In deference to my colleague. Deputy Donal Carey, who is a Member for the constituency. I will confine myself to 15 of the 20 minutes allotted to me.
GAC have been manufacturing buses since 1979 and I have a personal interest in them because I negotiated the agreement and helped to get the factory started despite intense opposition from some quarters. If this factory had not got under way, we would have had to import buses through the North Wall, although some people would have been happy to do that. Many pundits and commentators speak about industrial relations in an ill-informed way but I am proud that, as a trade union official, I was involved in setting up this company and that they have a 100 per cent industrial relations record. During the six years of their existence there has never been a strike or stoppage. The workers are made up of people made redundant from other factories who did not have the necessary skills at the time but who were taught and trained very quickly and became a highly efficient workforce. When they first went into production it took about 34 days to complete one bus, but now they can produce one bus per day so there has been a huge improvement in productivity.
If this factory is allowed to close the whole country will lose the skills and knowledge which have been built up over the past six years. There are 200 people directly employed by the company. There were 34 redundancies last March which were willingly accepted by the unions as a contribution by them towards reducing production costs. The workforce also invested some of their own money in the factory and accepted a pay pause of six months last year. In 1983 there were 120 redundancies and there has been a great rationalisation of the workforce since then. Side by side with the development of skills and improvement in productivity, glowing tributes have been paid by senior CIE management to the quality and high standard of the buses which the factory produced.
It is a well known statistic in macro-economics that for every person who loses a job there is a dependency ratio of five people, a husband, wife and three children, so in this case we are talking about a direct loss of 200 jobs. In the context of what we have said in this House over the past number of years it is important to realise that 250 other employees in downstream industries supply the component parts for the buses so we are talking about a total workforce of 450 people. It means, therefore, that if the factory closes 2,250 people will join the social welfare register. The Minister for Social Welfare, when speaking on the Estimate for his Department in 1984, gave statistics which indicated that every 1,000 people in receipt of social welfare cost the taxpayer £2.8 million. When we analysed the figures which I have given here, it is clear that not only are you throwing 2,250 people on to social welfare benefits but you are also denying the process of import substitution which this factory were meeting.
We said in Building on Reality that we wanted to develop small industries and to increase import substitution which would affect the balance of payments. There is a crying need for buses and we are not talking about handouts for these people. To use economic jargon we are talking about a circle of transfer. There is a commitment to £36 million for replacement of buses; £18 million has already been paid and I ask the Minister and the Government to give a commitment to the workers that the rest of the money will be forthcoming to keep this factory afloat until they can successfully develop a prototype for export. At present a prototype is being developed for Darlington in Britain which, if successful, will be sent there in January for a four months' trial. They will know the outcome of the trial in June and they are highly confident that it will be successful which would mean an initial order of 250 buses to tide them over.
If the Government give a commitment in regard to the £18 million still outstanding it will save the factory. In mentioning the sum of £18 million we must remember that the Government will take back about £12 million in PAYE, PRSI and VAT. It makes no sense for the Government to allow such a factory to close and to throw so many people out of work. The dependency ration in this country has gone mad, indeed it is the worst in Europe. We have a continually contracting workforce and an expanding dependent social welfare body of people. It can be compared to nature — the tree which becomes top heavy will break in the storm.
The workers in this factory have paid their taxes and, unlike the farmers, are not looking for handouts. They merely want to work and the Government should make every possible effort to save the factory. I understand that the Minister for Communications gave a commitment to the workforce in 1983 — at least that was their understanding — that no buses would be imported while we had a factory here with all the component skills necessary to meet our demands. I understand 800 school buses are in need of replacement, some of them 15 years old. I also understand from representatives by the workers that CIE are using other buses to supplement the existing school bus system. That is wrong.
There is nothing as bad as losing one's job unless it is to be told this type of news from a distance. I ask the Minister to meet a deputation from the work force tomorrow morning. We are expecting about four bus loads of workers from the Shannon area together with the workers from the dependent downstream industries. They are coming here at their own expense to demonstrate their anxieties and fears about the loss of jobs and the damage that will be caused to themselves and their families in the new year. I ask the Minister to have consideration for the feelings of the workers and, perhaps, arrange for some Minister to meet them. I know I am giving him very short notice and that there is a Cabinet meeting in the morning to discuss the Estimates and the budget.
To summarise, only 40 buses remain to be built and they will be completed by the end of February 1986. The company have already issued protective notices to the staff giving notice of lay offs on or about 6 January 1986. At present they are building a bus for a United Kingdom customer which could represent a significant potential export order in 1986-87. I understand that the Dáil were told money would be made available to keep plant in operation until the end of 1986. I hope that commitment will be honoured. School buses are vital to the continuation of the company and there was a commitment in Building on Reality to the replacement of the school bus fleet. If the company closes with the loss of 200 jobs in Shannon and 250 more in the supplying companies, that will mean a significant cost to the Exchequer. Essential replacements would need to be purchased abroad and this will have an adverse effect on the balance of payments. Finally there will be a loss of potential export revenue to the company.
Somebody will say, in macro-economic terms, that we cannot afford the loss of £6 million or £8 million but we are talking about a black hole with hundreds of millions of pounds going to America. For a net investment by the State of about £6 million we can keep 2,250 people off the social welfare bill. The workers are the only people who are paying any income tax.
