Deputy P.J. Morley has given me notice of his intention to raise the matter of the threatened redundancies in Farah Limited at Ballyhaunis and Kiltimagh, County Mayo. Deputy Morley has five minutes to present his case and the Minister has five minutes to reply.
Adjournment Debate. - Mayo Plant Redundancy Proposals.
I want to thank you, a Cheann Comhairle, for affording me the opportunity to raise this matter on the Adjournment. With your permission I would like to give one minute of my time to Deputy Jim Higgins.
Is that agreed? Agreed.
The news of the impending redundancies in Farah was received with consternation in both Ballyhaunis and Kiltimagh. This firm is a very important one in the area employing approximately 150 people in each town with an average individual income of approximately £150 per week, and a total weekly pay packet of approximately £25,000 in each town. It is the only industrial employment available in Kiltimagh and any significant drop in numbers employed there would be a serious blow to the economy of the town and district. Any significant reduction in the numbers employed at the Ballyhaunis plant would be an equally serious blow to the economy of that town and its hinterland. The company are a prestigious one, their product first class, their management second to none and their workforce in both factories excellent, giving the management complete satisfaction. Indeed, they recently took on additional personnel and the present difficulty is completely outside the control of the company. The fears are that the redundancies sought now are only the thin end of the wedge and that down the road, as has been the pattern in other cases, a closure will be announced. The hope is that the present action will be confined to redundancies only, with as few of those as possible.
The firm's present difficulties stem chiefly from the current slump in the British market which was their chief outlet. I know the Minister, and the IDA, will do all in their power to assist this firm over its present difficulties, but I would ask them both to redouble their efforts in this case as the loss of any jobs in Mayo is far more socially and economically serious than in many other places because of the low employment base in the county already.
This county is threatened with wholesale depopulation due to widespread migration and emigration arising out of lack of jobs there. Indeed, Mayo was one of the very few counties that lost population in the last intercensual period. Despite a growth of over 40,000 in industrial employment nationally since 1987 there are fewer people in jobs now — almost 1,000 fewer — in Mayo than there were in the early eighties. This is despite the heroic efforts of Mr. Tom Hyland, Regional IDA manager and his staff and others like Mr. Sean Smyth and his county development team and of course Údarás na Gaeltachta. I know it is a difficult time to attract industry and I congratulate the IDA who are doing a great job in the circumstances, but of whatever little industry comes here, the bigger and more developed centres get the lion's share and there appears to be nothing left for places like County Mayo which is relatively remote and underdeveloped.
It is against this background that I am asking the Minister and the IDA not only to ensure that Farah get over their present crisis but to have a close look at our part of the country and see if it would not be possible to give some special treatment to that area to encourage job creation. Clearly it is the most depressed area of the country and the area now most in need of help. Present schemes will not improve the situation significantly as they are now administered, unless the agencies administering them are directed to make whatever funds are available for development more accessible to the people, firms and organisations in Mayo and in the north Connacht area generally.
I would like to thank Deputy Morley for giving me some of his time and to thank the Minister for coming to the House to deal with this matter. In the last three weeks 1,000 people have been put on short time work in Mayo. There have been nine factory closures in the county in the last two years. If ever there was a black triangle industrially it is Mayo at present, due in no way to the workforce of the county. They are totally committed, as in this case. I urge the Minister to intervene at the highest possible level, and not just by meeting members of the management of the enterprise in question when passing through England. What is needed is direct intervention with the management in El Paso. I urge the Minister to send somebody from the IDA post haste to ensure that everything humanly possible is done to impress upon the management the urgency and necessity of keeping this enterprise in place. We are not witnessing the death of a town; we are witnessing another chapter in the death of a county. It can and must be arrested and I urge the Minister to use his good offices and power to ensure that Farah in Kiltimagh, Ballyhaunis and Galway is not another chapter in the sad industrial history of Mayo and Connacht.
I have been keeping myself informed of the situation affecting Farah Manufacturing (Ireland) Ltd., and I share the Deputy's concern at recent developments which have led to the proposal by the US parent company to implement redundancies at the Farah plants in Kiltimagh, Ballyhaunis, and Galway, affecting some 145 employees overall. The House will realise, of course, that in the case of any enterprise a decision of this type is a matter essentially for the owners and management of that enterprise.
Farah's Irish operations were established in 1981 with a takeover of the former Wrangler plants at Galway and Ballyhaunis. In 1985 the company expanded their operation with the establishment of their plant in Kiltimagh. Farah currently employ 419 people at their Irish plants in the production of mens trousers, primarily for sale in the UK. Unfortunately, a large part of the problem is that almost the entire market for the output of the three plants is in the United Kingdom which is in recession at the moment. In February this year the company were forced to introduce short working time — three day week — owing to the recession in the UK, which had led to a downturn in sales and to the build up of unacceptable high stock levels. Unfortunately, the continuing adverse trading conditions on the UK market have exacerbated the company's problems and have now led to the announcments of the redundancies to which the Deputy refers.
I am conscious of the adverse impact both economically and socially of the loss of 145 jobs as a result of the proposed redundancies. I can understand the disappointment of those who are being made redundant and I sympathise with their situation. However, I am sure the Deputy will appreciate, the company must react to the market situation, and it is better that the necessary corrective action is taken now since delay could lead to the necessity for more drastic action at a later stage. In this regard, I can assure the Deputy that the IDA are maintaining close contact with developments and every effort is being made to safeguard the maximum number of jobs possible at the three Irish plants.
Considerable resources have been employed in the past decade by the State to help clothing companies to adapt to changing market opportunities and to restructure in order to increase their competitiveness. A wide range of measures is in place and being implemented on an ongoing basis to address the weaknesses identified in the sector, which include lack of scale, lack of attention to marketing and lack of finance. The measures in place include financial packages with increased emphasis on State support for marketing and technology; marketing initiatives — home and export — company development planning; training programmes and so on and involve the state agencies working very closely with the sector.
The major challenges facing the Irish clothing industry in the future are the completion of the internal market in 1992 and the longer-term phasing out of the Multifibre Arrangement (MFA), which permits developed countries to maintain quota restrictions against low-cost imports from developing countries.
The clothing industry must prepare itself to meet these challenges, and the increased competition from low cost sources which they will bring, by increasing its competitiveness and developing its export markets. It will be necessary for the sector to place increased emphasis on management and marketing functions and to exploit the advantages of quality and quick response to the needs of the consumer in order to remain competitive in the face of the inevitable increase in imports from low cost sources.
While the support agencies play an important role in helping the industry to develop and expand, much of the initiative rests with the industry itself to exploit new markets and to be competitive on the home market.