For merchants in the grimy Northside Shopping Center outside Dublin, the fashion this fall will be one of belt-tightening retrenchment.
They worry that the expected layoffs of 900 workers at the nearby European headquarters of computer maker Gateway Inc will dent their sales of clothes, groceries and other staples -- not to mention the trade in mobile phones and package holidays.
PHOTO: AP
"The whole shopping center is going to feel it,'' says produce vendor Robert Daly.
When San Diego-based Gateway announced plans last week to close its assembly plant and other operations in Ireland, the effects rippled out well beyond the local shops and pubs frequented by its employees.
Workers have lost jobs at other foreign companies that invested here to make computer parts and software for export to the rest of Europe. But Gateway's closure marks the largest such loss in years.
With high-tech businesses facing a global collapse in sales, some analysts fear Gateway's decision could portend a wave of big layoffs at the mostly US technology companies that until now have propelled Ireland's phenomenal Celtic Tiger economy.
"I think the Gateway decision in itself is a non-event," said Danny McCoy, an economist at The Economic and Social Research Institute, a think tank in Dublin.
"But as a talisman, in terms of confidence-effect, I think it's sent a shudder through the Irish economy."
Gateway's decision resonates with symbolic significance because it was here, at the company's factory in an industrial park near the Dublin airport, where former US President Bill Clinton stopped during an official visit in 1998 to salute Ireland's booming economy. "The Celtic Tiger is roaring, and you should be very proud of it," Clinton told Gateway workers.
Ireland, with a population of only 3.8 million people, has benefitted greatly from investments by the likes of Dell, Compaq, IBM and Gateway.
US investors began arriving here en masse in the late 1980s after the government, seeking to kindle growth in a moribund economy, cut taxes on corporate profits and devalued the Irish pound, making exports more competitive. Ireland had an educated, English-speaking work force, much of it nonunionized, and it offered investors grants and other financial incentives. The Celtic Tiger economy began to roar.
High-tech businesses today employ just 5 percent of the country's workers, but they account for one-fourth of Ireland's exports, which together exceed the entire gross national product. Helped by Ireland's adoption of the weak euro currency, the trade-dependent economy surged by 10.3 percent in 1999 and 11.5 percent last year, when Ireland was the world's leading exporter of packaged software.
However, faltering growth in Europe and the US means a slowdown is almost inevitable, and Gateway's announcement is a sobering reminder of Ireland's vulnerability to external market forces.
The company's decision to close its European headquarters here had little to do with Ireland itself. The fourth-largest US computer manufacturer is struggling to make a profit in a weak global market for PCs and has decided to concentrate on boosting its US sales.
Gateway won't start closing its Irish operations until early September, after completing a 30-day consultation with representatives of its nonunion work force. The company, which already cut 200 Irish jobs earlier in the year, said it would withdraw from Ireland by early next year.
"We'll definitely have more losses. There are some companies that are clearly exposed," said Denis Molumby of Ireland's Investment and Development Agency, the official body responsible for attracting foreign investment.
Intel and a few other US tech companies have postponed plans to expand their Irish operations, and visits to Ireland by prospective investors have almost halved compared to last year, Molumby said. Yet he stressed that he didn't foresee a meltdown in Ireland's high-tech sector.
Market conditions for software developers and other higher value-added businesses are better than for assembly plants like Gateway's that employ a less-skilled work force, argued Oliver Donohoe, spokesman for the Irish Congress of Trade Unions.
"We don't see any need for panic," he said.
But Donohoe said that Ireland would be "doing very well" to achieve a growth rate of 4 percent in the near future.
At Northside Shopping Center, merchants will count themselves lucky just to hold even. Daly, the produce shop owner, expects Gateway's layoffs will cost him 5 to 10 percent in lost business.
Unlike other Friday evenings, no one from Gateway was among the patrons nursing pints of Guinness beer at Liz Delaney's, a dingy pub adjacent to the shopping center.
Pub manager Noel Price said Gateway employees used to drop by for lunch and hold company parties there. That's all changed with the layoffs looming.
"It's not going to close us down or anything," he said, ``but we will notice it.''
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