The following Deputies indicated a desire to raise by way of Private Notice Question the sudden closure of the Hyster plant at Blanchardstown, Dublin. The Deputies are as follows: Deputy Dick Spring, Deputy Michael Keating, Deputy Tomás Mac Giolla, Deputy John Bruton and Deputy Jim Mitchell. I will ask Deputies to rise in their places and put their question to the House in that order, that is, the order in which these questions were submitted to my office.
Private Notice Questions. - Hyster Plant Closure.
asked the Minister for Industry and Commerce the action, if any, he proposes to take in relation to the sudden closure of the Hyster plant at Blanchardstown, Dublin 15, and the consequent 250 job losses; if he will make a statement on the manner of the closure; and the plans, if any, the IDA have to recover the substantial investment made by the Irish Government in the plant.
Deputy Michael Keating is not present.
asked the Minister for Industry and Commerce if his attention has been drawn to the decision by the Hyster management to close their plant in Blanchardstown, Dublin 15, without any notice or warning; the measures, if any, he intends to take to prevent the loss of more than 220 jobs at the plant; the total amount of public funds given to Hyster from the IDA or the Exchequer; the measures, if any, being taken to have this money recovered; and if he will make a statement on the matter.
asked the Minister for Industry and Commerce in regard to the closure at 2 a.m. today of the Hyster plant at Blanchardstown, Dublin 15; (a) if he had any notice of this decision; (b) if he took any action to avert it; (c) if he believes the company can be persuaded to change their decision; (d) the amount of money in each category of grant-aid in factory space provided by the IDA and other State agencies to this project, the equivalent amount committed by the company itself; (e) and if the State grants will be refunded by the company in regard to the training grants paid by the IDA to the project, the total amount of the grants paid, the nature and cost of the training towards which it was paid, if it was genuine training in all cases and if the proportion of the wage costs in the project in each year were represented by training grants and other grants; (f) if employment grants, normally confined to service industry projects, were paid in this manufacturing project and how this can be reconciled with the provisions of industrial development law; (g) the amount of R & D grants paid in this project by the IDA, the cost and nature of the R & D undertaken, the ownership of the rights to results of the R & D and where it will be used; (h) the redundancy terms offered to the employees and if he is satisfied with the procedures adopted by the IDA, his Department and the Cabinet in approving this project in May 1982 and with the protection now being afforded to the employees.
asked the Minister for Industry and Commerce if he will make a statement on the closure this morning of the Hyster plant at Blanchardstown, Dublin 15; the steps he is taking to try to save the plant; and if he will give details of the steps he or the Government have taken in the matter.
It was with great regret that we heard of the decision of Hyster Automated Handling Ltd. to cease operations at their Blanchardstown plant. I am sure the House will share this regret and join with me in expressing my concern for the employees who will lose their jobs as a consequence. This news is particularly regrettable in so far as the operations at Blanchardstown represented the establishment of an integrated stand-alone operation incorporating research and development, training, production and marketing in this country. In this respect it met the industrial policy criteria followed by successive Governments and enshrined in the 1983 White Paper on Industrial Policy. Deputies will I am sure recall that it has been a frequent criticism of overseas policy and that it has failed to attract projects which incorporated these desirable features.
In 1982 the Industrial Development Authority agreed a significant support for the establishment in Ireland of a worldwide headquarters for the design, development, manufacture and marketing of a new generation of automated materials handling systems. The company planned to provide jobs for 450 people within five years, and this was seen as a most desirable type of investment project for Ireland because of the quality of employment opportunities particularly for the graduate population. The project was to be the only centre for Hyster Corporation to develop a new generation of products.
At the peak stages of the project, towards the end of last year, 289 people were employed and a range of new products had been developed at the plant for markets worldwide. The IDA had paid £15 million to Hyster mainly in relation to the people-related activities of the investment. The most significant proportion of grants paid related to the comprehensive advanced training programmes, the research and development activities and employment grants. Some £2.9 million of IDA grants relates to capital investment by the company. In addition the Authority provided a custom built factory at a cost of some £6 million. This factory was to be purchased by the company in the period 1988-92. The company was also the recipient of grant assistance from Córas Tráchtála of £553,000.
I am advised that during 1986 it became apparent that the project was not developing as planned and that significant losses would be incurred by the company. The company undertook a review of the business in co-operation with the Industrial Development Authority. This indicated a need for a restructuring of the company's plans, particularly in the light of the failure to achieve its targets.
A breakdown of the cash grants paid to Hyster is as follows:—
Capital Grants (Machinery & Equipment) £2.9 million
Training Grants £6.2 million
Employment Grants £3.5 million
R & D Grants £2.5 million
In the matter of employment grants raised by Deputy Bruton the project incorporated significant R & D, marketing and other functions specified by the Minister for Industry and Energy under the International Services Programme and the grants approved were to be paid in respect of employees in job categories designated under that programme.
The Hyster company was up to yesterday in discussion with the Authority on a modified business plan concentrating on those manufacturing elements which might have potential for providing the basis of a viable business over the longer term. The IDA are now in discussion with the Hyster company on the question of revocation of grants and will pursue the company for their liabilities.
I am advised by the IDA that the company's decision is irrevocable and that an immediate priority for them will be to pursue every avenue to provide new opportunities for employment of the workforce at Blanchardstown.
I will be calling Deputies in the order in which their questions were presented to me.
I agree with the Minister's regret about the workforce and that they should be our first priority. The Minister has told us that in the region of £21 million was given to the company and I should like to ask him if the first notice of this action by the company was received at 2 a.m. this morning given that the IDA were in discussions with the company yesterday.
I should like to ask the Minister, or the Minister for Labour to do everything possible to ensure that the provisions of the Acts dealing with redundancy payments and the minimum notice and terms of employment are adhered to for the benefit of the employees. Will the Government seek advice, if they have not received it, as to whether the company have been in breach of the law? Is the Minister aware that the company have a worldwide reputation for this type of activity? Will the Government be making their disgust and anger known throughout the world at the behaviour of the company who were involved in discussions yesterday and, without any notice, made the decision which faced employees this morning?
I should like to tell the Deputy that notice was conveyed from the American company to the IDA at 5.30 p.m. yesterday. I can assure the Deputy that the Minister for Labour will use all resources necessary to ensure that suitable discussions for the winding down of the company take place. I understand that discussions are taking place between the company and the staff work council involved. The company have a worldwide reputation and I have no doubt that the IDA will be taking that matter up with them when discussing the revocation of any money.
The statement by the Minister that the decision by the company was irrecovable was the most frightening part of his reply. In view of the fact that the staff are non-unionised — presumably that was one of the conditions of Hyster coming to Ireland — will the Minister say what steps he is taking to ensure that the staff get their wages due to them, holiday pay, redundancy pay and so on? How were the IDA fooled in regard to this? They were able to say on Thursday last that the Hyster plant would not close although there would be some redundancies. In view of the fact that there was a similar occurrence in Blanchardstown two years ago in the case of the Mostek factory how were the IDA fooled for the second time? Could it be more sinister, were the IDA fooling the staff that there was no prospect of a closure, something that is now being said? Is the Minister satisfied with the strategy adopted by the IDA or have they altered their strategy in view of the number of closures in recent times?
On the question of staff I should like to tell the Deputy that discussions are continuing between the company and the staff council on the site. I should like to assure the Deputy that all influences will be exerted by the IDA who are in constant touch about this. In regard to the statement that the IDA were fooled, I should like to tell the Deputy that it is clear to us that the IDA were working diligently for some time to get a restructured or streamlined package to maintain some employment there. The discussions were developing on those lines until yesterday when the company announced that they had decided that the project here had failed and they were not continuing.
The Minister has told us that the Irish taxpayer has put up in the region of £20 million and I should like him to tell the House how much, under the terms agreed by the present and previous Government, the company have put in as counterpart to that substantial figure from the Irish taxpayer? Will the Minister tell the House who will have the right to use the results of the research and development work carried out at Blanchardstown towards which the Irish taxpayer has paid £2.5 million? Why did the Government in 1982 not seek a parent company guarantee of the repayment of the money, as was done by the same Government in the Mostek case? Furthermore, in regard to the employment grants which were apparently paid in this case, could the Minister say if there is any other instance where a manufacturing project was paid employment grants? Does he agree that those grants are solely intended to be paid to service projects? Could the Minister also say if he is satisfied, having looked at the file — I realise he has not had that much time to do so — that the company, the IDA and the Cabinet had adequately examined the market for the product being produced in Hyster in Blanchardstown before they approved the expenditure on a contractually irrevocable basis of such large sums of money by the Irish taxpayer?
Hyster had an investment equity of £4.2 million in the company and own the results of research and development but the people trained in such skills are in this country. In relation to a parent company guarantee being available, anybody who knows anything about this project will recognise that there was keen, world wide competition to attract Hyster to various countries, including north and south of the Border in this country. At the time the IDA did a very successful job in attracting them here. I do not have the figures in regard to employment grants for other companies but if the Deputy puts down a question I will answer it or send the information to him. I should also like to remind Deputy Bruton that the Government of which he was a member in 1984 supported a grant of £14 million towards another project by Hyster with only £1 million coming from them——
That is not so.
Those are the facts.
Order, please. A question has been asked, let us hear the answer.
The reason it did not go ahead was that the former Government asked the company to put up an additional £1 million. They had already sponsored grants of £14 million——
We only offered support if they came up with more money.
The Government of which the Deputy was a member committed £12 million or £13 million towards another project by Hyster.
Does the Minister not acknowledge that the cost per job in this case is extraordinary? Can he give the precise cost per job given the outlay by the Exchequer and the numbers employed? Will he assure the House that he will take every step possible to ensure that workers get their rights? Is he prepared to ensure that his Department and the IDA treat the Dublin west area as the blackest of employment black spots? Will he outline the measures he will take to get alternative employment in this area?
I categorically state that in so far as the Government are concerned, workers will get their rights. I have already replied to another point made by the Deputy by saying that the IDA and all other agencies will be directing their attention towards providing replacement jobs in the area because of the high technological skills available from a very important, mainly graduate, workforce. It is disappointing that this project has failed but, notwithstanding the losses, we will do our utmost to ensure that these skills will be utilised in this country and in the Blanchardstown area. I do not have a calculator but I am sure the cost per job is substantial and could add up to £50,000 or £60,000.
Perhaps it would be in the region of £80,000 to £90,000.
I welcome the digression of the Minister into the position which obtained in 1984. It is a credit to the former Government that we did not accept the deal at that time and that we asked for more investment from the company. Has the office of the Attorney General advised on the legal situation in relation to the contribution made by the State? What are the prospects of the Government, on behalf of the taxpayer, recovering any of the substantial investment made?
I am confident that we will be in a position to recoup some of our investment because Hyster is a world wide organisation and will not be anxious to put their credibility in doubt. The IDA are at present having discussions with Hyster in relation to the revocation of grants and will pursue that matter. I do not have the advice of the Attorney General as I got Deputy Bruton's question about 35 minutes ago——
The Minister got my question at 10 o'clock this morning.
I hope that the Minister will retain the R & D section if money will not be refunded. The same promises were made when Mostek closed down. The Blanchardstown area is fast growing with huge unemployment and when Mostek closed nothing happened. Could the Minister say whether there are any plans for a major new industry for Blanchardstown? There was a suggestion a year ago that a major food industry was opening up. Has the Minister any more information in that regard?
I am not in a position to announce anything, neither is the Minister for Industry and Commerce. I am aware that discussions are taking place which could lead to substantial employment in the area.
Does the Minister agree that an important lesson of this project is that a parent company guarantee should be sought in every case where grants are approved? Perhaps he would consider that as a positive outcome of this very regrettable incident. Does the Minister also agree that he is perhaps naive in relying on this company's concern for their reputation if it is the sort of company that closed in the middle of the night and treats people with very high skills, talent and undoubted dedication in such a brutal and uncaring fashion? While I wish the Minister and his colleagues in the IDA every success in their endeavours——
A question, please.
——to recover the money I hope that the Minister has something more substantial to rely on than the company's regard for their reputation.
How typical is the cost to which the Minister referred in relation to other IDA projects? Does he agree that it gives rise to the need for an urgent review of the whole approach of the IDA to these sort of projects? When will such a review be undertaken?
As the Deputy will appreciate, it is very high-tech research employment which is costly. Naturally it would cost a greater amount per job than in the normal course of events. We would all like to see more jobs being created but we are in competition with many other countries in this regard; 49 of the 50 States in America now promote employment potential in their State. That is the kind of competition we had to contend with. I am not suggesting for a moment that we should be giving higher than the odds in relation to cost per job. All Deputies must appreciate that this company was in a very high-tech research area and that is why the cost was substantially higher than normal.