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Dáil Éireann debate -
Tuesday, 18 Feb 1992

Vol. 415 No. 8

Adjournment Debate. - County Donegal Knitwear Factory Closure.

I thank the Ceann Comhairle for affording me the opportunity of raising this important matter to Glenties and to County Donegal. I should like to congratulate the Minister of State, in her new capacity, for showing an interest in the matter and for being present in the House.

The closure of McDevitts knitwear factory with the loss of 53 jobs last weekend is a devastating blow to the town of Glenties and the surrounding area. McDevitts knitwear factory has been operating and providing employment in this part of Donegal for well over 100 years. It has sustained and supported many families for four or five generations. Last Friday's announcement was the latest if not the final fatal blow to industrial employment in the Glenties area. Over a number of years the town has lost almost all of its employment sources. Bord na Móna, who were major employers, have ceased operations there and only a small number of their former employees who formed a company are employed there now. Coillte Teoranta's operations in the Glenties area are almost at a standstill. A number of other employers have also ceased to operate. Apart from catering and service jobs, up until last weekend one could say that McDevitts provided the only industrial employment in the area. Regretfully, they have now ceased to operate.

The people of the town were shocked and devastated by the announcement last weekend and they found it impossible to understand how an industry with a long tradition and all the ingredients for success had simply closed down. The workforce of the factory are skilled and committed, the quality of the product they produce is second to none and there is a continuous demand for it. However, there have been 53 extra people on the unemployment register in Glenties since Monday morning. Many of them are young people. Some of them are just married, are building homes and starting their families. Many have mortgage repayments and other financial commitments to meet. What future do they have other than life on the dole or, perhaps, even emigration?

Glenties is one of the best known of all County Donegal towns. The Minister of State is a regular visitor to Glenties. Glenties has achieved the singular distinction of being the overall winner in the national Tidy Towns Competition on four separate occasions. That must be a record. It has also been immortalised in the writings of Patrick McGill, in whose honour the McGill Summer School is held every year. I know the Minister fully understands the significance of this to Donegal, having been a regular attender at that school. To add further to its litany of glories, Glenties is the town which inspired Brian Friel's masterpiece "Dancing at Lughnasa", a play which has been hailed not alone in Glenties and Dublin but also in the West End and Broadway.

County Donegal has the highest per capita unemployment rate in the country and Glenties must have one of the highest per capita unemployment rates in County Donegal. This town is in urgent need of attention and action by the job creating agencies of the State. I believe McDevitts knitwear factory has a future. A capital injection would be sufficient to get this factory operating again. The crafts and skills of the workers, which have been accumulated by workers over generations, must not be allowed to disperse. I appeal to the Minister to get in touch with the IDA and arrange a package of help or assistance which will enable this long established industry to re-open.

Glenties is on the edge of the Gaeltacht. It may not be part of the official Gaeltacht but I put it to the Minister that as much Irish is spoken in the shops, businesses and houses of Glenties as there is in many Gaeltacht towns. Perhaps Údarás na Gaeltachta or Roinn na Gaeltachta could be of some assistance as well. This town is bereft of employment and it needs attention urgently. I hope the Minister will do something positive about this in the near future.

I wish to thank Deputy McGinley for raising this matter which gives me an opportunity to find my voice in my new capacity. Only for him, God knows when I would have got an opportunity to speak.

I want to assure the House that I share the Deputy's concern about this matter. I thank him for his kind references to my many visits to Glenties. As the Deputy knows, I was very involved in the Patrick McGill school. I have always enjoyed my visits to County Donegal. My constituency colleagues, the Minister of State at the Department of the Gaeltacht, Deputy Pat The Cope Gallagher, and Deputy Mary Coughlan, have also spoken to me about this matter. I know they share the Deputy's concerns in this regard.

I have read some of the history of this factory, which had been most enterprising and innovative since its establishment during the last century. I can well imagine the effect the closure of this factory will have on the wider community in Glenties and the surrounding areas. As the Deputy said, this factory has been the town's major employer over the years. As I am sure the Deputy knows, McDevitts made serious losses during the first nine months of 1991. Following a petition by the company the courts appointed an interim examiner on 3 October 1991. He made his interim report to the High Court on 14 October 1991 pursuant to section 15 of the Companies (Amendment) Act, 1990. In his interim report the examiner stated that the company had sustained substantial trading losses. It was his view that the company needed time to reorganise, to develop a new trading strategy and to raise additional equity in the hope of securing its future. He was also of the opinion — this is particularly important in the context of ongoing talks — that subject to a number of reservations the company could survive. My Department kept themselves informed of developments and the IDA were very supportive. I am also aware that the workforce were more than willing to ensure the continuity of the business and gave their full co-operation to whatever reorganisation had to take place. I want to thank the workforce for the very open and positive attitude they took to the proposals which were put forward at that time.

The examiner reported back to the court in early November 1991 and again on 17 December when he presented his final report. Further court hearings were adjourned during January 1992 while discussions continued with the company's bankers, the Revenue Commissioners and other interested or involved parties. Unfortunately — perhaps this is the note of discord — one of the parties to the proposed restructuring withdrew his support two days before the court hearing on 7 February 1992. In those circumstances, the examiner had no alternative but to recommend to the court that the company be put into liquidation. A liquidator was appointed on the same day.

Rationalisation and restructuring of the textile industry has taken place since the seventies when Ireland joined the EC. I know this is no comfort to the workforce of McDevitts, but I want to put it into an Irish and European context. This was part of an ongoing requirement to adapt to changing market opportunities. Textile industries in Athlone, which had a long tradition, were part of the huge casualties during the early years of the seventies. Considerable resources have been employed in the past decade by the State to help clothing companies. Strategies have been put in place, involving State agencies in modern methods of marketing and appropriate action plans. Obviously more marketing strategies will have to be put in place and more pivotal arrangements made whereby there will be a quick response to ongoing needs.

As the House is aware the multilateral system for trade in clothing and textiles is currently under review in the context of the negotiations on the Uruguay Round, and a commitment has been given for the eventual integration of trade in textiles and clothing with GATT on the basis of strengthened GATT rules and disciplines. That is all very interesting and discursive but the reason for Adjournment Debates is to give an opportunity to local Deputies to express on the Floor of this House their concerns about a particular issue. I hope that as part of the proposed Oireachtas reform more emphasis will be placed on matters such as this. The House must be seen to be relevant. Therefore while all the information before me in the departmental brief is very interesting from my point of view it is not what the Deputy wants to know.

I assure the Deputy that I am fully conscious of the adverse impact, both economically and socially, of the redundancy of 53 people at McDevitt's in the Glenties. The House will realise of course that in the case of any enterprise a closure decision is a matter for management and is a very sad one for the community. Obviously there are details of this case which it is not open to me to reveal at this stage because of their confidential nature, but the liquidator has confirmed to the IDA that he has already had a few inquiries which he is pursuing. I assure the House that the IDA are in constant contact with those involved and will do everything possible to ensure a satisfactory outcome of these inquiries.

The IDA regional manager has agreed to meet with the employees, SIPTU and members of the general public to discuss the situation in Glenties. I have asked the IDA to keep my Department informed of developments. In recent years many jobs have been created in Donegal. I assure the Deputy that I will keep in touch with him concerning this matter. I hope the inquiries will result in tangible efforts to solve the problem.

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