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March 6, 2007
By: Jamie Matusow
Editor-in-Chief
Procter & Gamble Co. could be on the verge of pulling out of Ireland and shifting operations to Poland, politicians and labor union officials said. The 600 employees of the Proctor & Gamble plant in Nenagh, County Tipperary, were told Tuesday not to go to work and to await an announcement from company executives. The Irish government, which in 1999 provided a $34 million grant package to help P&G’s Nenagh plant expand, said it feared that the operation was facing closure. P&G officials in Ireland declined to comment. “The company is anxious to speak to the work force first,” said Employment, Trade and Enterprise Minister Micheal Martin, whose department seeks to woo multinationals to Ireland. “We will do everything we possibly can to support and be of assistance to the employees, regardless of whatever announcement takes place.” Workers at the Nenagh plant have feared for their jobs since January, when executives of Cincinnati, OH-based Proctor & Gamble said they were considering shutting down one of their European manufacturing facilities. Those anxieties increased in mid-February when reports circulated in Nenagh that the company was planning to open a new cosmetics factory in Aleksandrow Lodzki, Poland, in 2008. The Nenagh plant, opened in 1985, is the biggest employer in the town. It makes products for the Max Factor and Cover Girl makeup ranges, Oil of Olay skin products, and shower gel for the Hugo Boss and Laura Biagiotti brands. Ireland has been Europe’s biggest economic beneficiary of globalization over the past decade. Hundreds of high-tech multinationals, particularly in the computer and pharmaceutical industries, have chosen Ireland as a low-tax, low-wage, high-skill base for the European Union. Ireland’s unemployment rate of 4.3 percent is among the lowest in Europe. But that appeal has been fading since the EU’s expansion into the formerly communist east, where workers’ skills are improving and wage levels are much lower. While Ireland’s corporate tax rate of 12.5 percent remains one of the lowest in Europe, its wage costs and cost of living have shot up rapidly, making it less attractive for foreign investors. A string of foreign multinationals have closed shop or cut employee numbers in Ireland. Last month drug maker Pfizer Corp. said it planned to close two plants in Cork, southwest Ireland, and lay off 545 workers.
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