I have given permission to Deputy Harney to raise on the Adjournment the subject matter of the closure of the Clondalkin Paper Mills. The Deputy has 20 minutes.
Supplementary Estimates, 1981. - Adjournment Debate: Clondalkin Paper Mills.
I will share the time available to me with Deputy Walsh and Deputy O'Malley. I should like to thank you, A Cheann Comhairle, and your office for allowing me to raise this most important matter in Dáil Éireann this evening. I want to say how saddened I am, on this my first time to speak in this House since I had the honour of becoming a Member, that it has to be on the subject of the closure of Clondalkin Paper Mills. Any Deputy who has ever represented County Dublin will know the tremendous contribution these papermills have made to the lives not only of their employees but the people in the whole Clondalkin area and Dublin county in general.
I had hoped that when I chose to make my first speech in this House I could have started on a bright note. One hears enough from the prophets of gloom and doom in Dáil Éireann. Perhaps when the Minister for Energy has addressed himself to this subject, we may be able to give some hope to the 470 employees and their families who are about to lose their jobs in 26 days. I want to quote the words of the Taoiseach, Deputy FitzGerald, speaking in Cork during the general election campaign. He said it is hard to maintain dignity and self-respect let alone idealism in the face of unemployment Those are not my words. They are the words of the leader of the Government. I should like to ask him this evening to honour those words and to give some hope and some dignity to the people currently employed in Clondalkin Paper Mills.
I want to refer briefly to a statement made in this House during the week by the Minister of State at the Department of Finance, Deputy Desmond, when he attacked the management of Clondalkin Paper Mills for their deplorable behaviour in not letting anybody know of their proposed closure and appointment of a liquidator. This was a very cheap attack by the Minister of State on people who could not be here to defend themselves. The Minister knows, and everybody else knows, that if Clondalkin Paper Mills close it will not be the fault of the management. The fault lies fairly and squarely with the Government who are in power today. Deputy Desmond knows well that on 6 October this year the unions attached to Clondalkin Paper Mills wrote to the Minister for Energy and asked to meet him because they feared that closure was about to happen. The Minister replied that he would be away in America and could not see them for some time.
Clondalkin Paper Mills management applied to the Department of Finance for money from the Employment Guarantee Fund which would have helped to keep the mills open. On 7 October they received a letter from the Minister, Deputy Bruton, telling them that it would not be appropriate for the Minister to give them any money from this fund to save jobs. On several occasions the management told the IDA of their proposal to close unless they got a better deal, and unless they got some realistic offer which would allow them to continue and allow the lives and the jobs of the 470 people involved to be safeguarded. They got nothing they could accept, nothing which would allow them realistically to continue in production.
On the contrary, they have been pushed around from one Government agency to another. Today with only 26 days left, there is nothing which the management could accept which would allow them to keep their industry going. We all know that Clondalkin Paper Mills are the only fine paper mills left in Ireland. It is a strategic industry, and one which any country should be reluctant to let go. The Clondalkin Paper Mills have served this country well. During the last World War, when it was not possible for us to get paper from anywhere else, they manufactured paper from straw to keep us in Ireland supplied.
At all times they have been a kind and courteous firm to their employees, to the people involved and to the community of which they are a part. Those of us who have the honour to represent the Clondalkin area know that the Clondalkin Paper Mills lie at the very heart of Clondalkin itself. I hope the Minister as Leader of the Labour Party, a party who have waxed elequent in this House and outside it about their high regard for safeguarding employment, will honour those noble words for the 470 people in Clondalkin Paper Mills and their families. As a Minister he has an opportunity to prove to the people of Clondalkin that he really cares about employment.
I want to refer briefly to the package offered by the IDA and to the fact that the management were criticised for not accepting it. If this package is accepted, it will mean that in 1983, without any further trading losses, Clondalkin Paper Mills will be £550,000 worse off, and if they have to close at a future date they will be £2 million worse off. If they accept the package currently being offered, if they do not go out of business now, they will jeopardise seriously the employment of the other 1,250 people working in the subsidiaries of the Clondalkin group. I am not trying to make this a party political issue. As one who not only represents Clondalkin in Dáil Éireann but who also lives very close by, I know that many of my friends and neighbours have worked for many years in this fine industry. Many employees have worked there for over 15 years, and some have worked there for 42 years.
The Minister knows full well that, if this fine industry goes, the last of its kind left in Ireland, because of the specialised nature of their work and because of their age, these people will not find it possible to find alternative employment. I want to ask the Minister for Energy and his Government to honour the commitment given before the election to the many people who face unemployment. They now have an opportunity to give some hope, some commitment, to the people involved in Clondalkin.
I want the Government to involve themselves on a joint venture basis with the group involved in Clondalkin Paper Mills and to keep this industry going. In many other European countries the State is involved in this type of activity. When my party in Government faced a similar closure from Chipboard Ltd. in Scarriff they ploughed State aid into that firm and kept it going. I am delighted to know tonight that Scarriff Chipboard Ltd. is doing very well, thanks to the Fianna Fáil Government who kept it open with generous State aid.
The Government have an opportunity to do the same now in this instance, to involve the State in the paper industry and to ensure that our last fine paper industry is not lost. In terms of PAYE and PRSI contributions Clondalkin Paper Mills will contribute £2 million this year to the State but if these workers lose their jobs and have to claim unemployment benefit a further £2 million will have to be paid out by the State. At current prices this means that the State stands to lose a total of £4 million in any one year. In addition we would be worse off by £25 million in terms of our balance of payments. In these circumstances I plead with the Minister on behalf of the workers in Clondalkin to honour the commitment given to keep the industry going and to give these workers some hope for the future.
I, too, was saddened on hearing the news of the proposal to close Clondalkin Paper Mills. These mills have been in existence since the mid-eighteen hundreds. I understand that they were closed between 1922 and 1936 but they reopened in 1936 and, as Deputy Harney has stated, they played a major role by providing paper through the war years. Since then they have played a major role in the industrial sector. This industry is described by many as a national industry. It is the only fine paper mill remaining in the country but if it closes we will have no option but to import all our requirements of paper.
There is a very fine work force at these paper mills and they have enjoyed very good industrial relations. Some of them have 40 years' experience in the industry. If the mills close this very valuable experience will be lost.
In the redevelopment of Dublin the Clondalkin area was chosen to be a new town with a population of approximately 125,000. Naturally, at that time the paper mills were regarded as an industry that would play an important role in the development of Clondalkin and in the welfare of its residents but if the mills are closed the hopes of many young people in the area will be dashed. The jobs of the 470 employees concerned are in jeopardy.
It is not a question of the management of Clondalkin Paper Mills taking the easy way out and deciding to close when the situation is bad. For the past number of years they have injected a considerable amount of capital into the improvement of the works and it was hoped that the trading position would improve. Unfortunately, that hope has not been fulfilled. From time to time, regardless of who is in government, we hear announcements from Ministers of industries being set up that are to provide employment for 50, 100 or perhaps 200 people. Such announcements are always welcome but we must do everything possible also to maintain the industries we have and the one in question has proved its worth down through the years. I appeal to the Minister to do everything in his power to help to avoid a closure of these mills. The time has come for the government to play their part in helping to keep the industry going. We have but one steel mill remaining and there is only one cement company though they have two factories. We must not let our last fine paper mill go easily. I hope to hear from the Government within the coming weeks that these mills at Clondalkin will be enabled to continue to operate and that the employment of the workers there will be secure.
I take this opportunity of congratulating Deputy Harney on her very fine maiden speech this evening. There is not much reason for me to add my voice to what both she and Deputy Walsh have said. They have put the case in a cogent and compelling fashion. However, I should like briefly to reiterate some of the points they have made. The first aspect of this matter that I regret is the reply that was given here some days ago by the Minister of State at the Department of Finance when he deplored what he called the failure of the company to keep the IDA and other State agencies informed of developments. I was aware a year or more ago that this company had problems and that they were constantly in touch with the agencies concerned. I am informed that on 6 October, more than five weeks ago, they informed the IDA of what seemed to them the imminent necessity of appointing a liquidator. Therefore, the statement made by the Minister of State and the attack on those concerned was neither true, justified nor fair and it is regrettable that such an attitude should have been adopted.
As the other speakers have said, this is not a situation in which the management concerned can be held to blame. I have had experience of many cases where that was the situation but this is not one of them. Indeed, the management in this case might be held to have been irresponsible if they had failed to take the action they took. I say this because they have a group of companies under their control which are otherwise healthy but which are put in some jeopardy perhaps by the continued losses of the company in question. The number of employees in the other companies in the group considerably exceed 1,000. It would be irresponsible to put their jobs in jeopardy.
The Minister must realise that in a small country like ours, an island country, there are a number of industries which are strategic. If we were to find ourselves in some kind of war or embargo situation we would be very vulnerable if we did not have the production of some basic strategic materials and surely paper is one of those. I could envisage the commercial and industrial life of the country coming to a halt if we were faced with the situation in which, apart from the heavy brown or packaging paper which is manufactured at another mill, we had no source of paper of our own. During the past numbers of years we have had a long succession of unhappy events and closures in the paper, pulp and packaging industries generally. We had the closure of the Munster Chipboard Factory at Waterford as well as the closure of the other factory there. There was the closure also of the Athy mill and of another mill. A year or more ago I was faced with the fact that we were about to lose our last chipboard plant but I decided that since chipboard was a strategic material we would have to continue to manufacture it. Consequently, we devised a rescue package and I am glad to say that from all accounts this has worked very satisfactorily. From a national point of view the Clondalkin Paper Mills, strategically, are no less important than that other plant. Therefore, the same duty devolves on the Government at this time to act in the same way now as I acted in regard to the chipboard plant at Scarriff.
It is to be regretted that this matter was introduced to the Dáil at this stage because negotiations are still going on in an effort to preserve the production of paper at Clondalkin Paper Mills. I have asked the Minister to meet the interested parties and this has been arranged for tomorrow in the hope that a successful outcome can be achieved. It would have been better if this matter had been deferred until after that meeting. I believe it will be possible to continue paper production at Clondalkin. The factory is well capable of operating as a viable unit if it could do so on level pegging with its competitors in Europe and North America who receive heavy Government subsidies. If similar subsidies were available here I have no doubt that it would be a viable project. I sincerely hope that these subsidies will be forthcoming. I am confident that the Minister will do everything in his power to maintain the 470 jobs of those involved in paper production at Clondalkin. They are skilled people and this country needs their expertise.
The Minister to conclude.
It is extraordinary that the Chair called three speakers from the other side of the House.
The Minister might allow the Deputy a few minutes.
I do not wish to take the Minister's time but it is extraordinary that three Opposition speakers were called.
That is our right. We raised the matter.
I will clarify this matter for the Deputy. The Opposition have 20 minutes. Deputy Mervyn Taylor asked me in advance if any time was available and I tried to facilitate him. Certainly there is no attempt by me to deprive the Deputy and if the Minister would give a few minutes of his time we should be glad to hear the Deputy speak.
I sincerely hope that some formula will be found whereby work can continue at Clondalkin. Many of us find it hard to visualise Clondalkin without its paper mills. I lived a considerable distance from Clondalkin but I remember some of my neighbours working there when I was a schoolboy. Clondalkin is a fast developing area which cannot afford any extension of unemployment. I am disappointed that this problem is being kicked around like a political football and I regret some of the remarks made by my colleague, Deputy Harney. I have not the opportunity to reply to them now but I will do so at a later date. The first indication I had as a public representative from the area that Clondalkin Paper Mills were closing was when I read it in the newspapers and heard about it on the radio. The only communication I have had from them is the press release which I am sure every Member received two days ago.
I am well aware of the problem this closure would cause in Clondalkin. I am also aware of the unemployment problem in the area and quite recently I was able to make a positive announcement concerning a new project there. The former Minister for Industry, Commerce and Tourism is quite correct in saying that the problems of Clondalkin Paper Mills have been with us for some time. They go back to 1980 and the closure of the wood pulp section.
I should like to disabuse anyone of the idea that the State has stood idly by in this matter. The IDA have been involved in an effort to put together some kind of package which would maintain the viability of the firm, but the dissatisfaction of the management with those talks led to the decision to bring in the liquidator. This was somewhat surprising because only last Friday discussions took place in my Department and the liquidator was brought in on the following Monday. I would be the first to concede the fact that difficulties in the firm have been foreseeable for some time but the IDA and the rescue agency produced what we considered to be a realistic package to rescue the undertaking. The package put forward by the IDA has not, however, found favour with management and this is to be regretted.
I do not wish to deal in detail with figures because Deputies will appreciate that there is still a possibility of continued operations. The moneys which the IDA were willing to give to the firm were contingent on management bringing in certain structural changes to ensure a better future for the firm. The management were not ready to make a matching investment. My opinion is that the IDA were correct in their attitude because it would appear from management's approach that the funds which were to be made available by the IDA would be used in the main to reduce bank loans.
The management were asked to invest £2 million in respect of which they would have received a grant of £800.000 when they ordered and paid for machinery which would take 12 months to deliver. How would that reduce bank borrowings? It would extend their borrowings.
We had a consultant's report which recommended a certain course and the IDA were prepared to play their part. Management were not. I do not want simply to hurl brickbats at management because they have their own problems and this firm has been ailing for some time. I believe, however, that if they were to adopt a more realistic approach the firm could be brought around a very difficult corner. The IDA stand ready to assist.
There is no point in making general speeches about the unemployment situation. We are faced with the problem of a firm who are experiencing difficulties. The IDA met them half way in coping with those difficulties but management did not conclude that the arrangements were satisfactory. I understand that the company go to Fóir Teoranta tomorrow morning for further discussions and tomorrow afternoon I am to meet the trade union representatives once more. I would hope that good sense would prevail so that the operation could be maintained.
I believe we must pay serious attention to the report of the consultants which gives a blueprint for the survival of the firm. If management could see their way to co-operating in regard to the recommendations of this report the IDA would stand behind the bargain already given. This would give the firm a renewed life. Management must come half way to meet the IDA in their efforts to keep the firm viable. The consultants have made a complete examination of the financial and operational affairs of the mills and they have concluded that with restructuring and necessary capital investment from the management the company could once more become viable.
The IDA offered a package of financing which would permit the survival of the firm. This would call for certain capital expenditure by the group. I accept that they must consider the interests of all employees attached to the group but I believe that if management looked at this matter correctly they would appreciate that the prosperity of the entire group has in the past been massively contributed to by the Clondalkin firm. I believe it would be shortsighted of them to opt out and turn down the offers of financial assistance which have been made. Closure is to occur reasonably soon and time is running out but there could still be a survival plan if all concerned would reconsider their position. The company have been unrealistic in their approach to the financial aids offered by the IDA.
Would the Minister care to explain how the company are supposed to reduce their borrowings if they are asked to expend £2 million? Will the Minister answer a straight question?
The former Minister for Industry as gamekeeper turned poacher is a sorry spectacle. I am defending the realistic package devised by the IDA and I regret that management were not able to meet those terms.
£2 million.
The company should take into account the firm's contribution to the overall viability of the group. I have seen press reports that management were looking for amounts as high as £10 million. I am not aware whether these reports have been adequately denied but the impression is that management were not willing to put their back behind the wheel constructed by the IDA for the rescue of this firm. I would ask Deputies on all sides to believe that every realistic effort is being made and has been made to arrange for the survival of the firm.
Would the Minister consider discussing with the IDA the possibility of making arrangements, as an interim measure, to keep the firm going for, say, a period of one year as was done in the case of the Tuam sugar factory, in the hope that in the meantime the National Development Corporation will be in existence and will have a part to play?
I will rely on all the specialised advice given by the agencies concerned.
The Dáil adjourned at 5.35 p.m. until 2.30 p.m. on Tuesday, 17 November 1981.