern Ireland, analysis by the Belfast Telegraph today reveals.
Further jobs are at risk at Stream International and possibly at Allstate.
Of the nine leading beneficiaries of Invest NI, who were offered in excess of £50m in grant assistance, and its predecessor agencies prior to 2005, six — Stream, Seagate, Raytheon, DuPont, AVX and Huco — have substantially cut jobs.
A spokesman for Invest NI said: “Offers (of financial assistance) aren’t always associated with employment creation. Each is individually negotiated.”
There are fears for the future of another two companies — Allstate and Perfecseal — while the ninth, HML, is reportedly up for sale, though its owners will not confirm or deny this.
Allstate — formerly known as Northbrook Technology — declined to comment when asked about its continued commitment to its operations in the North West.
It currently employs 391 people in Strabane, 238 in Derry and 998 in Belfast.
The US parent corporation reported a $1.68bn loss for 2008 and is looking to reduce its employment levels globally.
AVX, which had 980 staff at its |Coleraine plant in 2005, failed to respond to requests for information on its current employment levels and intentions for the future.
But an employee contacted by the Belfast Telegraph said “about 300 people” work in the factory now.
The company moved some of its production capacity to the Czech Republic.
Substantial job reductions have also taken place at DuPont. Four years ago, DuPont employed 650 at its Maydown facilities. The company now employs 180 staff there.
But Ana Villalpando in the company’s Swiss offices says the firm remains committed to the plant.
“Our Derry/Londonderry site has proven to be a great success since it was established,” she says. “It is a key part of our company’s operations and has a pivotal role to play in our future growth plans.”
Defence contractors Raytheon, also based in the US, have already cut staffing levels in Derry.
The company had 50 staff on site, but a company spokesman now says it retains just “a small cadre” of |specialists.
The German-owned Huco company, another recipient of Invest NI support, now has only a very small operation in the North West, employing just five or six people. It previously had 30 employees.
Managing director William Donaghy says: “We have moved production to India. Technical support and back office staff are in Limavady.” Mr Donaghy explains there are “ongoing discussions” with Invest NI about financial aid provided in the past.
Seagate closed its Limavady plant, which had received Invest NI support, last year, with the loss of 900 jobs.
The company says it currently employs 1,342 full- time staff in Derry and another 108 temporary operators.
There are major fears for the future of Stream International, one of the largest recipients of Invest NI support, which employs about 640 people at present — compared to a peak of 1,200.
About 250 of its workers have been placed on protective redundancy notice, following the loss of the company’s major contract. The company failed to respond to requests for a comment on its current position.
Enterprise minister Arlene Foster says that Invest NI is working closely with Stream to provide support to help it secure new business to minimise the number of individuals affected by its contract loss.
INI under fire
Disclosure of high levels of job losses amongst companies supported by Invest Northern Ireland is likely to lead to demands for repayments of grants provided by taxpayers.
However, an Invest NI spokesperson said it is not as simple as that. “Offers (of financial assistance) aren’t always associated with employment creation,” the spokesperson said.
“Each is individually negotiated. There will be a control period of time in which we could recover clawback.”
In many cases, the spokesperson explained, a grant was paid sufficiently long ago that there would no longer be any requirement for repayment of financial aid where a company cuts jobs or closes a facility.
Invest NI paid £11.16m from 1999 on to Seagate towards the costs of its Limavady factory, on which £7.9m was repaid in April this year.
Stream International has been offered grants of £2.3m since 2000, of which £1.2m has been paid out said Invest NI.
At present the company is not in breach of its obligations resulting from the grant conditions, so it is premature to discuss possible repayment, said Invest NI.
Stream failed to respond to requests to discuss its situation. Seagate said it remains committed to its Derry factory. HML said its facility had been “a great success” and it remained committed to the operation.
But Invest NI is criticised for not doing more to improve the business infrastructure in the North West.
Keith McCracken, head of European operations at US-owned Perfecseal, said that if planning permission is granted for a waste management operation near the company’s 17-acre facilities at Campsie in Londonderry it will be forced to move. Perfecseal produces packaging for health products that require high standards of cleanliness and hygiene.
Mr McCracken said: “We have room to grow and to create more jobs. But it’s critical that the business infrastructure is right. The infrastructure for business in the North West is inadequate.
“We have been lobbying politicians and public sector bodies such as Derry City Council and Invest NI to develop and execute a strategy to provide an environment for business that is in line with that found elsewhere in the UK and Ireland.
“The critical message is that whilst Invest NI can provide financial support, the fundamentals of the platform for business must be right. Otherwise businesses will wither and die.”
Foyle MP Mark Durkan is meeting Invest NI today to discuss local job losses. Mr Durkan said: “It is essential that Invest NI provides all appropriate assistance to employers in the North West, particularly as an area of economic disadvantage.”
He believes that Invest NI has focused too heavily on promoting low paid contact centre jobs, rather than sustainable and higher paid jobs.