asked the Minister for Industry and Energy if, in view of the decision now announced regarding the closure of Telectron, if he will make a statement of the Government's intentions regarding the continued operation of this plant and the protection of the 500 jobs.
Private Notice Question. - Closure of Tallaght (Dublin) Factory.
I would refer the Deputy to my statement earlier today conveying details of AT & T's regrettable confirmation of its decision to cease manufacturing at Telectron's Tallaght factory as from tomorrow. The statement pointed out that 60 management staff would remain at Tallaght. I have asked the IDA to work closely with the staff being made redundant who may have ideas for new industries using their expertise. The IDA will also be making a special effort to find new industries for the Tallaght area. I would point out that the Tallaght factory is owned by Telectron and, pending clarification of AT & T's decision, I cannot yet give any further information as to their intentions for it.
Can the Minister say why he did not go to meet the parent company in America rather than send a junior who could be regarded as a second-rater and not fit to take his place on the senior team on an important issue like this? Are the Government prepared to apply the solution they had in the case of Fieldcrest Kilkenny when they were in Opposition to save this plant?
I have been keeping in very close touch with the Minister of State, Deputy Collins, and the Managing Director of the IDA who are in the United States. Last week I met Mr. Pitts, who is Vice-President of the operations of AT & T and Mr. Robert Egan, who is the managing director of Telectron. As the House will appreciate, there are many industrial problems facing the country at present and it is important that I should be here in the country to deal with those problems at this end, so to speak.
However, in view of the very serious importance of this closure, which I very deeply regret and about which I have expressed deep disappointment in my statement, I felt that the Minister of State, Deputy Collins, who has wide experience in the industrial area, should accompany the managing director of the IDA in his lengthy discussions yesterday with AT & T to underline what I personally had already underlined to Mr. Pitts when I met him, that is, the high political importance the Government place on this entire issue, both from the point of view of the employment situation in Tallaght, which it is recognised is quite serious, and also the general way in which this matter was approached by the company which left a lot to be desired. I underlined those points as seriously as possible both through the Minister's presence at the talks and in my own direct contacts with the company.
As to the future in Tallaght, I have already indicated in my statement that I asked the Industrial Development Authority to give very special attention to the problems involved in the Tallaght area as a result of this decision. As I am aware of the fact that many of the staff in Telectron have a high level of technical competence, and are likely to have ideas — some of them have already been in informal contact with me personally — I asked them to work with the staff now very regrettably becoming redundant to see what ideas there are of a technical and saleable nature which could be used as a basis for a new enterprise in the Tallaght area which would at least help to alleviate in some small way the very serious blow which this undoubtedly is for that part of County Dublin.
I have two questions. In view of the recognised importance of the electronics industry and the expertise and competence of the staff which the Minister has recognised, and in particular the expertise of the excellent design and research team which existed there, has the Minister examined the possibility of a semi-state body in that field, either Bord Telecom, or the ESB, or some such body in the electronics field, taking over the staff and establishing a factory in place of the one which has collapsed? Will the Minister institute a public inquiry into the circumstances leading up to the take-over by AT & T, the circumstances which led to this, the manner in which the company had been managed beforehand, the introduction of the French company CIT Alcatel and their sudden withdrawal from it, if he thinks a public inquiry would be in order?
As the Deputy has said, I have recognised the undoubted competence of many of the people involved individually in this firm. I am sure the Deputy will realise that there are serious restraints on the State becoming directly involved in manufacturing operations of this kind. The House is aware of the fact that I told Deputy Mac Giolla that this operation lost £10 million in the past three years. Obviously those losses have to be financed from somewhere. Up to now they have been financed from within the resources of the company. In any State takeover, if that were to be considered, unless the losses by some unusual event were to dissapear they would fall to be borne by the taxpayer. Obviously that cannot be contemplated at this time.
A number of serious problems in the marketing field have been identified by Telectron with their existing range of products. They have not been able to sell what they are producing and that deficiency would need to be overcome in any revived operation. In the discussions the IDA will be having with the staff concerned or with any other interests who may consider becoming involved in a revival of the operation at Tallaght, one would have to give primary attention to the need to ensure that one has products there that can be sold. A manufacturing operation is of no value unless it is capable of selling its products in what is a very competitive and, I regret to say, world market, where national purchasing policies by national telecommunications services, where they insist on purchasing to a great extent goods produced within their own territory, has the effect of putting at a disadvantage concerns located in Ireland where, because of our relatively small population, the market within the national service is somewhat restricted.
As to the holding of a public inquiry, I do not feel that the facts are such at the moment as to justify that. The takeover itself from the point of view of the Irish authorities who approved it was eminently justifiable in the circumstances. Prior to the takeover the firm was losing money and the takeover at the time by AT & T offered at least the prospect of another firm coming in with substantially greater resources than were available to Telectron, that would have the hope through investment of redressing that situation. The decision to allow a merger, in January 1982 was a justifiable one and I do not see any justification for a public inquiry into that decision.
The Minister will be aware that the aspect of the matter which is troubling most people is that the firm, AT & T, which had been a minority shareholder in Telectron up to a certain point proceeded to acquire the project in full. Has the Minister any information as to why a firm like AT & T would take over completely a firm like Telectron and shortly afterwards close it down? Is he aware that this is something that is causing a great deal of disquiet and unease, the fact that only a short time after acquiring the full shareholding of Telectron, AT & T should proceed to close down the firm. Can he throw any light on that mystery? Further, can he give us some information about the orders this firm had from the Department of Posts and Telegraphs and any other State agency? What is the position with regard to those orders? Will they be fulfilled or transferred to someone else?
Finally, the Minister mentioned now that the question of AT & T acquiring full ownership of Telectron came before the mergers board here. Can he give some further information on that? What were the considerations that permitted that full acquisition? Were the Government at the time involved in that aspect?
I will deal first with the Deputy's first and third questions. In September 1981 the then Minister for Trade, Commerce and Tourism was notified of a proposal by the American Telephone and Telegraph Corporation to take over Telectron, of which Dr. Glaser was then the managing director. While it was known that talks were taking place between the two companies on the possible transfer of Telectron to Digital Microwave Technology, this proposed takeover was an unexpected development at that time. It emerged at that time that Telectron had been incurring serious losses, had fallen behind in the transmission area and were incapable of catching up through their own resources. The products they were producing were relatively obsolete. In short, Telectron were doomed to closure prior to the takeover, if that takeover had not been allowed to proceed.
In the light of the foregoing and having analysed thoroughly the situation, the Department of Industry and Energy advised the Department of Trade, Commerce and Tourism that the takeover might be allowed to proceed but with certain conditions if they could be obtained. These related to getting commitments from AT & T on maintaining and developing the operation on the lines set out by Telectron but in relation to which Telectron's ability to deliver was in doubt because of the evident losses they had been making. AT & T would only give aspirations of hope to achieve the programmes set out by Telectron, and it was felt at the time that this was the best that could be achieved in the circumstances. Given that the company were loss-making at the time of being taken over, the Minister approved the take-over. That, basically is the background to the take-over.
As to the question of the State orders, I am sure that the Deputy will appreciate that the orders are primarily a matter for the Minister for Posts and Telegraphs. However, orders were placed with Telectron. It is understood that Telectron still have to deliver orders to the value of £5 million under an agreed contract which they have with the Department of Posts and Telegraphs. It is further understood that, in addition to this, the company, in August of 1982, secured a £16 million contract from the Department of Posts and Telegraphs for the provision of a digital microwave network, £5 million of which relates to equipment and the rest to buildings, towers and so forth. This however, is a once-off contract and would not provide a continuing source of employment in Telectron.
There have been questions in the Dáil since and I have indicated, on the authority of the Minister for Posts and Telegraphs, that it is the intention of that Minister that the work in question be carried out here in Ireland, either by Telectron or by some other company. There is no question of this work being carried out other than in Ireland as a result of this closure.
That is not the point made by me. The Minister did not answer one of my questions and the Minister answered a second type of question in the second instance. I am concerned to know whether AT & T, as such, will have some contractual liability to the Department here as a result of these orders not now being fulfilled and whether that aspect will be followed up. I also asked the Minister whether he could throw any light on the fact that AT & T moved to acquire full ownership of this firm shortly before closing it down? Is the Minister aware that that raises a deep suspicion in a lot of people's minds? Can he tell us anything about that aspect?
The purchase by AT & T of 45 per cent of Telectron share capital on 16 January 1982 already gave them effective control of the company at that time. The balance of the shareholdings which did not actually add to their effective control was acquired by AT & T on 1 March 1983. While I do not think that that is of some significance, it is important to realise that they already had effective control prior to 1 March. I could not at this point be in a position to draw any conclusions as to whether there is any coincidence between the two events.
There is an obvious conclusion.
I would wish, naturally, to consider the matter further and will do so. The other question raised by Deputy Haughey relates to the contractual liability which Telectron, or indirectly AT & T., may have to the Department of Posts and Telegraphs. That is something on which I am not in a position to give information at this point. However, I will make inquiries from the Minister for Posts and Telegraphs, who is the Minister primarily responsible for this aspect of the case.
Give him a ring.
I will communicate with the Deputy.
A final supplementary, please, from Deputy S. Walsh.
I want to ask a supplementary question. I do not see why I should be excluded from asking one.
I am calling on Deputy Walsh.
What is the hurry?
I do not see why I should be excluded from asking a supplementary question.
It is an extremely important matter.
Five hundred jobs.
The Minister in the House on Tuesday evening stated that production to complete this order would be carried out in this country. To a certain extent, he has confirmed that here again today. However, it is freely spoken of by the workers that production to complete the order has already been carried out in another country, in one of this company's firms or factories. Can the Minister assure the House that it is the position that it will not happen that this order be supplied from another country? During the discussions in connection with redundancy and when the announcement was made that the factory would close in Tallaght last Friday—it was then deferred to this Friday—the workers were informed that they would receive three weeks payment. Can the Minister throw any light on whether that is still the position?
I will allow Deputy Wilson to ask one supplementary question when the Minister has finished his reply and that is the final one.
And then a final one from me.
No, I am sorry——
There is no point in running away from the matter.
I must put on record that Deputy Collins is continually insulting the Chair. I do not mean me.
No, he is not.
I would ask the Ceann Comhairle to withdraw that remark. It is unfair and untrue and shows a total lack of tolerance on the part of the Chair.
The Chair is being extremely sensitive.
A Deputy
Good old Albert. Albert is here.
Why does the Deputy not ask me a question and I will answer it?
I have no information which would suggest that what Deputy Walsh said is correct with regard to the work having been carried out in fulfilment of this contract outside this country. Indeed, I have already given an assurance to the House, conveyed to me by the Minister for Posts and Telegraphs, that the work involved will be carried out here in this country. I have no reason or information to justify me in departing from that assurance.
Deputy Wilson, please.
The Minister did not answer my second question.
We have been 20 minutes on this. The Chair has been very reasonable. The Deputy will have to find another occasion, I am sorry.
I will answer the second part of the question.
There you are, now.
Give out to him for answering it.
A Deputy
It is very unbecoming of Deputy Collins.
The position is that that is a matter for settlement——
The Chair is totally intolerant of anything happening from this side of the House.
——between the parties concerned, namely, the firm and the workers. I understand, in fact, that three weeks' payment will be given in lieu of notice.
Reference was made to my name and my involvement. I would ask the Chair to give me an opportunity of answering.
The Chair is getting no co-operation. I am moving now to the next item on the Order Paper.
Deputies
On a point of order——
(Interruptions.)
I am appealing to the Deputies. I have been nearly half an hour on this question.
(Interruptions.)
My name was mentioned in the House and I should be allowed to reply.
I was given permission to ask a supplementary question.
I announced that I was allowing Deputy Wilson a final supplementary question and I did so.
I would like to ask a supplementary question.
I did allow Deputy Wilson to ask a question, as I said I would. There are Deputies coming into the House one after another who have not been here previously and who are asking questions.
Deputy Wilson is in order.
I did call on Deputy Wilson and he did ask the question.
I want to ask that question.
Deputy Wilson did not ask a question. The Chair is confused.
I have given Deputy Wilson a full opportunity of asking his question.
As the standing of——
Be fair, my name was mentioned across the House after Deputy Wilson.
I am giving Deputy Wilson a final opportunity of asking a question.
(Interruptions.)
No, there are no further questions.
My name was mentioned across the House.
This is intolerable. No, there is no further question — I do not want to mislead the House — there is no further question being allowed on this side after Deputy Wilson.
Since the standing of the AT & T in our community is in question, could the Minister tell the House if any Ministers from the previous Coalition Government had any discussions or if there was any passing of information to the AT & T with regard to European security?
I have no information to suggest that that is the case. I take it that the Deputy, in referring to the previous Coalition, is referring to the Government that held office between July——
Between 1973 and 1977.
I have no information in relation to that point. If the Deputy wishes to substantiate the rather unusual inference he is making, I will of course endeavour to find whatever information is available for him.
(Interruptions.)
A Cheann Comhairle——
I am sorry, I am not allowing any further questions.
I can be of help on this question——
Look, I am not allowing——
(Interruptions.)
In view of the unsatisfactory approach of the Minister to this important subject, may I ask your permission, Sir, to raise the matter on the Adjournment?
I shall communicate with the Deputy. Item No. 7.
My name was raised on the floor of the House——
Deputy Reynolds is being disorderly and he knows it. No, I cannot allow any further questions.
The Minister has made no reference whatever to the involvement of AT & T with Philips——