Caterpillar’s unsettling track record in Northern Ireland

There is nothing like the promise of £1.2 million to help "cement relationships" and persuade US firms that Northern Ireland is "an attractive investment location".

First Minister Peter Robinson and Deputy First Minister Martin McGuinness have just completed a five-day visit to Boston and Chicago to meet "existing and potential investors", attend conferences and no doubt yet again explain to political leaders in the United States why Northern Ireland still has not got its act together.

In between all of this they managed to squeeze in a well-timed investment announcement at Caterpillar’s headquarters in Peoria.

The US engineering giant plans to reorganise its production facilities in the North (formerly known as FG Wilson) to produce Cat-wheeled material handlers that are used in the scrap, recycling and forestry sectors.

According to Caterpillar, this new production line will require a £7 million capital investment and, once operational, will create about 100 additional jobs.

New jobs are always welcome in the North, particularly when they are created by an organisation like Caterpillar, which last September axed 750 jobs across its four sites in Northern Ireland.

It must have been something of a bittersweet moment for those ex-Caterpillar employees, many of whom are probably still struggling to find new manufacturing jobs in Northern Ireland, to hear the North's two political leaders praise
the organisation for deciding
to reinvest.

Local communities
Forget for a moment that the 100 new jobs may have the potential to generate salaries of around £2.2 million and remember just how hard the loss of 750 jobs has hit local communities such as Larne, Springvale in Belfast and Monkstown.

Because Caterpillar is diversifying its production capabilities in the North into a new line of manufacturing, there is the hope that it will in time bring other new work to Northern Ireland, which will ultimately create more jobs.

But in the meantime, the
fact that Invest NI has offered Caterpillar £1.087 million of financial support and the North's Department for Employment and Learning has also agreed to give it £220,000 towards the cost of the investment project just doesn't sit right. Should you reward a global organisation for pulling out manufacturing jobs and relocating them, as Caterpillar moved those Northern jobs
to China?

Of course, this latest investment by Caterpillar could have gone the same way and it would be naive to suggest that Invest NI should not use everything it can throw at potential investors to persuade them to create jobs in Northern Ireland.

No one is denying that the North is at times a difficult sell but this is not the first time in Northern Ireland that an inward investor has axed jobs on one hand and received a cheque in the other for subsequently deciding to reinvest.

The best example of this is the US call centre group Stream Global Services.

At one stage, Stream was one of the largest employers in Derry, with a workforce of nearly 1,000 . But by 2011 it had shut up shop in the city.

But guess who announced plans to create 1,000 jobs in Belfast earlier this month in an investment project that will receive £3.3 million in financial support from Invest NI and the Department for Employment? None other than Stream Global Services.

According to Stream, the new Belfast jobs are a completely unrelated to its former operation in Derry.

These have come about because Stream acquired a UK-based company called LBM that had been eyeing up an expansion to Northern Ireland – it was just serendipitous that Stream acquired LBM before the all the paperwork was done on its new Northern Ireland investment.

Uncomfortable questions
Either way the past performance of both Caterpillar and Stream Global Services in the North throws up some uncomfortable questions about how successful Northern Ireland's investment strategy really is.

As Robinson and McGuinness know only too well, money cannot buy you friends – and real friends don’t pull the rug or jobs when economic cycles let you down – but it might be time for Northern Ireland to rethink its strategy on winning job-creating investment.