Irish
Up to half US firms in Ireland considering moving some activities overseas; 8.7% of firms are considering winding up their Irish operations entirely
By Finfacts Team
May 21, 2007, 07:48

US chip giant Intel is Ireland's largest industrial employer. Since 1989, Intel has invested over $7 billion transforming the 360 acre former stud farm campus in Leixlip, Co. Kildare into a state of the art manufacturing centre of excellence. Intel’s Leixlip campus is County Kildare is Intel’s fourth largest manufacturing site and the largest fabrication facility outside the United States. The campus employs over 5,500 people, directly and indirectly. There are currently four semi-conductor factories or FABs on site; Fab 10 and Fab 14 have merged to form Ireland Fab Operations (IFO), Fab 24, and the recently opened Fab 24-2 which is one of the most technically advanced, high-volume semiconductor manufacturing sites in the world. It produces the latest Intel products; the Intel® Core™ 2 Duo and Intel® Core™2 Extreme processors for consumer, business, desktop and laptop PCs.

A survey of US firms operating in Ireland that was presented last Friday by economic consultants Indecon to the US Chamber of Commerce in Ireland, shows that 43.5% firms are considering moving part of their businesses from Ireland.

Some 8.7% of firms are considering winding up their Irish operations entirely and about 48% are considering transferring some business functions from Ireland  and replacing them with other activities here.

Indecon Managing Partner Alan Gray, told the US Chamber that his report should no be a cause of panic.

"Strong structural adjustments," said Gray were part of "the ongoing and appropriate review of finding the best location for specific types of activities...the challenge for policymakers is to find replacement activities from other firms for any part of Irish operations which are relocated."

The survey sample size was 41 firms from a total of about 600 US companies operating in Ireland.

US firms in Ireland employ 100,916 compared with 96,000 in 2003.

The survey found that US firms here realised a profit from operations of 20% compared with an average return of 11% on US direct foreign investment. Only US firms in China achieve a similar margin.

US firms in Ireland use Ireland as a semi-tax haven to funnel profits from other overseas locations and some firms report impressive financial figures while employing a small Irish workforce.

US Chamber President and Intel General Manager Jim O'Hara has warned that energy costs in Ireland must be controlled.

"Whoever is involved in forming the next Government needs to be aware of fundamental uncertainties relating to energy costs and supply must be addressed as a matter of priority," he said. "There must be a plan of concrete action to return energy costs to at most the EU average within 3 years and maintain that relative position."

RELATED:

Need for a Balanced Perspective on the Structure, Performance and Prospects for US Foreign Investment in Ireland - - Paper Presented by Alan W. Gray, Managing Partner, Indecon International Economic Consultants to American Chamber of Commerce Ireland Dublin Friday 18 May 2007

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