Disproportional hit in Navan as Quinn jobs axed

Over half of the jobs at Quinn Insurance in Navan are to be lost as the company's administrators attempt to bring its cost base into line with its considerably reduced revenues. That was the bleak news that greeted workers in Johnstown last Friday afternoon as they learned that 109 out of a total workforce of just under 200 were to be let go, along with 300 or so in Blanchardstown and a further 226 in Cavan. It is a hammer blow to a town and county which now has over 11,000 people unemployed. The administrators stress the job losses are necessary to save the company and help safeguard a further 1,500 jobs. The reduction in revenues stems from a collapse in Quinn's UK business which had been making up about 40 per cent of the company's income. But even though the ban on writing new business for the UK has been partially lifted, the company is having to go back into that market with insurance premia about 50 per cent higher than it was selling, according to reports, which is obviously going to mean the amount of business being transacted will be less. It is all such a far cry from August 2006 when Quinn Insurance announced its plans for a new 700-job European headquarters at Johnstown as the group unveiled a strategy to aggressively grow its business into the UK and beyond, with a foray even planned into central and eastern Europe. To the delight of local business leaders and politicians, Navan's proximity to the planned M3, the availability of a young and educated workforce and backing from Enterprise Ireland were all cited as reasons for choosing Meath. The arrival of the global financial crisis and the banking meltdown in Ireland, however, not only tempered Quinn's ambitious plans to employ up to 700 in Navan, but also ultimately led to the unravelling of the finances of the Quinn Group and the insurance business entering administration. The announcement of Quinn's establishment in Navan was the first major jobs announcement for the county town in many years and was widely greeted with great enthusiasm. For the project to fall apart in such a short space of time is devastating not just for the workers employed there but for all those who had worked so hard to get the project to Navan in the first place. The prevailing emotion at the weekend and early this week was still one of shock at the scale of the job losses but cold, hard reality will hit this week as workers must weigh up their options and make decisions about whether or not to accept the redundancy package on offer. What will make many employees think about taking redundancy will surely have been the unexpected announcement, also last Friday, that Quinn Insurance is to be sold, making the future even more uncertain for those who remain. Already a number of major players in the insurance market are circling and expressing an interest in buying parts of the business, though they are reluctant to commit to saying anything more definitive than they have an interest in it until they see the extent of the financial black hole at the company. The job losses in Navan - and also those in Blanchardstown and Cavan where many Meath residents also work - will have a serious impact in the local economy and will be felt by other businesses which have had business relationships with the insurer. However, a bigger concern has emerged this week which surrounds the future of Quinn's new Navan office complex itself. Built to house 700 staff, it will have just 87 employees based there when the redundancy programme is completed. While the administrators have said they have no plans to close the Navan office, should the business be sold it is unlikely a buyer will keep all the different centres - spread over eight separate locations across Ireland, Northern Ireland, Manchester and London - open when subsuming them into one or two centralised operations would make more economic sense. In this type of scenario, Navan could be out on a limb. The cost of undoing the damage done to his business by Sean Quinn himself is now becoming more apparent to his employees. His recklessness with regard to corporate governance has been his Achilles heel. The new Financial Regulator, Matthew Elderfield, had seen enough and called time on it. He had no choice but to step in and act, regardless of the consequences. That, of course, is cold comfort to the staff at Quinn Insurance who are now facing difficult choices as they weigh up their options concerning their futures. Those who opt to take redundancy need help and assistance and that must be provided without delay by the State agencies and a jobs taskforce. The Government needs to take a particular interest in Navan given that this town has been hit disproportionatly in this round of job cuts and the fact that there are few enough other large employers around the place. Meath's jobless total has risen by over 200 per cent in the past two-and-half years, among the highest in the country. That alone should single out this area for specific focus from the Government when it comes to job creation and incentivising companies seeking to locate in this country to consider the advantages of setting up in Meath. Not that long ago, Quinn Insurance believed it was the perfect location for a springboard into Europe.