For Clonmel, Seagate Technology's drastic downscaling of its disk manufacturing plant is a nightmare revisited. Digital closed its manufacturing plant there in 1991, with the loss of 350 jobs for the south Tipperary town, although 100 of these were relocated to Galway.
Seagate, the California-based computer group which is the world's leading manufacturer of disk drives, reported revenues of $9 billion for its 1997 fiscal year. However, the group suffered a sudden drop in its fourth quarter profit, announced in July.
The company employs 1400 people at its two-year-old disk-drive assembly plant in Clonmel, Co Tipperary - which is now to close - and also has 1500 employees in two manufacturing and assembly plants in Co Derry.
The Clonmel operation received almost £10 million in IDA grants last year, the second largest amount after Intel, which received over £26 million. The company is now to repay more than £12 million of the £14.2 million in grants received since its establishment in Clonmel.
Seagate had plans to increase its workforce in the North and in the Republic by 2600. Of this figure, 1000 had been earmarked for a project planned for Ringaskiddy, Co Cork. This project was indefinitely postponed in October.
There were also plans to take on 1600 people at Seagate's two Co Derry plants over the next two years. It was announced yesterday that the expansion in Derry was being postponed.
Seagate did an about-face on a plant proposed for the Clonshaugh Industrial Estate in Dublin in 1991, insisting it was `on hold' in the wake of a global rationalisation plan. This included plant closures in Scotland and Portugal, because of a recession in that sector of the computer industry.
However the company located in Derry in December 1992, and moved into the former Digital premises in Clonmel in June 1995.
Last October Seagate gave the first hint of its current woes, letting go 160 temporary workers at its disk-drive assembly plant, test plant and clean room in Clonmel and postponing the plan for a £148 million plant, which would have employed 1000 people, in Ringaskiddy, Co Cork.
At the time the company stated that the two decisions were unconnected.
When Seagate announced its decision to locate in Clonmel two years ago, it said it had "a very aggressive ramp schedule" for production of the Decathlon 1080, a 3.5 inch hard disk with one gigabyte of memory. The company undertook to employ 1000 people over three years.
Its executive vice-president, Mr Ron Versoorn, said then that any downturn in the volatile market would have little effect on Clonmel.
Mr Robert Kundtz, Seagate's senior vice-president in charge of administration, said at the time that the life-span of the gigabyte disk drives was "measured in terms of months" but they would be upgraded by Seagate's research and development units.
The then Minister for Enterprise and Employment, Mr Richard Bruton, said Seagate was "a tremendous friend" of Ireland.
Just over a year later the plant closed for two weeks to allow for the installation of new machinery.
In July, Seagate announced weak fourth-quarter profits of $59.8 million on revenues of $1.98 billion, compared with $101 million on $2 billion revenues for the same period in 1996.
The announcement of the Co Cork postponement came last October, because of a declining growth rate in sales of magnetic disks, used in servers or mid-size computers, and a fall in product prices.
At the time the company insisted it was "a deferral," and an IDA spokesman said that he expected the project to run about six months behind schedule.
The plants in Co Derry, which are involved in different aspects of disk production, have seen continual expansion since the first one was established in Springtown Industrial Estate, Derry, in 1993. They took on an initial 250 employees, rising to over 700 by 1996, and now over 1000.
Seagate announced in June that it would create an extra 1125 new jobs in Derry, more than doubling its workforce in the city. This expansion is now postponed.
It also plans to increase numbers at its year-old Limavady plant in Co Derry by about 350 from the current 400 within two years, when the plant will be at full production.
The Cork project to create 1000 jobs at Ringaskiddy was postponed in October because of global trends in the magnetic disk market. Recent consultancy reports pointed to the sluggishness in the `high end media' market sector, the heaviest user of disks and what is regarded as a difficult area in which to predict advance demand.
The £148 million project would have involved production of high-performance magnetic drives.