The cows grazing in the brilliant green valleys of this part of County Tipperary have a new neighbor: An ultra-modern, computer-controlled Merck plant that cooks, refines and grinds chemicals for drugs.
The factory, an incongruous array of gray sheds, smoke stacks, boilers and pipes, has been in business for 20 months now. Joe Donahue, the shirt-sleeved general manager, says the huge Rahway, N.J. parent company is getting its money's worth from the $60 million investment.
Donahue, 37, a Villanova-trained chemical engineer from Philadelphia is one of two Americans at the plant. The rest of the 200 men and women --managers, chemists, secretaries and operatives -- are all Irish.
Merck didn't come to this remote place because the snow-capped hills and the River Suir are so scenic --although they are. Like more than 100 other American firms that have set up in Ireland. Merck was drawn by a staggering bag of lures offered by the Irish government to make jobs and save this small country from disintegrating.
In his paneled office, Donahue ticked off the reasons for Merck's move. The company needed a factory to feed its European plants with the synthesized chemicals that are converted into pills and syrups on the continent. To get under the Common Market's tariff wall, Merck decided to set up inside the EEC, and Belgium, Britain and Ireland appeared the best bets.
Merck preferred English-speaking workers because they are easier to train and supervise for Americans who are not noted for languages. Ireland beat britain largely because of the huge cash giveaways Dublin offers to draw new industry.
A new firm gets up to half its investment as an outright gift from the government. Merck in fact got about 16 per cent, $10 million. More cash is given for training local workers, and Donahue's firm collected 25 per cent of this cost.
Most important of all, Merck will enjoy a tax-free ride on its profits until 1990, a magnet so strong that neither the company nor the government will estimate how much this is worth. Any other firm coming here will get the same tax holiday on all its export profits.
Since almost nobody sets up here to serve the small, domestic Irish market, just about everybody -- General Motors, General Electric, General Foods, IBM, Exxon, Pfizer, Burlington Industries and more -- multiplies their profits with the zero tax.
The Merck plant is part of a foreign investment parade that has created more than $1 billion in factories since 1960. Leaders of all major political parties agree Ireland had no choice, that to do nothing would have literally destroyed Irish society.
The country had been losing its best and brightest young people because there were no jobs at home. Population was falling steadily. But in the last five years, the curve has reversed course. Irish men and women are coming back, especially from Britain, and population is rising, a phenomenon unique in Europe.
Unemployment is still fearfully high, officially at 10 per cent but really much higher when account is taken of people working at unproductive tasks. The investment program is moving so fast, however, that Michael Killeen, managing director of the Irish Development Authority, predicts that a full employment level of 4 per cent will be reached in a decade.
Killeen's agency is a shrewd, tough, hard-sell outfit that reminds an American of the aggressive development authorities which snared industry from northern states to the south a generation ago. So far, Killeen and his people figure they have brought in 80,000 jobs, including 33,000 at American-owned plants.
The recent growth has been explosive and an estimated 23,000 jobs were opened up last year alone. By the end of the year, Killeen's agency was celebrating a $500 million project by Royal Dutch Shell and Alcan of Canada to make aluminum near Shannon.
The United States is by far the biggest new investor, accounting for almost half the foreign plants and one-quarter of all new industrial investment in Ireland. At the end of 1976, the U.S. stake was worth more than $500 million and rising.
At Baddydine, Donahue of Merck is far too close-mouthed to disclose the return his company is getting. But the Irish Development Authority cites U.S. Commerce Department figures that show American firms netted a handsome 29.5 per cent on their investment here in 1975 and 1976. Although West Germany and Denmark both topped 20 per cent, the average in the Common Market was 12, less than half the Irish rate.
No new plant ever runs smoothly and Merck's is no exception. In the first year, Donahue calculates the operation worked at only half the company's target rate for productivity. In this second year, it is up to 80 per cent and the target will probably not be reached until next year or the year after.
Ireland, after all, is a heavily agricultural island off the shores of still another island offshore to Europe. This means parts and components are not found easily. It means delays in raw materials coming in and semi-finished products going out. But Ireland's low wages (less than half West Germany's, although West German workers make up for much of this with greater productivity) and the long tax holiday can throw off substantial profits.
Some Irish environmentalists and leftists object to the program, but their voices have been all but drowned out by the business-union-politician consensus in favor. Killeen asserts that the government imposes very strict pollution controls and the Merck plant bears him out.
It uses water from the Suir and puts treated water back in.Donahue says that the Irish anti-pollution standards are 20 to 30 per cent stricter than in the United States.
He figures that his $10 million treatment plant reduces the oxygen demand of the chemicals he throws back into the Suir by 98 to 99 per cent. In America, an 85 per cent reduction would be enough.
Leftists complain that Ireland's economic destiny will now be settled in Detroit, Tokyo, London and New York because impersonal corporations will control key decisions about investment employment and pricing. But Ireland depends on exports for 45 per cent of its gross national product so its destiny has traditionally depended on the world. In any event, as Killeen observes, no rational company abandons a profitable plant; if Rahway has some leverage in Tipperry, Tipperary has some in Rahway too.
Outsiders worry that the leisurely, relaxed style of the Irish will be undermined by industry. But it is hard to convince well-paid workers, technicians and executives in the new plants that this is a loss worth worrying about.
The chief shop steward or key union official at Merck is John Ryan, a quick-witted 42-year-old operator in the freezing unit. He calculates his 100 members are averaging, with overtime and shift premiums, $200 a week, well above the Irish level and a sum that goes a long way in nearly Clonmel or Carrick-on-Suir.
Ryan sees himself as a vigorous negotiator, but volunteers that he is delighted with the working atmosphere at Merck.
"The one thing that strikes you is that we're all on first names. There's no misters and the doors (of management) are always open."
Irish bosses, however, are like the British, far more formal and far less accessible.
Ryan isn't always happy with time it takes to get a decision from a multinational. Disputes that are settled on the spot in a locally owned plant can wait a week for word from Rahway. But on the whole, he regards Merck well and is pleased he has negotiated a contract among the top 10 in Irish industry.
Even the Church is promoting development here. The continuous process plant operates around the clock, seven days a week with 12 hour shifts. This means some workers living in Carrick-on-Suir miss Sunday mass, and they feared they might commit a mortal sin.