3Com won’t confirm closure

4 Sep 2003

Reports that networking equipment manufacturer 3Com is to close its manufacturing plant at Ballycoolin, Blanchardstown, with the loss of 600 jobs have still not been confirmed by the company.

A few minutes ago, the company released a defensive statement that neither confirms nor denies the rumours that have spread like wildfire since this morning.

“3Com does not comment on speculation,” the statement said. “As we have consistently said, we are continuously reviewing all our operations on a worldwide basis. This is to enable us to make the necessary decisions to ensure that we remain a tier-one provider of innovative, practical and high-value networking products for enterprises of all sizes and public sector organisations.”

A spokeperson for 3Com added that work was continuing on the site as usual and that employees had not been given any more information than that contained in the statement.

Meanwhile, Brendan Butler of ICT Ireland, the IBEC lobby group for the tech industry, said that the closure, if confirmed, would be “very disappointing and a major blow” for the sector. He also said that it would be a “wake-up call” to manufacturing firms who had not looked at ways of securing the long-term future of their operations.

“Companies that depend on manufacturing look closely at their competitive position. The approach being taken by most manufacturing companies now is to diversify by offering a basket of services – companies like Apple in Cork that handle several different functions for EMEA region. That’s definitely the way forward.” He added that, if confirmed, the decision to retain R&D at the site would be encouraging as this is one of the “key areas” for the future health of the Irish economy.

Butler was hopeful that the 3Com employees, especially the more highly skilled of them, would manage to find alternative positions. “If you look at last nine months, we’ve had substantial job announcements by six or seven major world players. The ICT sector created 4,000 new jobs last year and it looks like that total will be met again. There is recruitment going on and new operations are being established.”

The US multinational, which has been manufacturing in Ireland since 1991, at one time employed over 1,000 people at the site.

The company has been badly hit by the global tech downturn, particularly by the fall-off in spending on telecoms and data equipment. In the past three years severe competition, falling sales and a pricing squeeze have all put severe pressure on the company’s profit margins. Two years ago, the network equipment maker underwent a considerable restructuring process, exiting from parts of the business that were deemed unprofitable, such as high-end networking kit for telecoms companies as well as its traditionally strong modem manufacturing.

Over the past few years, 3Com had shifted some manufacturing from Ireland, the US and Singapore to lower cost countries. However until today, the Irish business had managed to avoid major job cuts and the management seemed confident that the business was over the worst of the tech crisis.

By Brian Skelly