Celtic Tiger stalking Mass.
Common language, cultural ties create favorable business conditions
When Massachusetts high-tech and life sciences companies look for places to expand, they have long turned to Ireland, taking advantage of that country's educated workforce, low corporate taxes, and position as a gateway to Europe. EMC Corp., Boston Scientific Corp., Genzyme Corp., and Analog Devices Inc. collectively employ thousands of workers in the Emerald Isle.
Now some Irish companies are expanding in Massachusetts, taking advantage of the weak dollar. For instance, Creganna Medical Devices Ltd. of Dublin is expanding its manufacturing operations in Marlborough. Proxy Biomedical Ltd. of Galway is considering adding a United States headquarters in Massachusetts.
"We're seeing a lot more activity with Irish companies coming into the United States and expanding very quickly," said Patrick Bench of the Massachusetts Office of International Trade and Investment. "There are a number of Irish and Northern Ireland companies that are speaking to the state about expanding or putting their US headquarters here."
Irish companies already employ about 7,500 workers in Massachusetts, an increase of about 2,000 from a year ago, according to Sean McEllin, a vice president with Enterprise Ireland, a group that helps Irish companies expand in the United States. Last year, only Florida had more workers employed by Irish firms.
"You can't underestimate the historic ties between Massachusetts and Ireland," McEllin said. Nearly one-fourth of Massachusetts residents, including many of its political leaders, claim Irish ancestry.
Lieutenant Governor Timothy P. Murray is planning to lead a trade mission to Ireland and Northern Ireland to help lure high-tech, life sciences, and financial companies to Massachusetts. But the trip, originally scheduled for this month, has been put on hold because of the economic crisis.
"With the Celtic Tiger (the decade-long surge in the Irish economy), there has been a lot of new wealth created in Ireland," Murray said. "We want Irish companies to make Massachusetts the beachhead for the US market."
Murray said there are many reasons why Massachusetts is a natural partner for Irish companies, including the common language, relative proximity, cultural ties, and similar strengths in high-tech, life sciences, and education.
Meanwhile, Irish companies such as Creganna are already sold on the idea of moving across the Atlantic. While Irish companies historically found it cheaper to manufacture at home, a Creganna executive said that's changed because of the strong Euro and rising salaries in Ireland, along with the cost and hassle of shipping products overseas.
Manufacturing in Ireland may no longer be less expensive than in the United States, said Randall Sword, Creganna's commercial director, in explaining its Marlborough expansion. The company, which makes medical devices and specialty needles for minimally invasive procedures, also wanted to be closer to key US customers, he said.
Creganna currently has about 30 workers in Massachusetts, but Sword said that could reach 200 or so in the next few years.
Meanwhile, Proxy Biomedical is considering expanding in Massachusetts as well. Peter Gingras, a former Groton resident who started the company in Ireland five years ago, said it's clear Proxy needs a US presence because it's the world's biggest market for medical devices and home to several key customers, including medical-device maker Boston Scientific, based in Natick. Gingras, Proxy's managing director, said he plans to make a decision of where to expand by year-end.
In addition, a number of Irish companies have acquired US firms in the past few years, giving them a foothold in the market. For example, Riverdeep Holdings PLC of Dublin bought Houghton-Mifflin, which has 1,000 Massachusetts workers, two years ago. And in April, Greencore Group PLC of Dublin bought Newburyport's Home Made Brand Foods Inc. for $44 million, allowing Greencore to enter the US market for chilled convenience food.
Still, Ireland has also been slammed by the global financial slowdown this year, making the Celtic Tiger look more like a kitten, which could curb the expansion of many Irish companies into the United States. And at the same time, many Massachusetts companies continue to expand in Ireland.
EMC, the giant Hopkinton high-tech company, just unveiled a $29 million expansion of its facilities in Cork, Ireland, where it employs 1,600 workers.
Mike Kerouac, senior vice president of global manufacturing for EMC, acknowledged salaries have risen sharply since the company first launched operations in Ireland 20 years ago, muting some of the attraction of operating there. But Kerouac said it still makes sense to use Ireland as a base to serve its European market because of lower shipping costs. Also, he said, the company has developed a skilled, valuable workforce that would be hard to replace.
Elsewhere, Genzyme said in April it would build a $200 million expansion of its manufacturing plant in Waterford, Ireland. The Cambridge biotech now has 450 employees at the site, and plans to add 170 more. And Analog Devices, which has operated in Ireland for 30 years, and has roughly 1,300 employees there, most at its chip fabrication plant in Limerick. But the Norwood-based computer chip maker said it plans to eliminate 150 jobs by year-end as part of plans to consolidate manufacturing, even as it continues to hire in other areas.
Boston Scientific is likely the largest Massachusetts company in Ireland with 5,000 employees, mostly at its Galway manufacturing and research center. Though the company recently divested a small business with some Irish operations, Boston Scientific also said last month it will invest more than $70 million in research in Galway. Despite rising wages in Ireland, company spokesman Paul Donovan said the Irish operations remain an "integral" part of company strategy.
Todd Wallack can be reached at twallack@globe.com. 