Dáil Éireann debate -
Wednesday, 5 Dec 1984

Vol. 354 No. 8

Adjournment Debate. - Dundalk Unemployment.

Mr. Kirk

I will be giving some of my time to Deputy McGahon and I believe the Minister will oblige by giving Deputy McGahon some of his time. Due to the seriousness of the problems in Dundalk Deputy McGahon wishes to support me in urging the Minister to take urgently needed measures to come to terms with the problems. It is with great sadness that I have put down this motion at this hour of the night but the seriousness of the problem is so great that I was forced to do so.

Dundalk as the largest provincial town in Ireland was a prosperous and bustling town. Plentiful employment was available to the skilled workforce of Dundalk and its environs. Dundalk as an industrial centre was the mecca for people from miles around seeking employment. Unfortunately employment opportunities have been drastically reduced. Closures, redundancies and so on have become the order of the day. At one time ECCO, the electronics firm, employed 1,800 people. That figure has now been cut to 400. The impact of the reduction is horrific. A spectre of lifetime unemployment confronts many people who have lost their jobs. Today there is a huge problem where people who had steady employment now find themselves unemployed and unable to meet mortgage commitments and so on. The ECCO electronics firm gave great employment in the town and employed people from a great catchment area surrounding the town. The shattering news that 260 employees would be let go between now and next March was a body blow to the industrial base of the town.

In the past 15 months the two principal footwear manufacturers in the town have either closed or let many of their workforce go. Because of the long tradition of footwear manufacture in the town the skills needed for the footwear industry are readily available to any industrialist who wishes to set up business in Dundalk. Because of the difficulties that exist at this time in many ways because of the approach of the Government to unemployment and to the maintenance of industrial bases in towns such as Dundalk which have been the backbone of our industrial set up here these industries are not getting the support necessary to see them through. The skills that have developed over the years will be lost because people will have to move to other areas to find employment and might even have to emigrate. It is criminal to allow those industries to fade out, so that the incentive for new manufacturers to set up in Dundalk will disappear. There are other places like CRB where there has been a gradual reduction in the numbers employed. That is the scenario that stares the town of Dundalk in the face.

There has been a tremendous growth in the population of the town and in the catchment area. We have been fortunate that the educational institutions and other facilities in Dundalk have attracted families to come to work and live there. They have become totally disillusioned. There is now the spectre of many well educated girls and boys in whose education there has been a huge investment by parents and the State and who cannot now find any employment outlets. It paints a very bleak picture. The commercial and trading activity of the area has declined very sharply in recent years. It could be said that it is at present slumbering from the ether of the financial rectitude being pursued by the present Government. Industrial development is at a standstill. There is industrial stagnation. In the fine industrial estate at Coe's Road there are now many vacant premises which had been provided by the IDA and other agencies involved in industrial promotion, which buildings had been constructed for the forward planning programme.

An Ceann Comhairle

The Deputy should confine his remarks to footwear and electronics.

Mr. Kirk

While the motion deals particularly with unemployment and the deteriorating employment situation in Dundalk relative to footwear and electronics, perhaps I might divert somewhat in order to deal with the problems confronting families involved in these industries and their children seeking employment, all of which is relevant to the problem obtaining there.

An Ceann Comhairle

I should draw the Deputy's attention to the fact that, as he knows, he endeavoured to raise the whole question of unemployment in Dundalk. It was ruled out of order on the basis that it was not suitable for a debate such as this. If the Deputy were to move now and deal——

Mr. Kirk

Bearing in mind that Deputy McGahon wants to speak I might make some suggestions to the Minister of alternative measures needed to be taken in order to provide other outlets of employment in the town.

An Ceann Comhairle

That would be in order.

Mr. Kirk

I am calling on the Minister of State present to declare Dundalk a disadvantaged area for industrial promotion purposes. The progressive decline in employment in the town inevitably imposes on the Minister responsibility to recognise the seriousness of the situation, taking the urgent measures necessary to get it back on to an even keel on the road to prosperity once more.

It had been hoped that the natural gas pipeline would pass through Dundalk which, in its own way, would constitute an added dimension to the agencies involved in industrial promotion there. Unfortunately, because of the breakdown of that agreement with regard to its extension to Belfast, the Government are reluctant to recognise the necessity for its extension even to Dundalk, thereby giving the IDA and other agencies an added dimension in attracting industries to the town.

A programme of small industries for the town is of urgent necessity. In the past we have been grateful to the larger manufacturers who have established themselves in the town and who absorbed the plentiful workforce on the ground. But, if we are to progress and restore stability to the town's industrial base, we shall have to think in terms of the establishment of small industries there. There must be an outlet for service-type industries in places like Dundalk given the fact that there is sited there the regional college with its expertise percolating through the educational system.

In response to what I have had to say this evening I hope the Minister will be able to tell us that he is prepared to make available higher percentage grants to attract industry to the town.

There is also a difficult situation obtaining in regard to the water supply to the town. Indeed it has been contended that the IDA may even have had to turn away industries seeking large quantities of water, water-intensive industries, simply because an adequate supply was not available. Present indications are that Dundalk Urban Council have reached an agreement over the crux that has obtained for so long with regard to the town's water supply. It is a question of the Department of the Environment providing the necessary finance to finance or get a proper water scheme under way. In this connection I hope the Minister present will use his influence on his colleague, the Minister for the Environment, in order to get this matter moving. The industrial promotion programme of the town has been affected through its water scarcity.

The infrastructural development projects have passed their planning stage, having now reached the point of financing. I earnestly hope the Government will recognise that it is opportune and advantageous to provide such finance. Stage two of the inner relief road is ready to be initiated, with stages three or four in the pipeline. I hope the Government will devote the necessary urgent attention to their implementation and financing.

There is then the Customs complex to be built on the Border at Carrickarnon. If all of these types of capital projects were got under way they would provide much needed impetus to local industry.

I could not allow this opportunity to pass without referring to the level of taxation and its general crippling effects. Many redundancies have been caused by the very high level of taxation and value added tax. I hope the Minister for Finance, in his forthcoming budget, will implement the necessary steps to reduce those levels.

Mr. McGahon

I should like to thank my colleague, Deputy Kirk, for having allowed me speak, demonstrating the measure of concern we feel for our native towns. I concur in much of what he had to say. I would describe Dundalk as a disaster area. No other words could adequately describe the scene of deprivation and devastation that is the town of Dundalk, the largest town in Ireland of 27,000 inhabitants.

Deputy Kirk suggested that this disaster was in some way the fault of the present Government. I refute that allegation. I would suggest to Deputy Kirk that the present situation has been 15 years a-growing, that no other town in Ireland has suffered as grievously from the Northern troubles as has Dundalk, with no compensatory measures having been taken by any Government. In the early seventies Fianna Fáil were represented there by three Deputies in the county who failed to recognise the problem developing which has now reached nightmare proportions for its business people. I find it difficult to confine my remarks to the footwear and electronics industries.

An Ceann Comhairle

The Question on the Adjournment is confined to footwear and electronics.

Mr. McGahon

Dundalk has suffered devastating blows in recent years in the employment sector, commencing in 1978 when McArdles closed with a loss of 380 jobs. Since 31 October this year there have been 600 redundancies in the town, 200 in the American factory, the General Electric factory of ECCO. In fairness those redundancies were as a result of technological changes effected within that industry which nobody could prevent and comprised the outcome of continuing negotiations between unions and management for several months previously. The products that EECO make continue to sell very well on world markets.

There is even more cause for concern in the footwear industry, of which traditionally Dundalk has been its home both in boot and shoe wear. In recent years there has been the closure of several footwear factories including, as Deputy Kirk said, the American factory of Weyenberg which at one time employed over 300 people and which closed down last year. There is a definite threat to the very lifeblood, the continuation of the other factories in the area, chief among which are Clarks (Ireland) Limited. If that were to happen Dundalk's industrial activity would literally come to a halt.

An example of the devastation and lack of employment——

An Ceann Comhairle

I must point out to the Deputy that it is now 10.50 p.m. and I should call on the Minister.

Mr. McGahon

P.J. Carroll, the showpiece of Dundalk industry, had 125 redundancies this year for the first time in their 150-year history. That is the measure of the economic devastation in Dundalk.

I suggest that Dundalk needs the same type of help that Cork has received. Unfortunately we have not the same lobby in this Chamber, but we are demanding the same attention. I would ask the Minister to give some logical reason why Dundalk is not designated a disadvantaged area like every other Border town in the region. I would ask him to create a taskforce for the northeast region and to up-grade Dundalk as a priority with the IDA. Visiting industrialists are not brought to Dundalk. If they are brought it is only as an afterthought, having already visited Galway, Cork, Waterford and Limerick. He might consider the possibility of a Government subvention to substitute for rates for the shopkeepers of Dundalk since every second shop and public house there is for sale.

Although it is too late to come into effect this year, I would ask the Minister to consider for next year a reduction or abolition of excise duties for the month of December to enable Dundalk business people, their families and employees, to survive.

Minister of State at the Department of Industry, Trade, Commerce and Tourism (Mr. E. Collins)

I am grateful to the Deputies who raised this matter and I will try to deal with the two basic issues raised. Some of the other issues are not within the remit of my Department.

ECCO Limited in Dundalk was established in 1966 by General Electric to manufacture electronic components, principally for the US and European consumer electronic product market. By 1974 employment had grown to 1,700 and by this stage the company assembled low current transistors, rectifiers and diodes. Further expansion followed involving additional products, but employment fell to 970 in 1975 and continued to decline to its present level of 715. Regrettably the company were recently forced to announce a further reduction of employment in having to make redundant about 190 employees.

Along with other companies in the industrialised world, ECCO have had to compete with increased competition from low cost Far East producers, over the past ten years in particular. Several changes of product have been made by the company which, while not preventing decreases in employment, have at least enabled the company to maintain their manufacturing operation in Dundalk. In addition to the switch to more viable products ECCO have been forced by the competitive nature of the electronic component business and particularly the low cost competition from the Far East to engage in increased automation of their manufacturing process.

One must bear in mind the need for companies like ECCO to remain cost competitive, even though this may entail increased automation and concentration on a small number of key products and unfortunately may entail redundancies. In the last analysis companies must be free to carry on their business in the manner which they adjudge will best ensure a viable future. To attempt to force or to encourage companies to do otherwise, even if one could, would be pointing things in a very dangerous direction.

Deputy Kirk gave the impression that the Government were closing down industries in Dundalk. That is not so. We are going through a difficult recession and it is primarily up to the management of companies to keep their undertakings viable. Of course I am not happy with the prospect of the loss of 188 jobs in ECCO. I understand that 100 redundancies will take place by the end of this year and that there will be a further 88 in the first few months of 1985. These redundancies will be in the production and related areas, and as a result of these redundancies employment by ECCO in Dundalk will be reduced from its present level of 715 to 527. Despite these redundancies, significant though they are to Dundalk, ECCO will remain a major employer in the area.

I should add that the company have received substantial support from the IDA and a sum of £3 million had been paid by way of grants to the company up to 1983. That shows the measure of the Government's commitment to the company. The IDA have always kept in touch with the company and have given their full co-operation. Particularly since their difficulties in the mid-seventies the company have striven to engage in the manufacture of products which are the most viable in terms of the advantages and disadvantages of operating in Dundalk and have concentrated on the products which are most viable when measured against current market demand.

As part of their current approach to company development, the IDA are at present assisting the company in drawing up a strategy which will enable ECCO to stabilise their Dundalk operations by concentrating on a number of high value added products. This approach, it is hoped, will assist the company in avoiding the direct competition with low cost producers which has been the cause of some of their difficulties. Production of a high value added product will entail concentrating on the attainment of the highest possible level of production efficiency.

At the end of the day the future of ECCO in Dundalk will depend on the company's ability to demonstrate that they can and do produce a high value added product at a cost and a quality which will match the product of their competitors. It is up to the company themselves to realise the need for competitiveness.

I acknowledge that the footwear industry has a long tradition in the Dundalk area and one of the household names in footwear — Clarks — has had a plant there for many years.

The footwear industry in Ireland and in the EC has been experiencing difficulties in recent years. Increased competition, changes in fashion and demand and pressure on consumers' disposable incomes have all had an impact on the footwear market. This adverse impact has had consequences for employment in Dundalk.

The effects on companies have varied depending on their individual circumstances. The type of market served and relative competitiveness of firms are important factors which must be clearly understood.

In the Dundalk area one firm, Weyenbergs, closed late last year. They employed in excess of 200. Deputies will agree that there was an industrial relations problem in the plant.

Mr. McGahon

Used as an excuse.

Mr. E. Collins

It is not for me to adjudicate on that. In present economic circumstances it is vitally important that industrial relations be kept on a very sound basis in all industries. I understand that the future of the Weyenberg company is still under review. The Clarkes factory has recently announced redundancies. This means that by the end of the year employment will be less than 400. These job losses are to be regretted, and I share the concern of Deputies at reductions in employment in traditional long-relied on areas of industry. State agencies such as the IDA and CTT have provided assistance to firms in the footwear industry, including those in Dundalk. This has helped in no small measure to enable some firms to survive. This assistance will be available in the future as it was in the past.

I must stress that it is for firms themselves to develop the plans and take the action necessary for survival. State agencies can provide assistance in this regard but they are no substitute for planning and action by firms themselves. I will take note of the points made by the Deputies and bring them to the attention of the IDA.

The Dáil adjourned at 11 p.m. until 10.30 a.m. on Thursday, 6 December 1984.