The announcement that the Square D electrical circuit manufacturing plant in Ballinasloe, Co Galway, is to close with the loss of 385 jobs is a heavy blow for the workers involved and for the region.
Falling demand for the electrical circuits it produces, reflecting the downturn in the telecommunications sector, led to the decision by its parent company, Schneider Electric, to close the plant.
The Tánaiste, Ms Harney, promised that every effort would be made by the State industrial agencies to bring new jobs to the area. However she conceded that doing so would not be easy - which is clearly the case given the difficult economic climate. Unfortunately business investment in many sectors remains depressed, due to a combination of the difficulties in the information technology and telecommunications sectors and the generally nervous economic climate.
IDA Ireland has had some success over the past couple of years in spreading investment around the State and says it has an encouraging pipeline of new investment projects, particularly in the pharmaceutical/biotechnology sector. However, in a difficult climate it cannot deliver new projects on demand in specific locations.
Unfortunately, the outlook is that more manufacturing plants are likely to close over the coming few years, due to a combination of difficult markets and the increased attraction of moving many operations to low-cost locations. Yesterday in a separate announcement Boart Longyear announced the closure of a division in Shannon employing 40 people.
The challenge for Government policy is to get the multinational firms based here to move into higher-value activities based on innovation and research and to win new investment in these areas. The Republic will simply not be able to compete with low-cost locations for basic manufacturing operations.
The other key policy aim must be to ensure balanced regional development. If industries are to locate outside major urban centres, then they must have a reason for doing so. There is an enormous task in building up the necessary infrastructure - guided by the National Spatial Strategy - and in finding appropriate industries for the regions.
In the short term, no effort must be spared in seeking replacement jobs for Ballinasloe. However, in the longer term jobs can only be protected if companies move into high-value activities - and new investment will only be won for the regions when the necessary infrastructure and environment are in place.