The closure of the General Semiconductor plant in Co Cork with the loss of 670 jobs is evidence that the global downturn is finally beginning to bite at the heart of the technology sector in the Republic.
The Macroom plant, like the Gateway facility in north Co Dublin, which is also due for closure, is at the most vulnerable manufacturing end of the technology spectrum. In any downturn, such jobs are first to go.
The closure announcement brought a swift response last night as the Government moved to try to minimise the economic damage to the town and surrounding region. The US-owned company was one of the largest employers in Munster.
The Taoiseach, Mr Ahern, and the Tanaiste, Ms Harney, promised an immediate drive to find a replacement industry for Macroom. Ms Harney, who is to visit the town on Monday, said that a task force would be set up with the help of the IDA and FAS.
Ms Harney rejected any suggestion that the closure was symptomatic of a deterioration in the competitiveness of Ireland's economy. It was a further reflection of the downturn in the US technology industry, which was causing concern to the Government because of its impact on the sector in Ireland, she said.
Ms Harney added: "I remain confident that the fundamentals of the economy are strong. There is still a strong labour market out there with opportunities continuing to arise across many sectors."
General Semiconductor has been the mainstay employer in Macroom since 1982, and employment figures at the plant had grown steadily since it opened. Four years ago more than $30 million was invested in upgrading the plant, and despite a general downturn in the semiconductor sector it was felt that the company would be in a position to weather any storm.
As a sub-supplier to the prominent brand names in the technology sector, companies such as General Semiconductor represent the less well-known side of the Republic's technology industry.
While big companies such as Intel, Dell, IBM, Oracle, Microsoft and Hewlett-Packard tend to get most attention, the Cork company is one of a large number of sub-supply companies. Most of these are much smaller than General Semiconductor and many of them are indigenous.
Sub-suppliers make components for incorporation into products bearing better-known company names and are crucial, if low-end, providers of jobs throughout Irish industry. For the most part, these electronics positions are not highly skilled.
Sub-suppliers form the bedrock for the knowledge industry, providing the components and services needed by the global players. The IDA actively markets the existence of many sub-suppliers as one of the key attractions of locating in the Republic.
The loss to Macroom in terms of salaries and bought-in services will amount to at least £30 million annually.
The Fine Gael TD Mr Michael Creed said last night that Macroom had become a classic example of a rural town depending excessively on one industry. While the "kneejerk reaction" in such situations appeared to be the establishment of a task force, what was needed was a "concentrated and focused approach".
The Fianna Fail TD Mr Donal Moynihan said he had spoken to the Taoiseach, who had told him that everything possible would be done to restore the town's economic equilibrium.
The Green Party said that news of the Macroom closure would "send a chill throughout the country", particularly to many small provincial towns. A party member of Cork County Council, Mr Dan Boyle, said that it would have a far greater impact than the Gateway shutdown in Dublin.