Dáil Éireann debate -
Tuesday, 16 Jun 1987

Vol. 373 No. 8

Adjournment Debate. - Longford Factory Closure.

Tomás Mac Giolla

I want to thank the Ceann Comhairle for allowing me to raise this matter on the Adjournment. I put down a Private Notice Question but it was turned down on the basis that the factory had not closed, that there was a three week schedule of closure and that, therefore it was not a matter of urgency. According to announcements that have been made the factory is in the course of closure. This is a most unusual case. I doubt if any such case has ever occurred in our history. This is a case of an Irish firm taking an extraordinary decision which seems almost to amount to treachery.

The history of the case is that 85 people were to be laid off last November by the manager of this company, Mr. Hanlon. The decision as to who should go was taken by management without consultation with the workers and without conceding that the workers involved had any right to consultation in the matter. The question of seniority did not arise but certain people were picked to be laid off. There are approximately 200 to 210 employees in this factory and they all objected to this. The plant is as big as Hyster Automated Handling Limited which went out of business last week in Blanchardstown. The staff of the factory in Longford showed extraordinary loyalty to each other. Rather than have 85 people let go they were prepared to work a three day week or on a week on, week off basis in order to keep all the people employed. That was an extraordinary indication of loyalty of workers to each other. They were prepared to sacrifice part of their wages in order to keep their colleagues employed. This contrasts completely with the extraordinary selfish and greedy attitude of the employer.

The case then went to the Labour Court which upheld the position of the staff and agreed that the appropriate thing to do would be for the staff to work a three day week or to work on a week on, week off basis. The manager refused to accept the Labour Court's decision, saying that suggestion was not possible but he did not give any reason as to why it it was not possible. The staff then went on strike. That was five weeks ago.

The manager, Mr. Hanlon, has now decided to close the factory putting all 210 workers out of work and thereby causing immense hardship to the town of Longford. He will move his business to Liverpool where he will, he says, make a bigger profit and remain in business. He will make his decisions, he will not change his mind, it is his business and he will do what he likes with it. Surely that is an extraordinary attitude as we are approaching the 21st century. We thought this Victorian attitude was gone for good but there are people like this who think they can move the clock backwards, that they are under the Thatcher Government. They may be coming close to it. They think they have a Margaret Thatcher to back them up in smashing unions, destroying the interest of workers in their workplace and denying them the right to question managements' decisions. This type of attitude is being taken from multinational companies.

Perhaps Mr. Hanlon considers his company a multinational company because he has 40 employees in Britain. He thinks he will be as good as Semperit (Ireland) Limited who tried to overcome the union by saying they would close down unless the workers did what management said they should do. The workers there had to accept the decision of management in order to keep their jobs. The position was similar with regard to Packard Electric Ireland Limited in Tallaght. This is becoming the norm in the multinational area so perhaps Mr. Hanlon thought he could do the same — close down the factory if the employees did not accept what he said. A stop must be put to this attitude because it is highly dangerous. This is an effort to wipe out at one stroke all the gains workers achieved over a century of struggle and return to the old Victorian attitudes of the boss is the boss with workers having no rights except to do what they are told, get out when they are told and start when they are told.

Mr. N. Treacy

He who pays the piper.

Tomás Mac Giolla

We must wipe out that Victorian attitude because we cannot go back to the greedy, exploitive and entrepreneurial ideas of the 19th century which left workers in penury, working long hours for low pay, worse conditions and less safety in factories and businesses. That is creeping in in Ireland. We must not go back irrespective of what people like this might try to do.

I should like to use the word "patriotism" in regard to this factory owner in Longford. Fianna Fáil have always come back to the basic principle of stand by our country and our people, whatever their faults in various areas. That was the old type of patriotism and that is what this is all about, standing by our people, our communities and our country, whatever differences we may have politically. We should try to develop and help each other like the workers did in that factory who made sacrifices to help others. That patriotic attitude is absent in the case of this man who had links with the Fianna Fáil Party.

Mr. Reynolds

And still has.

Tomás Mac Giolla

I hope Fianna Fáil will instill patriotism into this man. If we do not have that and if he makes the type of moves he has said he will make there is only one word for it, treachery. It is a treacherous act to workers, their families, to a town, to a county and to a country. This man has described himself as a self-made man, a self-made millionaire.

An Leas-Cheann Comhairle

The Deputy is a Member with whom the Chair has never had to take issue but I should like to counsel that perhaps in deference to the practice here that we do not attack a person who is absent we should couch his criticism in some other way, perhaps by referring to the management.

Tomás Mac Giolla

The press referred to a self-made millionaire and I want to make the point that nobody is self-made.

An Leas-Cheann Comhairle

The Deputy might have second thoughts about the word "treachery". That is a suggestion.

Tomás Mac Giolla

I am making a statement which has been made many times that no man is an island. I am sure the Chair understands what that means and will agree with it. No man is self-made; everybody is made by those around them whether it is the environment, the assistance they get or by exploitation.

Mr. M. Higgins

In the Irish case it is with the assistance of the taxpayer.

Tomás Mac Giolla

In this case the factory was established with assistance from the State and the taxpayers. The country helped to provide a factory which would give employment in Longford and, perhaps, make somebody rich. Those who get assistance from the State, whether it is in the form of grants or tax relief, have a debt to the society which gives them that help. They have a responsibility — it has not been seen in this case — to give back something. I accept that this man created jobs but now he is shutting down the factory. I suggest that anyone who reneges on their debt to society, and on their responsibilities, loses any right to further assistance. I suggest that in this case, as in the case of Hyster, a concern that shut down without any notice to their staff — the IDA have declared that they are pursuing Hyster for every penny of assistance they gave — if the person insists on proceeding as he said he intends he should be pursued for every penny of grant or assistance he was given. I suggest that the Revenue Commissioners try to ascertain what taxes might be owed in PAYE or PRSI.

Mr. Reynolds

They are scandalous allegations.

Tomás Mac Giolla

I have asked that that should be done in every factory and business in the country, whether they are closed or open. Any money that is due should be brought in.

Mr. Reynolds

The Deputy should know what he is talking about.

Tomás Mac Giolla

Why should people be allowed to take PAYE or PRSI from employees and not hand it over to the State? The Revenue Commissioners should, if any money is owing to the State in taxes, pursue the company before all the assets of the concern are moved out of the State to Britain.

I understand that in the initial stages, and since, the company were helped by the purchase of its goods by health boards. That was of vital importance in the early years and it helped to build up exports. I understand that health boards have contracts with the company. I suggest that if the factory in Longford is closed and the concern moves to Britain all contracts here be cancelled and nothing more be purchased from the company. This is one of the most serious occurrences in Irish industry and if it is to be copied by other companies — it appears that the company are copying multinationals — it could lead to a disaster. Many managements are being taught to develop such confrontations with their workforce, to threaten closures and, if they can close, to do so. That is a dangerous development and it should be stopped.

I recognise that there may be personal friendships involved and I understand that that might be an inhibiting factor but the whole ethos of Fianna Fáil through the years is directly opposed to this type of action. I hope the Government will be no different from former Fianna Fáil Administrations and that irrespective of friendships they will ensure that the long tradition provided by Fianna Fáil of attempting to build Irish industry will be maintained.

The Government should make it clear that this type of action is unacceptable and will not be tolerated. The Government should take whatever steps are necessary to ensure that all grants paid to the company to date are refunded and that all taxes are paid. The Government should ensure that if this type of action is pursued the company will get no further contracts from the State or other public bodies. In the meantime great pressure should be put on the company not to take this action by pointing out that this will be the Government's attitude. They should put the maximum pressure on the company to retain the factory in Longford. They should have appropriate meetings with the workforce and the Labour Court again, if necessary to ensure that management and workers come to an understanding, as has been done in many other industries on how they can work together rather than having the confrontational attitude which has developed. I hope the Minister will bring the parties together immediately to endeavour to ensure that they can work together, whether on a three day week, week to week, or whatever other basis in order to help management over whatever difficulties they have. At the same time the Minister should should ensure that the workforce have their say and that their point of view is listened to and that both can come to an agreement to save the jobs of the workforce.

Minister for Industry and Commerce (Mr. Reynolds)

First, it is extraordinary that Deputy Tomás Mac Giolla, a member of The Workers' Party should come into this House to raise the question of the closure of a factory in Longford. I totally resent the inflammatory and despicable allegations made by Deputy Mac Giolla against an upright citizen. I challenge Deputy Mac Giolla to make these allegations outside this House. It is totally despicable and unworthy of any Deputy of this House to try to allege that this man has not paid his taxes and PRSI. The Deputy should inform himself properly before making such allegations.

Let us listen to the true story. The branch secretary of the Irish Transport and General Workers' Union, Mr. Bob Brady, is a decent man and he did not give the Deputy his information. I want to have nothing to do with The Workers' Party in Longford in relation to the preservation of jobs in Longford. We know what The Workers' Party did in other factories. They should keep their hands off Longford as we will look after our own business. If the Deputy wants to say Noel Hanlon is a friend of mine, I have 10,542 friends in Longford and he is one of them. If he wants to challenge that, he should come down and put up one of his people in Longford-Westmeath and we will talk to him. We have plenty of people to represent us here and we do not need the Deputy to come in and try to stir up more trouble which will cause the loss of 220 jobs which all of us are trying to save in Longford. He should get his facts right.

The news that Noel Hanlon of Hanlon (Ireland) Limited decided to cease operations at his plant on Dublin Road, Longford and has decided to relocate operations at Liverpool is, indeed, most untimely and regrettable. It is a very serious body blow to the economy of Longford town and county. Noel Hanlon (Ireland) Limited was established in 1970. At the beginning it employed eight people and there were 224 people employed when it ceased. The company manufactures GPR ambulance bodies which are sold almost entirely to regional health authorities in the UK where it holds almost 65 per cent of the market.

Hanlon's have a virtual monopoly of the Irish market. Sales in the UK market have been declining in recent years because purchases there are financed from each region's allocations from the British Department of Health and are, therefore, subject to the absolute amount of funds available and must compete with other capital expenditure requirements in the health sector. Spending restrictions in the UK have led to a decline in both volume demand and prices. As a result towards the end of 1986 ambulance production in the plant fell from 14 to ten vehicles per week. Hanlon's competitive advantage has been that its product has earned and sustained a reputation for being superior in quality to the product of similarly priced competitors. However, the position of the punt vis-ávis sterling has further eroded the company's competitive advantage and this combined with the decline in UK market is blamed for the company's problems. Uncertainty has been created — which Deputy Mac Giolla and his cohorts failed to recognise — in the real market in which all of us have to exist and in which we have to sell our products to pay our workers.

In August 1986 the company informed the unions that, due to a shortage of work, it was forced to introduce short time working which would operate on a week on week off basis. This continued for five weeks on and five weeks off and was found to be totally unsatisfactory from a production point of view. Earlier that year a three day week was introduced and lasted for only two weeks with disastrous production results. That is not denied by anybody. After the hearing the Labour Court made the same recommendation that had been tried and failed on two different occasions. That is the real crux of the problem that has led to this strike. The company had to go back to full time working for the shortest period possible.

In November 1986 the company informed the unions that it was laying off 85 workers on a temporary basis and that the remainder of the workforce would be retained in a permanent capacity. The company offered full time employment to those workers it considered most suitable to produce the required output.

If the Deputy calls this Victorian management, let me explain. There are welders, painters, carpenters, sheet metal workers, coach builders and unskilled people employed in this plant and there is no way you can operate a last in first out system. Everybody who knows about production lines knows that. I accept the trade union principle but where it cannot operate to sustain the productive capacity of a factory, some other approach has to be taken. It is time people took their heads out of the sand and recognised that. That is the reality of the situation down there. This is unacceptable to the unions who claim that the workers should be retained or laid off on a seniority service basis, all things being equal. This was rejected by the company's management for the reasons I have just outlined.

As no agreement could be reached at local level the matter was referred on 29 December 1986 to the concilliation service of the Labour Court. A conciliation conference held on 4 February 1987 failed to resolve the dispute and the matter was referred to the Labour Court for investigation and recommendation. The court investigated the dispute on 26 February 1987. As I said, the court recommended that the work available should be shared among the total workforce on the basis of an undertaking given to the court that the necessary production targets would be met and the required standards of quality attained. This had already been tried and failed. The Labour Court also recommended that should this proposal not work out over a three month period there would be lay offs. At that Labour Court hearing the management gave an undertaking that as soon as the order book revived all the people would be returned to work. That is the reality of the situation and those are the facts.

The company management reacted by saying this was not acceptable to them because a similar type of arrangement had been tried previously and had failed and had proved to be impractical because of the nature of the production methods and technology employed. The managing director of the company stated clearly and unequivocally that he has to be in the position to run the company; otherwise he cannot stay in business and that is the nub of the matter. He told the media that the board of the company took the decision to relocate in Liverpool where the company already has a service with 12 people employed, not 40 as the Deputy tried to indicate to this House. He also stated quite clearly that he has no wish to go to Liverpool but because of the deadlock in the situation forced upon him, he is left with no alternative.

I have tried unsuccessfully to do something over the past number of weeks. The Bishop of Ardagh and Clonmacnois has intervened on two occasions to try to find a resolution to this problem. He found no way to break the deadlock. A three man strike committee appear to have taken over total control. A statement was made by a member of that three man strike committee to 50 or 60 workers who begged to have the situation reviewed which I will read into the record of this House: "There will be no meeting or no talks until Hanlon's is in liquidation." Do Deputy Mac Giolla and his party and the people they represent take this approach? If that is their ideology in relation to the retaining of jobs, it is not mine. I make no apology for saying that it was a scandalous and irresponsible decision and any respectable trade union should take disciplinary action against a man like that who endangered the jobs of 220 people by making statements which would inflame an already deadlocked situation. That is the reality in Longford town where the jobs of decent people are being put at risk.

Only this morning I made a last attempt to ask Mr. Hanlon to withhold the running down of the factory. Management have gone in to work this week to finish 30 ambulances. Already orders are being lost. Some people for their own reasons, be they what they may, invited British newspapers and television over to destroy the operation of the only ambulance factory in this country. Noel Hanlon started from nothing and took the risks. He looked after his workers well. There is a good trade union record in this country but the reality is that to stay in business you have to be competitive. You have to produce your ambulances at the right price or you do not sell them. If the Deputy wants to throw 220 people out of work the Irish people will have no part of it, and we in Longford will have no part of it either.

The branch secretary of the union is a decent man but, wherever the influences are coming from, I tell the Deputy, we will not stand for it in Longford town. If the Deputy wants to force an Irish industry to go to Liverpool, let him force it and he will get his answer whenever the election comes. If Deputy Mac Giolla has any decency he will withdraw the allegation he made that the man was not paying his taxes. Indeed five years ago that man took over a factory that was failing and doubled the workforce. I will have no part in trying to get a job back for a man who would make a statement like that and I call on the union tonight to take disciplinary action. If that was done some commonsense might return to the situation.

The Dáil adjourned at 12.30 a.m. on Wednesday, 17 June 1987 until 10.30 a.m.