American plants: they came, they set up shop, they're glad they did
Limerick, Ireland — John A. Bertrand is a tall, good-humored American whose A. O. Smith Company has made electric motors for air conditioners and refrigerators in Bray, County Wicklow, south of Dublin, for the last five years.
Tom Urwin is the no-nonsense managing director of Analog Devices, a US-based integrated-circuit company turning out circuits in the Raheen industrial estate in Limerick, on Ireland's west coast.
Both head US companies attracted to Ireland by a mix of tax incentives, high depreciation, and low costs. Both export worldwide from Irish ports, Mr. Bertrand by sea, Mr. Urwin by air. Both are part of Ireland's rapid expansion of manufactured exports in the last decade. Both criticize Ireland for various drawbacks, ranging from poor telephones to bad roads and a lack of experience in handling modern business and technology.
But both, in separate interviews on opposite sides of Ireland, say they and their companies are glad they came. "For us, Ireland has worked," Mr. Bertrand sums up.
US businesses are a vital part of Ireland's concentrated efforts to create new jobs for its young population -- the youngest and fastest-growing in Europe.
Of the 35,600 new jobs promised to Ireland by local and overseas companies in 1980, 8,500 came from the United States -- about half of all those from outside the country. Total US investment promised during the year: $243.1 million.
It was the eighth year in a row America had led all other countries in establishing plants in Ireland. Also in 1980, the US Department of Commerce reported that the average rate of return achieved by US subsidiaries in Ireland was 29.4 percent -- the highest in the world.
John Lyons, senior executive with the Irish Industrial Development Authority (IDA), says the exact figure is less important than the fact that American companies are making money here -- and staying once they've come.
"General Electric is opening its fourth plant in Ireland," Mr. Lyons said in an interview in Dublin. "Abbott Laboratories is starting its fourth, Westinghouse has six plants now. Pfizer has three. Digital [Equipment] computers is to open its second.
"Seventy percent of all profits are reinvested in Ireland. We in the Development Authority look for high-technology plants employing 100 to 200 people. We offer a basic rate of corporate tax of only 10 percent, high start-up write-offs, and all the help the government can give once a plant is off and running."
"Yes, indeed," said Mr. Bertrand as we looked out over his clean, modern factory floor where about 100 men and women, mostly young, assembled electric motors for A. O. Smith Company of Milwaukee.
"IDA does what it claims. It has stood by us and helped us. It's a good outfit."
A. O. Smith came to Ireland in 1978 because it wanted a base in the European Common Market. Mr. Bertrand and other executives looked at England, Belgium, northeastern France, and Ireland. "IDA came to us in Chicago," he recalled, "telling us of its tax incentives. At that time, it was nontax on exports until 1990, a situation we still enjoy.
"We gave up on Belgium -- you can't shed any labor there --lowest costs.
"The language is English. The people work hard. The country is stable.
"The telephones drove us wild for a while, but IDA helped. Eventually we got the six lines we wanted. Roads are just dire -- poor -- but we have a port nearby at Waterford, and container ships take our motors to Europe and beyond.
"We hire more young men than we would do in the US, mainly because young women here have many children and lack nurseries to care for them while they work. But Ireland has worked out well for us."
Over in Limerick, Tom Urwin smiled and said, "IDA is behind you, no doubt about that."
Analog, with worldwide sales of about $130 million a year, started in Limerick in 1976. It now employs 350 people and says it is the highest-technology company in the country --the only one fabricating integrated circuit wafers.
"We had a lot of problems with phones to start with," Mr. Urwin said. "We had to purify the local water supply and improve the industrial gas that came through the pipes: This area simply hadn't ever had to provide the kind of super high quality that we needed. Now local supplies are much better.
"Irish people work well. Education is good, though it will be several years before it turns out enough of the high skills we need. We can't work women on a midnight shift because of Irish legislation against it, and I don't think we could start a Sunday shift.
"But we've done well. We wanted a low-cost manufacturing base and we found it here."
Not all overseas companies have done as well. Wrangler, the jeans company, has pulled out. Nippon Electric decided on Scotland instead. At times the IDA has to spend far more than it would prefer to attract the kind of industry it wants: the US company Mostek, for instance, and Fujitsu.
There is some evidence that the spinoff from new businesses is not being exploited as quickly as it might be.
Ireland continues to pull in health care, engineering, and above all electronics companies. The Georgia Institute of Technology is to manage a new European research center in Limerick, financed by the Irish government.
Fifty US projects were promised last year, ranging from General Electric to Beehive Data terminals, from Bausch & Lomb to Moog and Verson. Of the 21,500 jobs the IDA hop es to snare from abroad in 1981, 14,000 are to come from the US.