Deputy J. Leonard has been given permission to raise on the Adjournment the question of the closure of McElroy's furniture factory at Castleblayney.
Adjournment Debate. - County Monaghan Factory Closure.
I should like to thank the Chair for the opportunity of raising this matter on the Adjournment. I regret very much that I have to speak of the closure of one of the major industries in County Monaghan, one for whose products there is a market. Unfortunately the industry was caught in the depression. It was on short time a few years ago and often that is the beginning of the end because the cash flow suffers. Probably the owners could not see any light at the end of the tunnel and they decided to take this action. This industry was in a strong position for a long time but that situation changed and it shows how vulnerable all industries are at the moment. It also poses the question whether any industries are safe.
This factory was established in the forties. It was started by two brothers from very small beginnings but through hard work and good business acumen it is now one of the finest production premises. Included in the complex is a machine shop roughly 30,000 square feet, a factory and assembly plant of about the same dimensions and there are also display centres and an administration area.
This factory is located in what could be called the home of furniture. The furniture and footwear industries are in the locality where the major sources of employment were when I first looked for a job shortly after the war years. This factory was considered one of the best business places in the area. Two years ago it had 120 employees who had steady employment: I have not the recent figures but I think the number has dropped to about 50 per cent. The wage bill was approximately £500,000 and that loss will have major effects in the area. The owners were good employers. The conditions were good and the product was excellent. The factory manufactured every kind of furniture, for the sitting room, dining room, kitchen and bedroom and all of it was in good quality hardwood. It was a fairly expensive product. After the war the factory manufactured a cheap product made of plywood but now people are more demanding and the factory changed its product to keep up with the times. In 1981 they won the Furniture of the Year award in Birmingham. At that time they were on the crest of the wave. They had a highly skilled workforce, fine premises and up-to-date equipment.
In 1983 we imported furniture valued at £24 million. The committee of Ministers of State that was set up to consider the question of import substitution should monitor the situation, through the IDA or Fóir Teoranta, to enable them to become aware of what is happening throughout industry. The firm involved in this instance moved with the times and they employed some of the best designers. Those who visited the furniture exhibitions in Monaghan in the past few years were very impressed with the products of this factory. I always attended those exhibitions and I realised that the quality was constantly improving. This firm, with another group in Monaghan, were the trail blazers in the furniture business.
In this Border area we are hit very badly in many sectors. I am not so naive as to say that the Government are to blame for the closure in this case. I am familiar with the background and I have been at meetings with the directors of that company with other Deputies. We were also in touch with the IDA and Fóir Teoranta and were aware of problems with regard to cash flow and stock. Even when we were talking to the firm they were negotiating with interests outside the country and considering linking up with an international group to supply furniture through their factory.
The Department of Labour, the Department of Finance, the IDA and Fóir Teoranta should get together to consider the position of many industries. Many factories that closed did so because they were not competitive or because the markets abroad collapsed. However, in this case we are talking about a saleable product, where there is a highly skilled workforce turning out a quality article. We will face a serious situation if, when this depression bottoms out in two or three years time, we find that we have lost valuable industries like this. In this case in particular the factory had good markets in England and Northern Ireland where they could compete with the best.
We have the Crannac example before us. The Minister may say to me to go and organise the workers but it is not as simple as that. In the past few months when the workers of this factory found that their business was slipping I am sure many were depressed and lost confidence. The most important thing for any industry is confidence. It is my conviction that an air of depression is fatal for any undertaking. I hope the various Departments I mentioned will get together and consider this whole matter.
There is a serious problem when the liquidator moves in and I saw this recently in a factory in Clones that had a labour force of 40 people. The public representatives had problems dealing with the liquidator, although we were trying to influence takers of that factory. There should be some section in the Department which would negotiate with the groups involved. Crannac was a shining example. Many other firms tried to set up as a co-operative but collapsed. Nevertheless, in my view this is worth trying. Many of those men got fairly substantial redundancy payments and I believe some of them would have been interested in getting a little help.
In the early part of this century selfhelp was preached by many, Arthur Griffiths especially. The co-operative movement was preached by men like Father Finlay, Horace Plunket and Paddy the Cope. Never was the application of that co-operation spirit more needed than it is today. We must have a hard look at workers' co-operatives. We have read of such co-operatives in the west of Ireland and in the Basque area of Spain where entire areas were developed and revolutionised.
There is no point in my telling the Minister that he should give these people money or get Fóir Teoranta or the IDA involved. They have been trying to do that up to now, but I am asking the Minister to look at this firm again and maybe he will visit the factory before it goes into liquidation. If he does, he will see that this is one of the best and most adaptable factory spaces in the country. There is always a little strife in business but by and large labour relations there were good. They turned out a very good saleable product and the labour force was adaptable.
When the first group were made redundant I met a man at my clinic who had worked 25 years in that factory. He said he had never done anything but woodwork but over the previous month he had tried to get a job in every manufacturing outlet in County Monaghan without success. He said that if he had to spend the rest of his life unemployed he did not know how he would face it. This is the most serious problem. Men with 15 or 20 years of their working life before them will find it almost impossible to secure alternative employment in my area.
In every report carried out on the Border regions my area has been recognised as underdeveloped and disadvantaged. Over the years the IDA did terrific work developing industries but they are in a valley period at present. The development organisations in the North are revving themselves up. The factory in Clones is drawing workers across the Border because they have set up a textile industry there similar to that which closed on this side of the Border. I can see serious implications here. On the one hand, workers who regrettably lose their good jobs could be attracted across the Border because the Northern authority are setting up enterprises along the Border with the sole intention of supplying the market on this side. We are not complaining because this is a two-way traffic but we could lose some of our best workers this way.
I appeal to the Minister to ensure that all avenues are examined through the IDA and Fóir Teoranta and through discussions with some of the directors of that firm and the workers. He can be assured that the public representatives of that area, without making political play of this, will do all in their power to get a taker for that factory or to ensure that a workers's co-operative will be set up.
First, I want to give Deputy Leonard an assurance that every effort will be made to find a new owner for the company. He can also be assured that all the State agencies involved, particularly the IDA, will take every possible step in that regard.
I want to join with Deputy Leonard and the Ceann Comhairle in expressing regret about the difficulties in which McElroys have found themselves. This has been a flourishing business for quite a long time, giving good, sound employment, and it was one of the largest furniture manufacturers in the country. Unfortunately, while many companies in this sector has been able to withstand the recent recessionary conditions, and indeed prosper within them, this company have been unable to overcome the difficult environment which currently exists on the home and export markets.
Deputy Leonard was very fair when he went to some length to say that he did not want to point the finger at this Government. He was quite right. Each company has a responsibility to guard against an adverse trading condition. There is always a very grave responsibility on management to ensure that the financial, marketing and managing needs of the company are catered for. That is often a very difficult task and in recent years the environment has not been the best for encouraging many industries.
However, I do not think this enterprise should be written off and the Deputy can be assured that the relevant State agencies are doing all in their power to secure a takeover of this company. Deputy Leonard referred to the need for the Department of Labour, the Department of Finance, Fóir Teoranta and the IDA getting together. The main rescue agency is Fóir Teoranta. The IDA and Fóir Teoranta meet weekly to review cases of firms in difficulty. That practice has been long-established and I review firms in difficulty on a weekly basis to ensure that the necessary steps are taken to protect companies and to ensure that companies in difficulty are either rescued under existing ownership or through new ownership. That is a well-established practice in my Department and in the Department of Finance, who have responsibility for Fóir Teoranta.
Obviously it would not be possible for me to go into detail of the discussions with the interested parties, or indeed to identify such parties in a takeover.
However, I am hopeful that these present discussions will result in a favourable outcome for the workers and the other stake-holders in this long-established company. I am particularly concerned for the future of the workers who have taken such a pride in their work and possess such valuable skills built up over the years. Deputy Leonard pointed this out clearly. It is an aspect of this case which must be fully considered and which will be an asset in relation to affecting a takeover.
I would hope that, in the event of a takeover of the assets, the new developments occurring in the furniture industry in Ireland, especially in the area of the new export market initiatives now being taken, will find a ready response from a revived firm.
While I would not wish in any way to minimise the very serious problems which have beset this company we can be encouraged that the furniture industry in general has weathered the economic recession perhaps better than many other sectors. The industry has increased its share of the Irish market and also has made significant inroads into export markets in the teeth of intense competition from foreign manufacturers. That is a healthy sign for the industry.
My Department have always maintained a special interest in the furniture industry. The Task Force on the Furniture Industry, which is chaired by my Department, comprises representatives of all the relevant State agencies as well as of the furniture industry itself. The task force have done considerable work in the promotion of the furniture industry and have been particularly active in connection with the recent Córas Tráchtála initiative for a new concept in export marketing by Irish firms. This new initiative, known as the Link Programme, has brought international marketing expertise together with the skills of the Irish furniture manufacturers to penetrate new markets in the United States and elsewhere. I hope that this programme will be well underway this year and will significantly boost Irish exports of furniture.
I hope that a revived project arising from the McElroy operation will be able to avail of the significant advantages afforded by the Link Programme. The prospects of being associated with such a programme should make the McElroy firm all the more attractive as a takeover prospect and I will ensure that the IDA and the other State agencies involved will spare no effort in securing a resumption of the high quality furniture with which McElroys has been associated in the past. The Deputy raised the question of co-operatives. I assure the Deputy that any proposal made to the State agencies involving the concept of a co-operative will be treated under the same criteria as other proposals to take over the firm. Any takeover of any firm must satisfy standard criteria in relation to finance, marketing, management and viability. We would be happy to see a co-operative structure evolve if it is a sound, viable proposition. There is only a favourable climate towards co-operatives on the assumption that they are commercially viable. That assumption is central to the consideration by State agencies of any takeover situation.
To my knowledge there have been no industrial relations problems in the firm. There have been very good relations on the factory floor. The situation in McElroys is an unhappy one. Because of its tradition, the employment they have given and the high quality product they have produced I would be optimistic of a viable project coming out of the present difficult situation of the company. I am optimistic that a solution will be found for this company.
The Dáil adjourned at 5.25 p.m. until 2.30 p.m. on Tuesday, 12 March 1985.