I have been keeping myself informed of the situation affecting Klopman International Limited, and I share the Deputy's concern at recent developments in relation to the Tralee operation. I would, however, like to point out to Deputy McEllistrim that closure of the Tralee plant has not been proposed. What the parent company, Dominion Textiles Inc., Canada, have announced is the implementation of a major rationalisation of their European operations in both Italy and Ireland, which admittedly will result in job losses in Tralee. 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.
In March 1989, Dominion Textiles Inc. purchased the former Burlington industries plants at Tralee and Gillogue, County Clare. Since the purchase, the Tralee plant has operated as Klopman International Limited employing 494 people at present in the production of polycotton fabrics for the work wear and leisure wear markets. The former Burlington dyeing plant at Gillogue has remained idle since 1985.
Over the last two years Klopman have being experiencing very difficult trading conditions caused by recession in the UK market and competition from low cost sources, principally India, which has resulted in depressed prices in Europe for the company's product. This has led to the company's recent announcement of their rationalisation programme. The reduction in output at the group's Italian plant will result in the loss of some 300 jobs there. I understand management are seeking a reduction in the working week in Tralee from seven to five days which will result in about 115 redundancies and some reduction in earnings for the remaining workforce due to loss of shift allowances.
I am fully conscious of the adverse impact both economically and socially of the proposed rationalisation plan in the Tralee area. I can understand the disappointment of those affected and I sympathise with them. However, management insist that the implementation of their rationalisation plan is vitally necessary in order to maintain a viable operation in Tralee and I am sure the Deputy will appreciate that the company must react to the market situation. Moreover, it is important that 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 am particularly concerned that official strike notice has been served on the company. While I can understand the frustration of the employees concerned at this difficult time, industrial action would not be helpful in the context of the parent company's review of the Tralee operation and I would appeal to the employees and to the unions concerned not to damage the future prospects of the company and the plant by going on strike within the next day or two as is apparently proposed.
As already mentioned, a major factor giving rise to the company's current difficulties is the increase in imports from low cost sources. This is a consequence of the ongoing liberalisation of trade in textiles in the context of the multifibres arrangement which governs international trade in this area. Notwithstanding this, my Department have had ongoing contacts with the company to ensure that all possible protective trade measures were applied to assist them. We have had limited success in this area but, of course, the Deputy will appreciate that decisions in relation to the introduction of trade measures are taken on the basis of strict economic criteria which must be agreed at EC level and I must regrettably say that other member states, in particular in this case the UK and Italy, have not always shared our concerns in the matter.
As the House is aware, the multilateral system for trade in textiles is currently under review in the context of the negotiations on the Uruguay Round and a commitment has already been given for the eventual integration of trade in textiles into GATT on the basis of strengthened GATT rules and disciplines. The position adopted by the Community, which is supported by Ireland, is that integration should take place smoothly in order to create confidence and predictability, which is important for business both in importing and exporting countries. I can assure the House that Ireland attaches particular importance to the need for the strengthening of GATT rules and disciplines in relation to selective safeguard mechanisms, anti-dumping measures, subsidies, etc., which would allow for a system of genuinely fair trade. We maintain that the duration for the phasing out of existing restrictions should depend on the extent to which these GATT rules and disciplines are strengthened.
To return to the current difficulties faced by Klopman International Limited, I can assure Deputies that I am keeping in very close touch with developments. Both the IDA and my Department will continue to keep in regular contact with the company to assist them, as far as possible, in dealing with their present difficulties in an effort to secure their future viability and to keep job losses to a minimum.