In accordance with the Order of the Dáil this day, the House will now hear statements in relation to the situation at United Meat Packers Limited. Before embarking on this business I appeal to the House that we address ourselves to this problem in a fashion which is characteristic of the high standards which normally prevail here and not in a way which only reflects our occasional lapses.
Meat Processing Company's Financial Crisis: Statements.
Why do you presume it will be otherwise today?
One would not need to be a very discerning person not to have noted from the earlier discussion of this matter——
If you had to live with the tragedy you would know all about the gravity of it. The debate will be very much in accordance with the rules of the House.
If it is not, the Chair can employ certain sanctions. I will say no more.
We are aware of that.
United Meat Packers began their operations in Ireland in 1974 when the chairman of the group Mr. Sher Mohammed Rafique purchased a slaughterhouse in Ballyhaunis, County Mayo. Since then, the company have expanded to their present size which comprises some five export approved plants slaughtering cattle and sheep. The factories are located at Ballyhaunis, Charleville, Ballaghaderreen, Sligo and Camolin, County Wexford. All of the factories slaughter cattle except that at Camolin which slaughters sheep only. The plant at Ballyhaunis, which is the largest of the group, processes both cattle and sheep. The company also operate a cold store at Banagher, County Offaly.
In 1991 the UMP group accounted for 14.5 per cent of total cattle and some 24.5 per cent of total sheep slaughtered at Irish meat export plants. It is the second largest meat processor in the country after the Anglo-Irish Beef Processors group and have an annual turnover approaching £250 million. The group also have holdings in both Britain and the Netherlands and total turnover, including the UK and European companies amounts to approximately £450 million.
May we have copies of the script?
They are being provided. The Irish operations are understood to be structured separately for both the UK and continental holdings while an examiner was appointed to the Irish subsidiaries only. I understand that the group employ about 700 people full-time. This figure would increase during the peak killing season.
The group have been rumoured to have been in financial difficulty for some time. It appears that this necessitated a re-organisation of the group's debt structure following discussions with their main bankers, a syndicate of seven banks led by Banque Nationale de Paris.
The fire at the Ballaghaderreen plant in January 1992, which is estimated to have cost the group some £15 million, led to the immediate crisis. Short-term credit facilities of some £15 million were arranged to help the group survive in the aftermath of the fire. When repayments on these loans became overdue, Mr. Des Guilfoyle was appointed examiner to the group by the High Court on 17 February last, with permission to borrow £3 million. On 2 March 1992 he was given permission for further borrowings of up to £4 million, having previously successfully borrowed the £3 million figure.
Last Monday, 9 March, his period of examinership was extended for a further week. This was to facilitate him in endeavouring to overcome substantial difficulties he had encountered in arranging a financial package to enable him to continue to operate the group while he prepared a report for the High Court on their viability. Intensive negotiations have taken place since Monday between Mr. Guilfoyle and the three banks involved, BNP, Bank of Ireland and Allied Irish Banks, which ended late yesterday afternoon having failed to find a solution whereby the funding could be provided.
The Irish banks refused to put forward moneys because they have the strongest reservations about the prospects of a positive outcome for the examinership. They believe if moneys were put forward now they would simply delay an inevitable complete overhaul of the UMP operation. Under intense pressure from Government members the two main banks — Bank of Ireland and AIB — came together with the examiner. They agreed, under certain conditions, to provide £4 million but it was on the strict condition that this money would have to be repaid at the end of the examinership. They made it abundantly clear that they did not wish to be involved in the UMP operation on a long term basis. The examiner could not satisfy this condition as he could not guarantee that the money would be available at the end of his examinership.
That is where the Minister came in.
Alternative proposals for super preferential status were rejected by the banks. The Minister for Finance contacted the president of BNP in Paris to ask the bank to reconsider their decision not to advance further moneys but the Minister's request was turned down. As late as this morning my colleague, the Minister for Finance, had a further meeting with top executives of the two main Irish banks. The Minister impressed upon them the concern of the Government that they should act in the national interest in protecting jobs and in assisting an industry of vital national importance which has excellent prospects in the longer term. The banks have responded in a very positive manner and they have indicated unequivocally their wish to act immediately and constructively in finding the best possible solution to the present crisis.
Why not now?
Why did they not do it yesterday?
When UMP are put into receivership the banks are ready to work with the receiver in providing working capital to secure an immediate resumption of activity. They are particularly conscious of the need to keep the plants in the west of Ireland in full operation in the months ahead.
What about Camolin?
This means that the plants in the west, about which there has been so much concern, should continue in operation. The banks are also ready to provide the necessary financial suppport for potential purchasers of the individual plants. The Irish banks believe that the only constructive way forward is to remove the very large burden of debt on this company. They confirm that there would be no problem about providing £4 million but they felt this would serve no useful purpose because of the large overhang debt which is of the order of £50 million.
And the £550 million for Goodman International.
They acknowledge that this company encompass a viable meat industry and they want to be part of the future development of this industry.
It was one-twelfth of what Goodman got.
I very much welcome the positive response that has come from the Irish banks this morning. I welcome, in particular, their support for continuing operations in the west. I am confident that BNP, the main creditor, will also respond positively so that jobs can be protected and a strong and viable industry will emerge from the receivership.
There have been some inaccurate and mischievous comments in relation to the Goodman Group. There have been claims that the Government treated UMP differently and less generously than the Goodman Group when they got into financial difficulties in August 1990. According to a report in theCork Examiner this morning the Government provided £550 million to the Goodman Group. I wish to put the record straight on this once and for all. The Government gave no money, not one penny, to rescue the Goodman Group. What the Government did was recall the Dáil to speed up the enactment of legislation, which had been close to finality in any event, to allow an Examiner to be appointed to the group. It was this same legislation that was used to appoint an Examiner to UMP.
Once the Examiner was appointed to the Goodman Group no further action was taken by the Government, unlike the UMP case continuing discussions during the past week involving Ministers, officials and the banks. If some Members put as much effort into this matter as they put into trying to stir up hysteria, perhaps we could proceed a little further.
We are trying to save 900 jobs for the many families involved.
That is an insult to those people.
Thousands of families.
One thousand five hundred jobs.
Given the size of the company's liabilities a constructive receivership is the best method of ensuring that the plants will continue in operation and the jobs will be protected. There is every reason to believe that the plants will be bought from the Receiver. On the basis, they would commence operations free of the large debt which has encumbered UMP. That is the key to this issue; we have to free the company from this large over hanging debt. Given the inherent profitability in slaughtering cattle and sheep I have no doubt that the plants will be sold and will operate profitably. As I mentioned, the banks have given undertakings that they will be willing to fund the purchase and ongoing operations of the plants concerned.
What about the cheques?
Finally, I should inform the House of my intention to meet the Receiver as soon as possible after his appointment and to impress upon him the need, first, to maintain the plants in operation as going concerns to protect the jobs involved and, second, in so far as possible, to protect the small creditors, in particular the farmers concerned. To this end I will offer the Receiver my full assistance, the assistance of the Government and the co-operation of the various Departments concerned.
What about the cheques that are out?
Deputies, we appealed earlier to treat this in a fashion which would be representative of the standards. I am appealing to the other side to do the same.
People are holding cheques.
I am calling Deputy Deasy.
If you were left holding a cheque, you would not be worried about standards.
Deputy Belton, I will not take that from you. Deputy Belton will behave himself or else he has an alternative, he can remove himself from the House.
I would like to apologise, if what you have asserted is correct, but two people recently telephoned me to say they were holding cheques.
Your personal involvement with people outside is not representative of what the House is doing. I have called Deputy Deasy to address the House.
The Minister talked about protection and I want——
You are taking this out of Deputy Deasy's time.
First, I want to dispel any notion that we, on this side of the House, are trying to make political capital out of this potentially tragic situation. As you asked initially, I hope the debate will be conducted in a constructive manner. That is what I intend to do. We are dealing with the livelihoods of at least 900 families, and probably 1,500, who are directly involved in these four processing plants together with the two depots.
The impact further afield on those two communities, and ancillary industries, will probably affect not just 1,500 people and families but thousands, if not tens of thousands of families. If the company are allowed to collapse many other businesses in those localities, Ballaghaderreen, Ballyhaunis, Camolin or Charleville, will find themselves in serious financial difficulties.
Deputy Belton was quite correct to ask the question of what will happen to those farmers who have cheques from this company which will not be cashed. I believe there are cheques out to the extent of £4.5 million. This means that many farmers will find themselves in serious financial difficulties. Likewise, I understand that creditors, that is small businesses and perhaps larger businesses, in the localities concerned are owed in the region of between £6 million and £7 million. Again, it will be a tragedy for those communities if this group close. These points should be borne in mind.
We are speaking here about the second largest processor in the largest indigenous industry here. It is ironic at this time, when we are spending so much of our time in the Dáil debating a jobs forum that we are now overseeing the collapse of the second largest company in the largest industry in the country. Let us cast our minds back and remind ourselves that the largest company in the beef industry, the Goodman Group, which was supported to the extent of £550 million, albeit through the financial institutions, are living on sufferance. What we are seeking is the continuation of this company, United Meat Packers, be they known as Halal-United Meat Packers or whatever; we want to see the company continue in their entirety and the jobs in question retained.
In his statement the Minister referred to debts of £50 million. I dare say there are many companies with debts of £50 million if they were to go into liquidation in the morning. There are very few companies with assets on hand to offset their liabilities. From my recollection, companies such as this when they go into receivership are asset-stripped.
It would be of help if the Taoiseach and others listened.
This means that jobs will be lost hand over fist. The plants at Camolin and Charleville are modern and stand a good chance of continuing, even when a Receiver is appointed, but the bulk of the jobs are in the west, in Ballyhaunis and Ballaghaderreen and they are not so well structured. The concern of Deputies from the west hinges on that fact. Will those factories at Ballaghaderreen and Ballyhaunis continue in existence if the company go into receivership?
That is the question confronting us today and my objective view is that they will not unless action is taken by State agencies in conjunction with the financial institutions here. We do not expect the banks to take unilateral action in coming together to formulate a financial package to save this group. However, we expect a Government initiative in conjunction with the Industrial Development Authority and the financial institutions to ensure that the plants continue to operate at maximum capacity because once they close, and I am referring in particular to the two plants in the west, they may never re-open. We cannot afford to lose that number of jobs in deprived areas.
I put it to the Taoiseach who is in the Chamber, and to the Ministers for Agriculture and Food and Finance that they must oversee the financial restructuring of this group, be it under different ownership or management, because they must continue. Not alone have this group provided valuable employment but their activities are highly praiseworthy because the bulk of the beef and lamb they kill does not go into intervention. They are not a drain on the European or Irish taxpayer, they sell on the open market in Ireland, more often in Britain and the Continent. They are a decided asset to the agricultural community, the Exchequer and the nation. They cannot be let go down the drain; those plants will be locked and the chances are that those in the west may never reopen. It will be a case of asset stripping, which is all that financial institutions are interested in when a receiver has been put in, and we are aware that this was the case this morning. I am also aware that the company have appealed that decision to the Supreme Court. Why did the examiner, in conjunction with State agencies, not continue his examination until the time schedule had elapsed? The time schedule should not have elapsed until next Monday morning.
I should like to remind Members on the Government benches of similar rescue operations. I will not refer to the Taoiseach's company——
Go ahead. The Deputy referred to Deputy Barry's company.
I wish to refer to the Insurance Corporation of Ireland owned by Allied Irish Banks. When we were in Government in the mid-eighties that company collapsed with huge liabilities potentially running into billions of pounds. We as the Government of the day underwrote those AIB liabilities to the extent of £300 million to £400 million. Fortunately, the company were able to trade themselves out of their financial difficulties. I believe that United Meat Packers can do likewise if they are given the opportunity by the Government. However, it must be a Government initiative. The Associated Banks, including the AIB, who have a huge debt to repay to the State, have reneged on taking a positive stance on this issue. They are allowing many farmers to suffer financial ruin and allowing numerous industries to go to the wall in conjunction with the Halal United Meat Packers Company.
We are prepared to be helpful and constructive but we expect Government action. The people, especially those in the west, also expect action from the Government.
It is quite clear that a deep crisis surrounds the immediate future of the UMP group of companies. That crisis will affect 1,500 families in the most direct possible way. It will affect every single farmer who is owed money by the company, or who relies on the company as an outlet for product. It will affect the banks, the downstream suppliers, and the local economies of the towns and hinterlands in which these plants are located.
Above all, it will have a devastating effect on local communities. Many of the communities involved, especially in the west, have struggled against the odds for years, often in the face of Government neglect. The blow to hope and to morale which would be caused by the total collapse of these companies would take years to recover from. Already, there must be families in the west who are yet again contemplating the prospect of emigration.
It gives me no pleasure to say this situation was largely predicted when the Dáil was recalled in August 1990. In the speech he made on that occasion, the Leader of the Labour Party, Deputy Dick Spring, called for a "detailed, root and branch, analysis of the medium-term and long term situation facing the industry." He went on to say: "The Government must accept the bounden obligation of drawing up a plan for the industry, based on the principle that no more monopolies will be allowed to be developed, and taking into account the need to develop new markets based on the excellence of the product and the quality of production." He concluded that speech by saying: "what is crucial here is that we recognise now that the beef industry cannot be allowed to struggle from crisis to crisis. I call on the Taoiseach now to ensure that once this short term situation has been resolved, the necessary steps will be taken to place our beef industry on a sound footing."
It was plain to see even then that the crisis which had overtaken the Goodman Company — whatever its causes, and this is not the place to go into them — was certain to have repercussions throughout the industry. It was clear that the failure of the State to address the need for a co-ordinated approach to the development of the food industry would have repercussions. It was clear that the failure to recognise the over-dependence of the industry generally on intervention and its failure to develop and diversify into value-added areas would have repercussions.
In this sense, the Government must take a large measure of responsibility for what has happened in relation to UMP. The Government have turned a blind eye to the ramshackle way in which too much of the food industry is run. They have concentrated on crisis management rather than on development. They have preferred to sell off powerful productive assets like the Sugar Company rather than to use those assets as the focus of a properly planned and co-ordinated approach.
Of course, it is not particularly productive for us to say that the Government are the only body responsible for the crisis facing UMP. It is my understanding that a figure of £40 million, which has been quoted by many sources as being the amount needed to put this company back on a sound footing, is in fact only part of the problem. I am told that £40 million may in fact be a more accurate reflection of the gap between the assets and the liabilities of this company.
That is not true.
I am quoting what I understand——
Deputy Jim Higgins will have to restrain himself. He will get an opportunity later to speak.
We do not know — and we have not been told by the Minister —what the financial situation of the company is. I was referring to what I understand it to be.
Serious question marks must, therefore, be raised about the management of this company. It is impossible to arrive at a situation where a company is effectively trading insolvently, to the extent that this company seems to be, without at least the suspicion that cavalier mismanagement is involved. I have been told, for example, that in recent days substantial amounts of cash have been transferred out of this jurisdiction by senior people in this company. I sincerely hope that my information in this matter is incorrect, and I will be very grateful if the Minister is in a position to confirm that nothing like this has happened.
The bottom line has to be that we cannot turn our backs on the communities dependent on the jobs and cash flow generated by this branch of the industry.
Over the last ten years, this country has faced a number of crises similar to this one, and in every single case that I can think of, it has fallen to the Government, as it must in this case, to spearhead a response. We do not need to concentrate simply on the Goodman affair to find a precedent for action. Although it is clear that the Government reacted in enormous haste when a crisis developed in the Goodman Company, it is doubtful, to say the least, if the action taken then was enough, in terms of its character, to protect the long term future of the food industry. However, in the past, Governments effectively rescued the banks from the consequences of the ICI affair, through a combination of actions which were ultimately successful although they entailed certain risks at the time. When Dublin Gas was faced with a similar crisis, Government action ultimately proved effective as well. Perhaps the outstanding precedent to which we should point was the rescue of the PMPA through action co-ordinated by the late Frank Cluskey. That rescue was effected in the first instance by the appointment of an administrator, under legislation which is still on the Statute Books, and through the investment in the company of resources raised through a relatively modest levy on insurance premia. The company when returned to a sound financial basis were returned to the private sector and they continue to operate on an effective basis today.
The Labour Party will support any action now proposed by the Government to adopt a similar procedure in this case, but we will not support any attempt by the Government to wash their hands of responsibility or claim that this is a matter which must be left to market forces to resolve. The Government have a bounden obligation to act to preserve the crucial nucleus of this enterprise and to protect as many of the jobs as possible. It is often said in agri-business circles that whenever a vacuum is allowed to be created, somebody moves in. I have not the slightest doubt that attempts will be made by people whose monopolistic ambitions are well known to move in on UMP. The Government should resist all such efforts in the interests of the ultimate protection of the jobs involved.
Finally, I want to make a point about the banks. The Minister has referred to the conditionality attached to offers made so far by the banks. The banks should be called in now by the Government and told categorically that such conditionality is simply not acceptable. Whether they like it or not the banks have a social and national responsibility in this matter. Despite what the Minister has just told the House, we know from our experience that the banks will see no responsibility other than to their profits and their shareholders. Whatever pressure it takes now, the banks must be forced to take a measure of responsibility for the rescue which is essential.
The appointment of a receiver or liquidator to United Meat Packers Ltd. following the failure of the examiner's rescue attempts is an appalling prospect for the 900 full-time workers, 600 seasonal workers and thousands of suppliers. It will also be a tragedy for all the towns where the plants are located — Ballyhaunis, Ballaghaderreen, Sligo, Banagher, Camolin and Charleville — and the surrounding areas. There was a steady build-up of employment in the plant in Charleville, which is in the heart of the Golden Vale, and a number of young people were recently employed there. It is difficult to understand why this industry cannot be made viable. The Minister needs to look seriously at the entire industry at a time when jobs are so badly needed.
If the closure of United Meat Packers Limited goes ahead it will be a crippling blow particularly to Ballyhaunis and Ballaghaderreen where most of the jobs are located. It will take these towns years to recover from this blow, if indeed they ever recover. The closure of this company will mean that the amount of money coming into these areas will be greatly cut and every business and service will suffer, with the almost certain consequent loss of yet more jobs. Not one family will be unaffected by the closure. Many of the jobs will be lost in areas where there is no alternative employment. Even the traditional outlet of emigration has been greatly restricted by the recession in the UK. The only option for many people will be to emigrate when the opportunities again become available.
The loss of these jobs will be very considerable to the Exchequer. It has been estimated that the cost of every job lost is approximately £13,000 in terms of tax and PRSI foregone and extra social welfare payments. This would represent approximately £11.7 million for the 900 UMP workers. When the losses from the seasonal workers are taken into account the total would be approximately £15 million. Added to this will be indirect losses to the State in terms of lower VAT returns arising from the reduced purchasing power of people who will lose their jobs, extra health costs, supplementary payments and so on.
Last year the companies supported by the Industrial Development Authority created 12,439 jobs on a budget of approximately £140 million. On this basis the cost to the IDA of replacing the 900 full-time jobs alone would be over £10 million. The more one looks at the figures, the more inexplicable is the Government's failure to take any action on this matter. Given the scale of the potential job losses and social devastation, the reluctance is impossible to understand. The contrast between the way the Government are sitting on their hands in regard to the affair and their "no efforts spared" response to the Goodman crisis is startling. In August 1990 at the height of the summer recess the Dáil was recalled to deal with the Goodman crisis and emergency legislation was rushed through in two days. All UMP and their workers merit in Fianna Fail's order of priorities is a two and a half hour debate.
The Minister's indifference to this issue is astonishing. He played a major role in the Goodman development plan in 1987. On that occasion the Government were apparently prepared to commit more than £60 million in IDA and FEOGA supports, not to mention the organisation of section 84 loans of approximately £70 million, on a plan which, at its most optimistic, was supposed to create approximately 660 jobs. Yet on this occasion the same Minister seems unwilling to commit even a fraction of this money to save these 900 full-time and 600 seasonal jobs.
The banks must not be allowed to evade their responsibilities for this debacle. Once again they have shown a total absence of any sense of social responsibility. They are quick to dish out money and take their generous profits when times are good but when faced with the social devastation which the closure of UMP would cause they simply put down the shutters and locked the tills. This is not the first time the banks will have taken their pound of flesh at the expense of workers. The banks probably cannot be compelled to provide money if they are unwilling to do so but the Government can ensure that they pay a heavy price for their anti-social attitude through the imposition of extra taxes or levies.
Clearly, UMP's only hope of survival now rests on Government intervention of some sort. The scale of the potential job losses is so great that the Government must act. There is little point concentrating on meeting limited job creation targets if the Government sit back and allow actual jobs in an indigenous industry to disappear because of short term financial problems. There is also little point in establishing an elaborate jobs forum if jobs on this scale are allowed to go to the wall. The saving of these jobs must now be the absolute priority. When this is done the other questions can be addressed.
United Meat Packers have many questions to answer. They are one of the most secretive companies in the country and little reliable information is available about the extent of their indebtedness or the manner in which these debts were allowed to arise. Have the debts arisen through their Irish operations or through plants abroad? To what extent did the fire at Ballaghaderreen contribute to the disaster? The UMP disaster emphasises the urgent need for the more effective disclosure of company information. I appeal to the Minister to intervene in this important issue so that these jobs can be saved.
I wish to add my voice of concern in regard to the crisis that has occurred in United Meat Packers. The loss of employment will be a major blow to the whole country, particularly to the west. I visited the plant in Ballaghaderreen in mid-December 1991 and met Mr. Sean Clarke. I was very impressed with the factory, where there is a staff of over 250 people. That factory supply directly to the main supermarkets in Britain and to the major markets in Europe. I briefed the company on the potential of the opening of the Iranian market, in which I was directly involved as Minister with responsibility for trade and marketing at that time. I visited Tehran and had negotiations with the Government in relation to the opening of the beef market there. I felt confident that United Meat Packers, with their contacts throughout the Middle East, would be in a position to supply that market.
I opened that market in 1983.
I had to re-open this market.
The Deputy should not have been sacked.
Order, please. Every Deputy in the House has exactly ten minutes and should be afforded courtesy during that time. There should be no further interruptions.
I was very impressed by the standard of operation of the company in Ballaghaderreen. UMP invested in a major plant there, taking it over after the unfortunate failure of the Towey organisation which resulted in many farmers being deprived of payment for their stock.
Unfortunately, on 7 January 1992, a major fire engulfed the intervention stores at the United Meat Packers plant in Ballaghaderreen, a fire that most of us would consider impossible in an intervention store. In that fire, 35,000 tonnes of beef were lost. It seems from the Minister's statement that this fire sparked off the crisis in the company, or at least it brought it to a head. The company had to borrow £50 million to compensate for the loss, compensation which I presume will be forthcoming from the major insurance companies. Some of that money should be made available in advance of the full discussions and negotiations which are taking place.
The crisis in Ballaghaderreen, Ballyhaunis, Sligo, Camolin in Wexford, Banagher and Charleville is devastating to the economy, bearing in mind that United Meat Packers are responsible for 24.5 per cent of all sheep exports and approximately 15 per cent of beef exports and that in the next few weeks there will be a major increase in business in the lamb industry.
On 17 February last an examiner was appointed to this company in accordance with the Companies Act, 1990. As Minister of State at the Department of Industry and Commerce I was involved in that Act which provided for the rescue of the Goodman organisation who experienced problems far in excess of those being experienced by United Meat Packers. In the Goodman case, the examiner, Mr. Fitzpatrick, had to put together a package of £500 million. I regard the examiner's activities in this case as lacking. He has not operated the Act as it was passed by the Dáil. I accuse him of total negligence as far as his responsibilities are concerned.
He has not been given the go-ahead.
I fail to understand why he went to the court this morning to appoint a receiver——
The Deputy has to blame somebody.
——which will allow the Banque Nationale de Paris to move in and claim their assets if they so wish. By calling in a receiver this company and their potential suppliers are not being given much credibility. Why did the examiner not read the Act passed by this House and implement it as he is entitled to do? Why did he not bring together all the creditors involved?
To what section of the Act is the Minister referring?
I would be able to inform the Deputy of every section in this Act because I brought it through the House.
The Deputy should inform the Minister.
I would like to see the Minister for Industry and Commerce becoming involved in this issue which is of the gravest concern because it seriously affects the whole country. Under section 3 of the Companies Act a receiver can be appointed by the courts as an examiner. I fail to understand why the High Court judge would allow Mr. Guilfoyle to walk away from his responsibilities under this Act to rescue the company.
The Government do not think so.
The section dealing with the appointment of the examiner outlines the position. Was a meeting called of the creditors of this company, including Banque Nationale de Paris, as provided for under section 21 of this Act? The suppliers are at a loss of £1.5 million and are unsure about the undertakings given by Mr. Guilfoyle. Mr. Guilfoyle has walked away from his responsibilities to the suppliers. The company should appeal again to the courts for the appointment of an examiner, otherwise the Banque Nationale de Paris will move in quickly. I am confident about the company's viability.
In 1990, when the Commissioner rang a Dutch bank, the Opposition criticised him and when we assisted in the appointment of an examiner to the Goodman Group we were criticised. I compliment the work of the Minister for Agriculture and Food, the Minister for Finance and the Taoiseach, who have been deeply involved in the efforts made over the last seven days in regard to United Meat Packers. These people have been let down by the examiner who has walked away from the problem. The IDA and the Minister for Industry and Commerce should take whatever action is necessary and the State should make whatever investment is required to rescue this company. This is a national crisis and I appeal to all concerned to act in a responsible way to ensure that the company are rescued.
The Deputy should go in haste and petition the court.
He will have no chance of a nomination after that speech.
I call Deputy Jim Higgins. I want no further interruptions in the House.
We have had five somersaults in three minutes.
This is a very important debate and I would appreciate if Deputies would approach it in a responsible way.
The House has just been treated to a most pitiful and pathetic attempt to move the goal posts. To blame the Examiner is most unfair. All that the Examiner wanted was the money to discharge the remit vested in him by the high court three weeks ago. The remit was renewed last Monday and the termination date was not until next Monday. All that the Examiner wanted was one phone call from the Minister for Finance, Deputy Bertie Ahern, the Minister for Agriculture and Food, Deputy Walsh, or the Taoiseach.
The Deputy is wrong.
In that situation a promise of £4 million would have secured the jobs. That is all the Examiner needed. All that the Examiner needed was a fraction of the £33 million paid for the 15 per cent of the Government's shares in Greencore which we sold last week. What a patriotic gesture that would have been. One eighth of that £33 million would have saved United Meat Packers Ltd. and 900 jobs.
I come from a part of the country that the Taoiseach knows well——
——and he will get to know it better. That part of the country is wracked by unemployment, is ravaged by emigration and has suffered a massive downward spiral of population since the foundation of the State. I come from an area known as the "black triangle" in terms of unemployment and emigration. We have never got our fair share of national resources. In my county, it is said that one buys three suits in one's life — three suits for the three "ations", confirmation, graduation and emigration.
The House can imagine the jubiliation in my part of the country when, 18 years ago, Mr. Sher Rafique, came from his native Pakistan to Ballyhaunis, purchased a small meat plant and built up a £300 million export industry by hard graft, by the sweat of his brow, and with minimum State assistance. The company developed to the stage that it now employs 900 full time and 600 part time employees and generates sufficient business for numerous small subsidiary industries, each one of which will go to the wall with this enterprise. Mr. Rafique's enterprise gave growth, jobs and hope where before there was nothing but despair. Mr. Rafique carved out markets in the Middle East with the Muslim communities, markets that no one else could have got. He went out on his own — not courtesy of any State agency nor assisted, aided or abetted by a State agency — and negotiated his own markets. He negotiated markets for every possible grade of animal and built up a reputation that has resulted in his now being the second largest meat operator here. Mr. Rafique built up the markets to such an extent that when he negotiated a major market in Iraq back in 1988 and looked for what was his share — the export credit refund — to protect his investment he received a telephone call from the former Minister for Finance, now the Taoiseach, telling him that it was all a mistake——
He did not.
——because somebody's share of the cake had been taken——
The Deputy should tell the truth while he is at it.
One of the Taoiseach's colleagues——
Tell the truth, please.
It was because someone went to the Taoiseach's office, banged the table and said export credit refunds were being given to a competitor.
We will be dealing with that in the next few weeks.
The decision by the Government to go through the motions of trying to save the enterprise and the jobs involved is nothing more than a pathetic, cruel farce.
I listened to the Minister, Deputy Walsh, in the House earlier this week when he gave grounds for optimism. He was very optimistic that the plants could be salvaged and the jobs saved. I listened to him today, after the Receiver had gone in, and he was equally optimistic that the jobs can be saved. The jobs will be saved in a skeleton fashion in one or two of the plants, possibly in the south, but God help the west of Ireland. The Minister is still optimistic, smiling as the ship goes down. The receivership is now on, the vultures will move in, the company will be dismantled and the jobs will go to the wall. I hope, as Deputy Deasy said, that the appeal to the Supreme Court will be successful.
On 28 August 1990 this House, and its sister House, the Seanad, were recalled. Emergency sittings were held; a section of the Companies Bill which was going through the House, was plucked out; an Examiner was appointed, and a £500 million rescue package was put in place to save the Goodman empire. I wish to make it perfectly clear that I have nothing against Larry Goodman or his empire. In the putting together of that salvage operation the Government played a key, instrumental role by helping to assist the process along the way. What a marked contrast there is between that operation and what happened in the past few days.
Last night I listened to the Minister for Agriculture and Food say on the 9 o'clock television news that the Receiver would go in this morning. There was no need for the Receiver to go in this morning, tomorrow morning, the next morning or the next morning. The Examiner had until next Monday to put together a rescue package. The will was not there and where there is a will there is a way. I make the point that United Meat Packers Ltd. have less than one-twelfth of the debts of the Goodman group — I know what their debts are — and they employ half as many people, but neither the Government nor the banks would lift a finger to enable the Examiner to discharge his functions in completing the examination. That makes a farce of the Companies Act. Never again can an Examiner be called in, because one does not know when or at what stage the plug will be pulled by one or other of the banks. As a result, and I am convinced of this, of a combined conspiracy——
That is scandalous.
——not only of indifference but also of scarcely veiled hostility, which I recognise when talking to the Taoiseach's Members and some of his Ministers——
What would the Taoiseach call it?
——a perfectly viable industry, which is making a profit in its plants, which has run into a minor cash-flow problem, has a normal overdraft for a multimillion pound international company——
If the Deputy knows the debt he could tell us, because they will not tell us what it is.
——which employs 900 people——
Nonsense, this is scandalous.
——is now going to go to the wall. Furthermore, I ask the Taoiseach why the Government did not call in the IDA, the ICC——
What about equity shares?
——the ACC or ICOS. There is a sum of £4 million at stake. The Government got rid of Fóir Teoranta, a company who helped to salvage the Taoiseach's industries as well as other industries.
And Peter Barry's, remember. Put that on the record now.
The pitch has been well and truly cleared.
And Peter Barry's.
The Taoiseach is getting rattled.
There is another hidden agenda and the Taoiseach knows what it is. The banks know it.
Tell the truth; we want the facts.
Taoiseach, we listened to your contribution but, as I said, you have been nothing other than childish, churlish and malevolent.
His predecessor was never like that.
I ask the Deputy to address the Chair.
I shall stand for the truth, not half truths.
Is that a criticism of the Taoiseach's predecessor?
Through the Chair, I wish to say that there is another hidden agenda. The banks have proved to be their most ruthless, selfish selves once again. They will use any instrument at their disposal to get their way. In this instance they have used the people and people's livelihoods. They are the classic institutionalised asset strippers, and that is part of the hidden agenda. The agenda of the domestic banks, Allied Irish Banks and the Bank of Ireland, was to saddle Banque Nationale de Paris (Ireland) with such a debt that they would be gone from St. Stephen's Green and would pull out of Ireland so that they would have their own little cartel to exploit customers.
What economic lunacy, that as and from today the Government must provide £80,000 per week in unemployment assistance — ironically enough, £4 million per annum, exactly what the Examiner needed — to pay the dole for those 900 people. How transparent is the Government action, that the very week they propose to establish a jobs committee they should knowingly, deliberately, sell the livelihoods of 1,500 people. I see the Taoiseach laughing——
I am not laughing at the Deputy, he is a pitiful sight.
We are talking about 1,500 people and their livelihoods. What is the Taoiseach laughing at?
The Deputy is a pitiful sight.
I am saying to the Taoiseach never to talk about jobs or a jobs forum if he allows this closure to go ahead.
The Deputy is a pitiful sight.
The Deputy must conclude.
I say to the Taoiseach, as a western representative, his performance in relation to defending the west, his country and western alliance, his so-called allegiance, his grassroots loyalty have been found wanting, after only two or three weeks in office.
Give us the financial facts.
The people opposite are those who are supposed to have them.
Wexford): May I have permission to share my time with the good western Deputy, Deputy O'Toole?
Is that agreed? Agreed.
(Wexford): The United Meat Packers group were the second largest meat processing operation in the country, having some five export-approved plants, slaughtering cattle and sheep at Ballyhaunis, Charleville, Ballaghaderreen, Sligo and Camolin, County Wexford. It is widely accepted that over the years this group played a major role in the lamb and beef processing sectors. What we should be talking about today is protecting people's jobs. Certainly I hope we will not have to pay social welfare to those workers. I hope that when the receiver takes over he will be in a position to save all those jobs and acquire new companies to take over.
I might compliment Deputy Deasy in having made a very good, well thought-out contribution, without engaging in any hysterics. Deputy Jim Higgins spoke about not calling in the different organisations and financial institutions. To date the Government and the Minister for Agriculture and Food have met the ICC, ACC, and IDA and the ICOS. I understand also that the Taoiseach himself had discussions today with the chiefs of the ICOS who offered the full support of their members in playing their part in restructuring the beef and sheep industry, whether under a joint venture or some other arrangement. Therefore, it is totally untrue to say that this Government have not been in direct contact with the different financial institutions and cooperatives and or their unbrella organisations.
What the Opposition should bear in mind is that while the banks felt that the Goodman group were viable, the present operation of United Meat Packers group is not viable. That is the difference. The banks felt they could not become involved. Therefore, we should base our remarks on that premise.
The Camolin meat plant in County Wexford is in my constituency. I want to put on the record of the House that over the past week I have been in close contact with the Camolin plant, with the IDA and different financial institutions to ensure that that modern plant, with tremendous facilities, supplying lamb to the French market, is maintained. Under any restructuring or possible take over of that plant I would foresee tremendous potential for its expansion, leading to increased numbers of jobs. It is important that there be competition within the industry. I am concerned particularly about the Camolin plant and the important role it plays in servicing Wexford sheep producers. I am also concerned that the market built up by United Meat Packers group should not be lost. I will be making every effort to ensure continuity of processing at Camolin so that these markets will be maintained. Competition within the meat industry, as in all other sectors, is vital. Therefore, I will be anxious to ensure continued active competition for livestock in County Wexford.
It is important to place on the record of this House that the Ministers for Agriculture and Food and Finance and the Taoiseach made every possible effort to ensure that the United Meat Packers group would survive. When the receiver takes over I have no doubt he will make every effort to ensure this. I am aware also that the Minister for Agriculture and Food has immediate plans to meet the receiver, with the food division of the IDA, to ensure that no stone is left unturned in ensuring that these plants continue as viable operations. As junior Minister in the Department of Agriculture and Food I will be making every effort to ensure that the Camolin plant survives.
I join with previous speakers in pleading that everything possible be done to ensure the continuance of this plant. United Meat Packers Limited have enjoyed maximum investment on the part of the State and banks to date, their location in a disadvantaged area constituting one reason for their receiving the maximum grant. The plant was the best and most modern nationwide. Their standard enabled them to compete abroad by way of FEOGA grants. The group are in the unique position of having the best markets in the United Kingdom, Spain and the Eastern bloc, placing them in a very healthy position. I very much regret — as Deputy Jim Higgins said — that they are now embarrassed by having a minimum cash flow. I am not so naive as to make a statement here without knowing the relevant facts. The overall position is much more serious than that and warrants a positive approach on the part of the relevant Ministers. Indeed, I have been engaged in negotiations over the past few days with the Minister for Agriculture and Food and the Minister for Finance and I compliment them both on the way they gave of their time so unselfishly to arrive at a solution to this problem.
At present in the west the maximum number of sheep and cattle are coming on stream. It is too serious for Deputy Jim Higgins, or indeed anybody else, to blow a fuse here——
Deputy Jim Higgins did not blow any fuse at the closure of the factory in Castlebar in west Mayo; he did not blow any fuse on that occasion.
You people closed Claremorris and Castlebar.
He is jumping about the House now as though there was no other plant in the country.
Deputy O'Toole is like a political paralytic.
It would be more productive for Deputy Jim Higgins to sit down with the Ministers for Finance and Agriculture and Food and myself this evening——
I spoke with the Minister while Deputy O'Toole was revelling at the Ard-Fheis.
I suggest that Deputy O'Toole address the Chair. I would ask other Deputies to refrain from interrupting.
Many speakers have referred to the 900 workers involved but I would remind Members that there are many farmers and their livelihoods involved.
What is the Deputy doing about them?
It would be preferable if Deputy Jim Higgins and other western Deputies — I know some are willing to do so — would sit down with us this evening in an endeavour to adopt a positive approach to this problem, rather than have the British press talk about us again — another Goodman affair, another meat factory gone to the wall. That is not the type of propaganda western farmers want. They want us to do something positive on their behalf immediately. That is why I am asking Deputies opposite to join with Deputies from west Mayo on this side of the House in an endeavour to bring about a positive solution to this serious problem.
There are many farmers gravely worried today. The plant in question is located in close proximity to my home, a place to which many farmers in Sligo, Mayo and Galway bring their stock. An alternative proposition must be advanced immediately. Whether or not the receiver will have been appointed, that constitutes the bottom line. I call on the Minister for Agriculture and Food to convene a meeting with western Deputies this evening. I have no doubt that he will do so and that it will be more productive than our discussion here this morning.
I should like to begin by quoting some remarks reported in the press of the former Minister for Agriculture and Food, Deputy Woods, following the disastrous fire at the UMP plant as follows:
I will give every support I can in that and in saying it I want to assure people that this is not just idle talk. I mean response on the hour, by the hour.
I am sorry to interrupt the Deputy, but is he sharing time?
I am. I am sharing my time with Deputy Creed.
I was quoting from what Deputy Michael Woods said after the fire in the UMP plant:
"It's the spirit of the people that matters at the end of the day", he said "If you can get the support of the state agencies, you can come back and look on it as a tragedy overcome. We do everything to assist".
Deputy Woods said that, as Minister for Agriculture and Food, on the site at Ballaghaderreen on 9 February after the disastrous fire in United Meat Packers. Is there not a wide gap between that statement and the action of the Government and Government Ministers when they were really called upon to assist? They did not assist. Deputies should note the laden hyprocrisy of that statement when judged against the action when the time came to really assist.
I am delighted that the Taoiseach is here to see me paint some of the picture in the area most affected by this tragedy. The Taoiseach may know a little about it as he is a Deputy for the constituency. The Ballaghaderreen-Ballyhaunis hinterland in the five-year period from 1986 to 1991 lost about 8 per cent of its total population, when the population of the State remained stable. That was way above the national averge and way above both the county averages. Most of the people who left were aged between 18 and 25. They left because there was no work. The profile of the workforce in that area shows that 52 per cent of all people employed work on the land. That is three times or almost four times above the national average of the workforce on the land. Oddly enough, in that area, up to 20 per cent of the people who work in manufacturing industry work in the food industry, and the mainstay of the food industry was UMP. Now we see this whole operation put in jeopardy, faced with liquidation. Is the Taoiseach, as a representative of the area, willing to allow that to happen to 52 per cent of the workforce on the farms and then up to 20 per cent of the workforce in the food industry? Does the Taoiseach support that? I hope the Taoiseach intends to respond to this debate and will make some points about it.
There is no doubt that this company can be saved and that it should be saved. Even at this late stage the Government State agencies could be brought into play to help the company — the kind of thing that the Minister, Deputy Woods, talked about after the fire. Why are those statements not being made today? I appeal to the Taoiseach to see this as something on his own doorstep, to be guided by the principle — and it is not narrow or parochial — that charity begins at home. Charity and help is surely deserved and needed at this critical hour for that area. The Taoiseach should contact the State agencies and use the influence of his office to ensure that those companies do not die.
And then be accused by you tomorrow for it. Such hyprocrisy.
The Taoiseach has some experience of this industry.
The Taoiseach has some experience, it has been stated, of financial difficulty in his company. There is nothing wrong with that.
There is nothing wrong with it.
We also hope, because in the past the Taoiseach has been no lover of United Meat Packers——
That is wrong.
The Taoiseach was not fair to them.
That is incorrect and untrue.
You were unfair to them.
That is pure Fine Gael propaganda.
It is not.
You were unfair to them——
The Deputies will cease.
——in the giving out of export insurance. Mr. Sher Rafique put it on the record that the Taoiseach was unfair to them and the Taoiseach never responded adequately.
Do not tell lies in this House, please.
It is not really important now.
Do not tell lies in the House.
It is important——
There is a lot more to come out. I will have it for you in a minute.
I hope that the prejudice the Taoiseach showed against that company is gone today and that the Taoiseach's response to this tragedy or to this looming tragedy will be fair and straight and that the Taoiseach will ensure that the State agencies and the influence of his office will be brought to bear to save it. There is so much more I would like to say but I wish to yield to my colleague, Deputy Creed.
I thank my colleague for sharing his time with me. This crisis is the first real test for the new administration and unfortunately they have failed miserably in it. It gives me no great joy to say this especially as the Minister for Agriculture and Food, Deputy Joe Walsh is part and parcel of that failure. Today 900 people are facing the bleak prospect of life on the dole and a further 600 part-time seasonal employees face the same future. It is ironic at a time when this House is contemplating the establishment of a jobs forum that 1,500 jobs are being thrown away for the sake of £4 million. A simple mathematical exercise for the Government would show that the cost to the State of maintaining these jobsvis-á-vis the cost of paying dole to these people for a twelve month period is exactly the same.
It is surely ridiculous to have a State agency like the IDA working to create new industrial jobs while the Government sits idly by and allows 1,500 jobs to disappear for the want of £4 million. At the Beef Tribunal recently it emerged that the cost of one job in the beef industry is approximately £35,000. Therefore, in the context of UMP it will cost the State between £32 million and £53 million to restore those workers to full employment in the beef industry. All of this could now be saved for a mere £4 million investment to enable this company to trade out if its difficulties.
Over the past number of months I have been concerned by the excessive control which the financial institutions have over the beef industry here. They effectively control 70 per cent of the trade. This is bad for the industry, bad for the farmers and now bad for the employees of UMP. Indeed, I have been seeking to raise this matter in the Dáil in Adjournment Debates on a number of occasions. It is ironic that the control of the beef industry was deemed by the Minister for Agriculture and Food not to come within the ambit of his Department, and adjournment debates on it were also refused by the Minister for Industry and Commerce. The reality is that inter-bank wrangling and a desire to squeeze out the Banque Nationale de Paris has given rise to this debacle. The Government's failure to resolve this bank war is in stark contrast to the application of their ability and energies to coerce 33 different banks into providing £550 million to the Goodman Group. This clearly suggests political and commercial intrigue at the highest levels, the net result being a Goodman monopoly and the loss of 900 jobs. I do not believe the protestations from the opposite benches that those two matters are not related.
I will turn now to the local issue, the Charleville plant. The Minister in his address said that he hoped that the western plants would remain open. I would remind the Minister of what he said when elevated to high office. The Minister said that he felt that he had a particular responsibility to the Cork region. Are the jobs in the Charleville plant, the 120 full-time and 80 part-time jobs secure? I regret that the Minister in his address personalised his attack. That is not what we have come to expect from the Minister. If the Minister wants to fight fire with fire I will fight back. The reality is that the Minister was so closely associated with the Goodman food package in his time as a junior Minister in the Department that he fell out with his senior Minister at the time. The Minister was so adamant that that programme should proceed regardless of cost to the taxpayer that there is now a serious question mark hanging over the Minister's commitment to the UMP group.
Tell the truth.
That is the truth and the Minister knows it. He fell out with his own Minister over it.
You are incapable of telling the truth.
Tell the truth.
That is the truth.
Did you seek to drop the performance clause in the IDA proposal?
Are you capable of telling the truth?
You have no commitment to the UMP. You are so closely aligned with the Goodman group that you cannot get away fom it.
Why do you not tell the truth? You are a liar.
How dare you.
That should be withdrawn by the Minister. It is unacceptable behaviour in this House.
That remark will have to be withdrawn. How dare the Minister; he is the first Minister I have ever heard say that.
The Chair must insist that the Minister withdraw that remark.
I ask the Chair to address the Minister and give him the opportunity to withdraw that remark.
The Minister must withdraw that remark.
The Minister should be asked to withdraw that remark. It was most unfair. I ask you, Sir, to address the Minister.
Will the Deputy permit me to reply? Minister, I think the word "liar" should be withdrawn and some more parliamentary language used in its place.
He said I was a liar and that has to be withdrawn.
I was accused of personalising this debate, but I did not mention one Deputy.
The Minister referred to me inThe Cork Examiner.
I did not mention one Deputy but I did say that Deputy Creed came in here telling untruths, I stand over that and I have no notion of withdrawing that.
Untruths, I accept that.
That is not my understanding. I am not as familiar with procedure as some other Deputies but it is my understanding that such unparliamentary behaviour is not acceptable and its not the norm and I am insisting the Minister withdraw that remark.
There has been much misbehaviour here this morning and I have no intention of permitting it in future. I call Deputy Morley.
I am insisting that the Minister withdraw that remark. This debate should not proceed until that remark is withdrawn
The Minister withdrew the word and used the word "untruths".
He did not withdraw it.
He did not withdraw it and I am insisting that it be withdrawn.
Nobody should be allowed to call a Deputy a liar.
The Chair must interpret what is said in this House.
The Chair must protect the Members.
Will Deputy Creed please resume his seat?
I will when the Chair begins to protect the Members of this House. I will not have myself labelled a liar by the Minister, Deputy Walsh.
Will the Deputy please show respect for the Chair.
I am insisting that the Minister withdraws that remark.
The Minister withdrew that word.
He did not.
I understood from the Minister that he was using the word "untruth".
On a point of order, if the Minister referred to Deputy Creed as a liar and has not withdrawn that remark it is your responsibility in the Chair to see that he does so.
First, may I have order? I asked the Minister to withdraw that very word. I understood — and I must interpret what the Minister said — that he withdrew that word and used the word "untruth".
Sir, by the widest stretch of the imagination you could not assume that.
May the Chair give a ruling on it? I accept that the Minister has withdrawn it and used the word "untruth".
That is different.
The Minister agrees that my interpretation is correct.
The Minister has not put on the record that he has withdrawn the word liar.
The Minister must do that, Sir, because the word liar is on the record.
He should withdraw the word liar.
Sir, I have no difficulty in putting on the record that Deputy Creed came in here and told untruths. If the word "liar" gives some offence to him I have no difficulty in withdrawing it.
It took the Minister long enough.
Tell the truth; it is most unbecoming of Deputy Creed.
I welcome the opportunity of voicing my concern about the crux into which the company have fallen. When I was first elected to the Dáil this company were in their infancy. Mr. Sher Rafique had been in Ballyhaunis for only a couple of years. He had taken over a slaughter house and commenced operations in it. The company grew under his leadership and expanded. The enterprise and initiative of the owner were fully vindicated in the following years. HalAl, as the company were then called, were responsible for creating a market for a type of lamb for which there had not been a market previously. He cultivated that market and this, of course, was to the advantage of the hill sheep farmers in Mayo and neighbouring counties. I regret that after enjoying wonderful success the company have now fallen into overwhelming difficulties.
The demise of this company will have very serious implications for the communities in Mayo and other parts of the country. It is not easy to attract industry to the west and it is very sad that an industry which was viable up to now and provided very valuable employment is faced with the prospect of going to the wall. This appalling prospect will have very serious implications not just for the people who are directly employed by the company but their families and the community in which they live. Everybody appreciates the ramifications which the loss of employment for such a large number will have on the whole community.
Approximately 600 people from east Mayo and Roscommon and 300-400 people in other parts of the country are affected. It will have implications for the farmers who have delivered their produce to the factory over the past 17 to 18 years. We all realise this but shedding tears will not help the company.
I have been listening to the debate so far and to what was said on national and local radio. I have read the print media since the crisis began. It appears that the Opposition are doing their best to make a political football out of this crisis. I accept what Deputy Deasy said, that he had no intention of making this issue a political football. I have always found Deputy Deasy to be fair and objective and, indeed, he was that this morning. I regret I cannot say the same about my constituency colleague, Deputy Jim Higgins. I have been listening to his statements on local radio since the crisis began and it is clear he is more interested in scoring political points than in finding a solution to the difficulties that threaten to overwhelm this company, and threaten the employment prospects of those who work there. It is clear from his statements that this is the case. For instance, he compared this to the Goodman crisis. There is no comparison between the Goodman crisis and this one except that the legislation which was put in place during the Goodman crisis is being used to assist the company in the appointment of an Examiner. The Government made no grants directly to Goodman, just as they have not done so in this case. I was delighted to hear the Minister refute the suggestion that favouritism was shown to Goodman which was not available to UMP.
The Taoiseach made an inadequate disclaimer a moment ago.
The Dáil was recalled to put legislation in place that would help the company. It was successful because the company and their bankers successfully concluded their negotiations. The same machinery is in place in this case but, unfortunately, the bankers and the company could not bring the negotiations to a successful conclusion.
Deputy Higgins is claiming that only £4 million is at stake. That is an insult to the people concerned, to anybody who is listening to him and, especially, to the people of east Mayo because everybody knows — even the dogs on the street — that much more than £4 million is involved. I do not think the final figure has yet been determined. On "Morning Ireland" the Deputy endeavoured to bring the Carysfort issue into the discussion, although it obviously has nothing to do with the present problem. Clearly he is attempting to make a political football of this issue at every opportunity. In this House he descended to a personal low and I have no intention of following him. The jobs and the people concerned are far more important than scoring political points. The Deputy mentioned the closure of Claremorris. It was closed because it was owned by a private company and subsequently sold to another private company. It was not in difficulties when it closed and the Government were not responsible.
I am not interested in playing politics with the livelihoods of the employees of this company. I am not interested in a short term solution which the provision of £4 million would bring about. I am interested in a long term solution to safeguard jobs within the company in its various plants. I am not letting the Government off the hook in this matter. I was heartened to hear the Minister say yesterday that he had been in consultation with the IDA on the issue and that he would be in immediate consultation with any receiver appointed. The first phase of the battle was not successful but if the company go into receivership we will be entering the second phase of the battle. There will be ample opportunity for Government intervention at that time. I expect, Government intervention or not, that the company and their plants will be kept in business and that the employees will be retained. It is difficult to provide new employment in the west. What we have we must hold. The people expect and deserve that.
I will be as brief as I can because I understand that other Deputies want to contribute. I will not utilise the full time allowed to me because it is important that Deputies who are concerned with the food industry in general, and those who have a constituency concern with regard to United Meat Packers, should be able to put a few brief remarks on the record. It is interesting that this debate takes place in the shadow of an unemployment crisis, when detailed discussions are ongoing in relation to establishing a consensus on the creation of jobs. It is our national priority.
It is not without a great deal of sadness that we are faced with the huge threat to 900 jobs. Each of these plants is in an isolated rural area which is extremely deprived. In truth, many of them have no possible source of employment other than in the plants which are so desperately threatened. In my constituency, north Wexford has been particularly badly hit in recent years. The UMP plant at Camolin is in a vast rural area without any alternative industrial employment. A staggering 24 per cent of the north Wexford workforce are unemployed. It is with desperation that the workers at that plant face the dawn of tomorrow and the expectation that the company they have worked for since 1987 will no longer be in existence.
It is a matter of great concern not only for the workers and their families but also for the farmers who supply that plant. The Camolin plant is exclusively concerned with the killing of sheep and since 1987 it has developed a most successful and lucrative export market in sheep-meat, particularly in France, gaining a premium price for producers in the north Wexford area and the whole south-east. The use of the plant has increased sixfold since 1987. The blow is not confined to the workers and their immediate families but will be extended throughout the farming community. It is a problem which must be addressed with great urgency.
The meat processing industry has caused concern for a number of years. Over two years ago the Leader of the Labour Party voiced his concern and called for a fundamental review of the whole meat producing industry. That review must be carried out. We have a new Minister for Agriculture and Food who is not long in that post. He commands respect on all sides of this House and he would not have wished to start his career with this difficulty on his plate. However, it might spur him into taking action which he might not otherwise have taken in looking at the operations of the meat processing industry, the monopolies we have allowed to exist and how they operate in relation to pricing the product and the operating of their plants. I call for a fundamental look not only at this company but at all the meat processing companies to ensure that they can provide sustainable employment for those who want to work there. The Minister and the Government must act now to address that problem.
We have long said in our county that Wexford produces the finest raw materials. We produce milk, meat and soft fruit and most of it goes beyond our county for re-processing and value-added. Although we produce the raw material, other places get the dividend in terms of jobs. We have one or two successful processing operations in the county and we are determined to hold on to them. The sheep processing at Camolin must be safeguarded. I understand that the decision of the High Court is to be appealed to the Supreme Court by the company. I request the Minister as a matter of absolute urgency to ensure, if it is not possible for UMP to continue in operation on the existing scale — and I remain to be convinced of that — that an alternative is immediately put in place so that there is no disruption in employment for the workers who are producing a premium product for which there is a ready market.
I understand the liabilities of this company are in the region of £54 million and that assets total £62 million. The total workforce is in the region of 1,500, one-third of whom are employed on a part-time basis and two-thirds on a full time basis. The company has a turnover of £250 million which takes care of 20 per cent of the total beef and lamb trade of this country. The major difference between United Meat Packers Limited and other factories is that most of the produce is sold on the open market in England and in Europe, unlike other factories who put most of their produce into intervention.
I understand a receiver will be put in place and that a percentage of the moneys owed to creditors will be paid. Does that mean that the farming creditors will merely receive a percentage of what is owed to them on apro rata basis or will a special case be made for the farmers who are owed in the region of £1.5 million to £1.75 million.
I should like to ask the Minister why so many of our meat processing plants get into financial difficulties? Is it because of poor profitability levels in the meat business, or poor management or a combination of various factors? Whatever it is, we appear to be hit by very poor performances in the meat trade over the last number of years.
On a national basis 15.5 per cent of our workforce is engaged in farming plus another 16.5 per cent in agri-related industries, totalling 32 per cent. In the west, because of the lack of industry, 42 to 43 per cent of the total workforce will be directly concerned with the possible closure of any factories, but farmers from the neighbouring counties of Roscommon, Sligo, Leitrim, Mayo and Galway would be most concerned at the possibility of any threatened closure.
I should say I was dismayed at the comments of the usually very solid Minister of State, Deputy John Browne, when he expressed the wish that Camolin factory would survive. He referred to that on a few occasions without mentioning any of the others, perhaps it was an oversight on his part.
Is geal leis an bhfiach dubh a ghearrach féin.
When I became aware last week that the examiner to United Meat Packers was having difficulty in raising necessary finance, I took an immediate interest in the situation. It was presented to me that the problem had arisen because the major creditor, Banque Nationale de Paris, was unwilling to provide any more support unless there was a contribution forthcoming from the Irish banks.
I was in contact with the President of Banque Nationale de Paris and I suggested to him that the Bank might see its way to facilitate the Examiner in view of the potential loss of employment and loss of a business that has strong long term prospects. At the same time my Department was in constant contact with the main Irish banks in an effort to persuade them to come to the assistance of the Examiner.
As a consequence of these efforts, the two main Irish banks, Bank of Ireland and AIB, and Banque Nationale de Paris did come together with the Examiner with a view to finding a solution acceptable to all parties. It appeared for some time that a solution was well within reach and there was really no problem about finding £4 million as such. The essential point was that the Irish banks were not prepared to become involved, beyond assisting the Examiner on a purely temporary basis, because they saw no long term future for the company due to the large burden of debt. I want to emphasise this point because the general impression conveyed to the public was that 900 jobs were at stake due to a failure to advance the small sum of £4 million. This is a misrepresentation of the situation. The issue was about the main banker refusing to go further, without involvement from the Irish banks, while they refused to become involved until the question of a large burden of debt could be dealt with to their satisfaction.
I should add, a Leas-Cheann Comhairle, that the exact amount of the very large burden of debt is in some dispute: figures range from £25 million. In a letter which transpired yesterday Banque Nationale de Paris were calling in their various debts of £41 million, other figures suggest that the burden of debt is £56 million, and other figures suggest it could be much more because of the very severe financial difficulties. The precise figure is not known by any of the parties I have met. During the past week I have had discussions with the insurers, the Irish banks, and Banque Nationale de Paris through the senior officials in the Department of Finance. Also, I have had numerous conversations with senior members of management. The burden of debt ranges from £25 million to £50 million.
Thus an impasse was created and it gradually emerged that neither party would concede. There is no merit now in dwelling on the rights and wrongs of the arguments advanced by each side. The Examiner went as far as he possibly could to find a middle ground and I would like to take this opportunity to acknowledge his efforts over the last week. He succeeded in obtaining a time extension from the courts when it appeared that a successful outcome was in sight but, in the event, this did not materialise.
There has been considerable criticism of the Government on the argument that it was not active enough in finding a solution. First of all, let me make it quite clear that it would have served no useful purpose at all, if the Government had somehow produced £4 million. The essential problem — lack of co-operation between the banks and a continuing overhang of debt — would remain. While the Government could and did everything reasonably possible to persuade the banks to resolve the matter, it could not order or direct the banks to take any particular line of action. This would be in blatant contravention of the normal rules and the Government would no doubt be severely criticised. While it may have appeared to the public that the banks were taking a very negative line, I want to put it on record, from my knowledge of events, that at all times the banks were genuinely conscious of their community obligations and were anxious to find a workable solution.
The criticism has been levelled at Government that, while it showed great energy in the Goodman situation, they could not find a paltry £4 million to keep UMP afloat. This criticism is, at best, a misunderstanding of the two cases and, at worst, it is mischievous to say the least. There is no comparison. In the Goodman case all the banks were already committed heavily to the company and they asked the Government to provide a legislative vehicle through which an ordered arrangement could be put in place. This was done promptly but there was no Government finance involved. In the UMP situation, however, the fundamental problem is that those banks not already committed do not want to be committed until the problem of existing debt can be resolved.
All these banks are treasurers of the company.
By yesterday afternoon it had become finally clear that there was no further prospect of continuing the examinership. There was no possibility at all that the banks could reach agreement. The Government were monitoring the situation very closely and the Government's principal concern was to ensure that a disagreement between banks, however justified, would not lead to large scale loss of employment. It would be a totally unacceptable outcome if the consequence of failure of the examinership was immediate and substantial loss of employment.
On the instructions of Government I had a meeting this morning with top executives from AIB and Bank of Ireland. I did not have to impress upon them the urgency of the situation and the obligation on them to act in the national interest in protecting a vital industry and protecting major employment. I am glad to be able to say that both banks responded in a very positive way. They made it clear to me that, in their opinion, receivership is the best option if the future of the industry is to be assured. Of greater significance, however, is their willingness to act immediately and constructively with the Receiver in providing working capital for an immediate resumption of activity and in providing, where appropriate, necessary financial support for potential purchasers of individual plants. They consider that there is a viable industry which has sound future prospects and they want to be part of this. In particular, I got an assurance from them that they are ready to support, with the co-operation of the Receiver, the immediate continuation of operations in the west of Ireland. This is very good news.
What about Charleville?
I trust that all parties will work towards this objective without further delay.
That is savage.
I am confident that the company itself and BNP, the main creditor, will also respond in a positive manner so that jobs can be protected and that the industry can be restructured effectively. UMP have made a big contribution to the development of the Irish meat industry during the past ten years. Of particular significance is the contribution which they have made in the west. It would be a great tragedy if this had to be undone because of financial failures and if a potentially viable business was allowed to fold up.
The examinership has been terminated this morning and a Receiver has been appointed. I understand that he is on the way already and is due to land at Knock airport about now. While the first duty of the Receiver must be the interests of the creditor I am sure that both he and BNP will be anxious to minimise disruption of production. In any event, the best prospect for sale of assets, if this approach is being followed, is to keep the operation as a going concern. I am sure the Irish banks will follow through the assurances which they gave to me this morning and that adequate working capital will be available to the Receiver. The Government will follow developments closely and will be positive in every way they can in assisting the continuation of employment given the major number of jobs involved.
It is unfortunate that a situation should have evolved where disagreement between banks on overall strategy should threaten immediate closure of one of our vital industries. I believe, however, that in the event we have found a satisfactory outcome and I am confident that the plants will continue in operation.
I wish to share my time with Deputy Kenny.
Is that agreed? Agreed.
It appears since the debate began today that the only thing that Fianna Fáil Ministers want to do is try to show that Goodman International and United Meat Packers were treated in the same way. That appears to be the only underlying message today. I should say to the Minister, Deputy Walsh, that he is not new to this given that he was Minister for Food for five years. I want to put three questions to him and I hope he will answer them when he comes to address the Assembly in a few minutes.
On the occasion of the famous launch with Larry Goodman — the famous day of the musical chairs — when half the Cabinet sat with Larry Goodman and his associates, the Minister and the then Taoiseach committed the taxpayer to the payment of £25 million provided Goodman International did X, Y and Z. I wish to ask the Minister a straight question. He has said that no favouritism was shown to Goodman International as against any other company, in this case United Meat Packers, but may I ask him if United Meat Packers were afforded the opportunity to avail of money under section 84? Was a similar amount of money made available to UMP as was made available to Goodman International since the launch? Second, is it true that at that launch a clause was inserted which stated that 600 new jobs would be created. It is my understanding that the Government asked that this clause be removed. Does this not amount to favouritism? Third, is the Minister aware that when Mr. Rafique, the owner and chief executive of UMP, arrived in Tuam in late 1987-88 to buy a site on which to build a factory — the Minister can check this with the chamber of commerce — he was told specifically by the Industrial Development Authority that he had no business opening a factory in Tuam because of the deal with Goodman International? I defy the Minister to contradict me. All I am saying is that favouritism was shown to the Goodman Group. Unfortunately, the Goodman Group got into difficulties and we were all left with egg on our faces.
Was the Deputy not a Minister of State when the factory in Tuam closed?
(Wexford): Who closed it?
Let me deal with the Tuam sugar factory. It is obvious that what you want to do is to hang a gate on the bridge at Athlone and turn the west into an Indian reservation for the amusement of tourists. You will not be given the chance to do so.
The Deputy contributed.
Deputy Connaughton, would you address the Chair? You will get a more sympathetic audience from the Chair than you will from addressing people on my left.
(Wexford): Who closed the factory in Tuam?
There is a lot of noise on that side of the House.
It is not confined to one side.
That is not fair.
We are being told that the jobs are going to be saved and that the Government are doing all they can to ensure that this happens, but I suggest that the Government have no say in the matter. If the banks say "push off" that is exactly what they will have to do. As long as Fóir Teoranta or some other State agency are not there to oversee the short term strategy of the banks we are undoubtedly going to pay the price. One way or the other once the Receiver is appointed we will know on whose side he will be.
Even at this late stage the Government have an opportunity to show some real will. Unlike most of the Members here, I dealt with Mr. Rafique and Halal the very first week he came to Ballyhaunis. I believed then that he was an independent minded man and, as Deputy Deasy said earlier, he ran a good company and sold meat where other Irish companies never sold it in years gone by. What I am saying is that if we take him and his company out of the equation there will be a lack of competition in the cattle and sheep meat sector all over the country, not just in the west.
What is going to happen to the farmer with a £14,000 cheque in his pocket who telephoned me this morning? That cheque bounced in the bank last Friday. Would the Minister tell me and the House what the receivership will mean for him and many hundreds like him who are small creditors around the country? My time must be up at this stage, a Leas-Cheann Comhairle.
I think the Deputy may have taken a minute of Deputy Kenny's time. He has approximately five minutes.
The only valid test of leadership is to lead and to lead vigorously. The Taoiseach and the Cabinet will be judged on their performance in response to this calamity. On this very day five years ago Fianna Fáil took office following the 1987 general election. Connacht is now being turned into a wasteland by the continued drift from the land, emigration and industrial decline. As I said, the Government will be judged by the people on their performance in response to this calamity.
As Deputy Deasy pointed out, once the doors close and the gates are locked in any factory it will not re-open. The factories in Castlebar, Claremorris and Tuam did not re-open and the Government did not deliver on their promise that a replacement would be found. Despite meetings, discussions, protests and deputations once the padlocks are on that will be it. A few years ago a plant in Belmullet was allowed to close on Christmas Eve but because of the power of the spirit and the will of the workforce, together with the agency involved, they were able to find a replacement. The Culliton report indicates that there has never been as many opportunities available for this country as the number available to us at present. I wonder, therefore, why all the Government speakers have failed to come up with any semblance of a solution to this problem.
The question I want to ask the Minister, Deputy Walsh, is whether all these plants will be saved and allowed to continue in operation. Will it be possible for the courts under the section of the Act referred to by Deputy Leyden to appoint the Receiver as an Examiner to continue the examination in this regard? Do we have at our disposal all the figures involved? Is the figure £4 million, £50 million, £60 million or more? Is there a black hole which we do not know about or are we witnessing a ritual killing by the Fianna Fáil Party with the butcher's knife pointed towards the west? As we are aware, there are people who would like to see this group go into receivership so that they would be able to buy the plants at Camolin or Charleville in the morning. If this happens the vultures will gather and the asset strippers will be in like a flash.
The Industrial Development Authority now tell us that it costs £40,000 to create a full time job. If we multiply £40,000 by 900 we get a figure of £36 million. Six hundred part time jobs multiplied by £20,000 is another £12 million, that is £48 million. Taking an average of £150 per week for social welfare or unemployment benefits it would cost £1.17 million to pay 1,500 workers in a year; an average payment of £200 per week in unemployment benefits to the workforce would cost £1.56 million per year.
The Government will be judged by their response to this calamity. We do not want the province of Connacht and other areas turned into a wasteland. I listened with interest to the Taoiseach's inaugural address at the Árd-Fheis last Saturday when he said that each and every opportunity would be made to retain, maintain or to put jobs on the market and would be examined in detail by the Government. They now have the opportunity to do this. Regardless of the jobs forum it is now up to Fianna Fáil in particular to ensure that all the plants remain open and continue in operation. We shall judge them by their performance.
May I share my time with Deputy Calleary and Deputy Clohessy?
Is that agreed? Agreed.
This is a matter of great concern to the west, particularly to the farmers and industrialists in that area because of the number of herd owners. In County Mayo there are 5,200 sheep owners and 17,000 cattle owners; in County Galway there are 7,500 sheep owners and 16,800 cattle owners; in County Sligo there are 1,900 sheep herd owners and 5,900 cattle owners; in County Leitrim there are 980 sheep owners and 4,800 cattle owners; in County Roscommon there are 2,950 sheep herd owners and 840 cattle owners.
Halal have created employment over the last number of years in the west and I am deeply concerned about people losing their jobs. However, I have the greatest confidence in the Minister for Agriculture, the Minister for Finance and the Taoiseach to ensure that these jobs will be restored. I know what it feels like to be made redundant, I was made redundant from the GWI factory in Collooney many years ago, I know the pain of families who suffer as a result of a bread winner being made redundant. That was a scaled down operation but, unfortunately, some years later the factory closed. I approached the Leader of the Opposition, Deputy John Bruton, who was then Minister for Industry and Commerce, to try to keep GWI open. A sum of less than £500,000 would have saved 150 jobs in the west but the money was not forthcoming from the then Minister and the Government of which he was a member.
A brand new plant was built in the area.
I was very disappointed at the time that the money was not forthcoming and the same applies now in relation to the number of people who will lose their jobs in the west. I am very concerned about them but I hope they will not be made redundant. Western Fianna Fáil Deputies had meetings with the Taoiseach, the Minister for Finance and the Minister for Agriculture and Food yesterday to see what could be done.
They did nothing.
I must express my deep sadness at the closure of such a huge business as UMP and their subsidiary factories throughout the country. Our first concern in the face of the crisis at the UMP plant must be for the livelihood of the 900 permanent workers and the 600 casual workers and their families in the various plants in the west and at Charleville and Wexford.
Given the scale of the jobs crisis, nobody wants to see the closure of any of these plants or the loss of jobs. That is foremost in the minds of every member of the Government and indeed every Member of the House. I regret the ritualistic Government and bank bashing which has constituted so much of the debate on this major crisis facing the west arising from the problems of the UMP group. I am aware that there have been intensive efforts behind the scenes over the past week involving various Government Ministers, including my Progressive Democrats colleagues, Deputy O'Malley and Deputy Molloy, in a bid to secure the future of the plants and the success of the examiner.
The problems of UMP clearly go much deeper than the attitudes of the banks or any response which the Government could engineer. We must also look at the very serious management problems which clearly exist in the company. We should also examine how their debts of £45 million arose.
Over half the Irish beef processing industry has collapsed into examinership or receivership over the past two years and it is obvious that one of the country's primary food processing sectors is in an alarming state. Urgent strategic remedial plans must be put in place on an industry wide basis. The knee-jerk, political bashing which has dominated the debate, especially from the Opposition benches, has been inadequate and unhelpful and will certainly not safeguard jobs. We need a rational informed debate on the reasons for the beef processing industry reaching such a sorry state, in particular their reliance on a couple of big players. My colleague, the Minister for Industry and Commerce, Deputy O'Malley, has taken action to prevent further ownership concentration in the beef sector. Many lessons must now be learned from the market dominance which meant that any financial trouble in a single group inevitably affected many workers and farmers and undermines the well being of the entire community.
The Progressive Democrats will do everything possible at Government level to ensure that the various UMP plants are sold as a going concern. We will also do everything possible to ensure that buyers are secured for all the plants so that beef processing can continue uninterrupted, that the interests of the workers, beef and sheep farmers will be secured and that the overall wellbeing of this vital food processing sector is put on a sound footing.
It is impossible in a short time to say what can and should be said in relation to this matter. I heard most of the contributions today and I wish to pay tribute to Deputy Deasy for the manner in which he approached this debate. I also wish to pay tribute to the Labour Party for meeting after the disruption of the Dáil this morning and the way they enabled the two and a half hour debate to go ahead.
Halal and United Meat Packers had an enormous impact on the west. Those of us who were in the Dáil when Halal were established and who have been in contact with them since — and who have been able to help the company — know how much they have done and what they mean to the west. Deputy Kenny used the word "calamity". It is a calamity but questions must be asked in relation to how it overtook us. The Minister for Agriculture quoted a figure of £270 million in turnover. If that is the case, how can the company now have liabilities of one fifth of that amount?
That is not unusual.
I did not interrupt the Deputy, please do not interrupt me. There have been flights of fantasy in the House this morning in relation to conspiracy. The word "conspiracy" was used by at least three different Members on the other side of the House.
How could a Government who depend on a fair amount of support in the west conspire against those on whom they rely? The suggestion is ridiculous and not credible. Reference has been made to what happened in the case of the Goodman group. Without the legislation which enabled the Goodman package to be formulated this company would have gone into receivership two years ago. However, the Opposition do not seem to understand that.
It is ludicrous to say that United Meat Packers Ltd. could be saved by the provision of £4 million. As everyone knows, it is not just £4 million that is involved. The provision of £4 million would have been easy if the Examiner could have given a guarantee to the banks that he would have been able to repay them after the examination period. The Goodman package was agreed between the banks, the Goodman group and the Examiner. However the Examiner in this case found it difficult to get agreement.
The scenario painted this morning by the Minister for Agriculture and Food is the best option for replacing and retaining these jobs. I do not care who owns the company: my only concern is that these jobs should be retained. I have suggested to the Taoiseach that, if possible, the State should purchase the company. I am sorry if what I have said is somewhat disjointed but it is difficult to say all I want to say in four minutes. Some of my colleagues and I have met the Taoiseach, the Minister for Agriculture and Food and the Minister for Finance on numerous occasions during the past week to ensure that the maximum number of these jobs is retained in areas which badly need them.
I call Deputy McCormack. I should point out that the Minister must be brought in at 2.20 p.m.
I wish to share my limited time with Deputy Belton and Deputy Therese Ahearn.
Is that agreed? Agreed.
I was devastated at the announcement that the Examiner has thrown in the towel and a Receiver has been appointed to United Meat Packers Ltd., formerly the Halal company, and that they will now be put into liquidation. This will be a shattering blow to farmers in the west and particularly to those in County Galway. I am very familiar with the sheep trade in Connemara. Eighty per cent of hill lambs owned by farmers in Connemara are killed in Ballyhaunis or Ballaghaderreen. These factories have built up a special trade for these sheep over the past number of years by going out and seeking openings in Middle Eastern and European markets. No other factory in the country is geared to handling those sheep. What prospects will those farmers have of selling their sheep in the future?
I am also very concerned about the hundreds of farmers, many of them in my constituency, including Connemara, who have uncashed cheques. I am not talking about thousands of pounds worth of cheques. I am talking about cheques for £200, £600, £800 and, in one case, £1,200. I should like the Minister to say when farmers who have cheques in their pockets at present will be able to cash them. When will the east Galway farmers who have received larger cheques for cattle get their cash?
Regardless of what Members from the Government side say, I cannot help contrasting the Government's lack of action in this case with what happened in August 1990 when the Dáil was recalled for a 13 hour debate on legislation which made it possible for the banks to give £550 million to the Goodman group. Yet, it is not possible to make the banks give a guarantee for £4 million in this case. It has not been possible to do this because of the Government's attitude to the west: they seem to believe that the west should be closed down and they do not seem to have any regard for the people who live there.
Despite the fact that three Government Ministers come from the west — two from Galway and one from County Mayo — nothing is being done for the west. In fact, they are not even in the House today for his debate. The Taoiseach and Minister for the western alliance——
The Deputy might wear out his friendship with Deputy Belton and Deputy Ahearn if he continues much longer. There are only five minutes left.
I hope I am not wearing out my friendship with the Minister from the west. I appeal to him today to come to the rescue of the west. I ask him not to close the gates at Athlone and Lanesboro or to say "to hell with the west". We will not allow the Government to live this down. If these factories are closed they will never be re-opened because the vultures will come in and strip the assets for the benefit of the banks and not for the benefit of the farmers and suppliers in the west.
If Deputy Belton wants to be chivalrous he can take two and a half minutes and leave two minutes for Deputy Ahearn.
Earlier I made a remark which the Leas-Cheann Comhairle resented — I suppose I made it at the wrong time. However, I have been contacted by people who have received cheques from this company. These people will not be able to cope with this disaster which has befallen them. In recent weeks we have heard promises from the Government that they will tackle the jobs crisis, that there will be a new beginning on the jobs front. If this is an example of this new beginning, all I can say is God help the country.
As a Deputy from County Longford, I am very familiar with the markets which have been supplied by UMP. I wish to raise a point which has not been faced up to today. I should like to know if, after the Receiver is appointed, the existing markets will still be there after a period of time. I am sure they will not be there. This is an unique case. I hope the Minister in his reply will give a guarantee that those unique markets will be retained. I want to emphasise again the importance of these jobs and markets to the people of the areas affected. As I said, people who have cheques do not know if they will get their money.
I cannot say all I want to say in two minutes. I am appalled at the extraordinary complacency shown by the Taoiseach and the Government to this debate in the face of 1.500 job losses. If this appalling prospect of job losses cannot move the Taoiseach and the Government to act, I question what will? How could the Leader of any Government refuse adequate time for a debate in this House on the impending closure of an industry which has a national dimension and which will affect not only the workforce but the entire country? Yet at the twelfth hour in the life of United Meat Packers Ltd., the Taoiseach sought to stave off a debate in the House and laughed. I could not detect in his attitude any real concern or deep appreciation of the crisis or any need for urgent action on the closure of this company which will be a devastating blow to the entire country and the beef industry.
I ask where this country is going under such leadership. As Fine Gael spokesperson on Labour I refuse, as a result of the Taoiseach's attitude here this morning to accept as genuine any public expression by the Government of their deep concern for the unemployed or job creation. They seem to be prepared to allow 1,500 job losses overnight. Is it any wonder the Taoiseach is refusing to accede to the establishment of a jobs forum? As a result of his attitude to the establishment of a jobs forum and the crisis in United Meat Packers Ltd., I can only conclude that the Taoiseach and the Government are neither interested in job creation nor in retaining jobs. The Government must intervene in this case quickly to cover the short term difficulties in UMP. As Deputy Higgins pointed out, the Government must understand that the phenomenal cost to the State of an additional 1,500 people on the dole queue would far exceed the cost of saving the jobs on the spot.
I cannot accept that the Taoiseach could not consider this crisis worthy of an immediate debate in the House this morning. In view of this, how could we expect the Taoiseach to make the responsible decision to provide £4 million to secure these jobs? It must be remembered that the Government have the power to save these jobs but the question is, do they really want to? The six mark question is: why are the Government reluctant to provide the financial resources to aid this viable industry in the food sector, a sector about which we hear so much and on which the viability of our agricultural industry depends? We are now faced with the loss of 1,500 jobs and no action is being taken. The Taoiseach laughed this morning in the face of the concern expressed by members of this party. If this delights him, how loud will be his laughter when the final sod is laid on the grave of UMP? This is supposed to be an open Government——
RIP is appropriate; the Deputy must conclude.
——but they are empty and hollow, naked of any concern for the human misery facing the 1,500 workers. The Government are incapable of taking the responsible step of ensuring the survival of UMP.
Before calling the Minister, the Chair wishes to acknowledge the co-operation of all the contributors.
I thank Deputies from all sides who contributed in a very constructive way to this debate. It is with no degree of delight that we in this House, particularly the Government and myself, learned that a large part of the food industry, and indeed the economy, found itself in financial difficulty. The company applied for the appointment of an Examiner to help resolve the difficulty. The Examiner raised some money to try to keep the company in operation but found he had to seek additional money during the week. The main banking group, BNP, which was exposed more than any other bank, refused any further involvement in the company without the involvement of the Irish commercial banks. These banks took the view that, as BNP were the main bankers to this group and had allowed themselves to be exposed to a considerable extent, they would not be prepared to become involved.
The management in this case had a responsibility to the workers and to the industry to run a good operation and not to allow the company get into difficulties. What we are talking about is a company with major liabilities, much more than the £4 million mentioned.
Just half the amount involved in the Goodman case.
If the problem could have been solved by providing £4 million, that would have been done. During the past week slaughtering was discontinued at these plants and cheques to farmers have bounced. As Deputy Belton said, markets are being lost. The Examiner came to the conclusion that the situation would have become even worse if he continued for another week. At that point it was the view of most people involved that a receivership was the best available option to keep the plants in operation, to retain the markets and to pay the farmers and small creditors who are owed money. A constructive receivership, which is what is expected in this case, will re-open the plants and will in the long term — I am talking about weeks — sell them to people who will be able to operate them free of the heavy burden of debt which has been crippling UMP. When a Receiver is called in, the debt is put to one side and it is the responsibility of the Receiver to re-open the plants and ensure that they operate as a going concern. That is what I expect will happen.
Comparisons have been drawn with various historical cases, particularly the Goodman case. There is a crucial difference between the Goodman case and the UMP case.
The golden circle.
In the Goodman case the banks involved considered they could recover a substantial amount of the money owed to them through the sale of other assets outside the companies. In addition, there was a possibility of the recovery of Iraqi debts after the hostilities there had ended. However, no such possibilities existed in the case of UMP. Before I leave this issue I will repeat what I said at the outset, that no Government money was provided to rescue the Goodman group.
What about section 84?
The Iraqi money never arrived.
Under the Companies Act an Examiner was appointed. I am sure it is the hope of everybody that these plants will re-open. I refer particularly to the west of Ireland because the people there shouted a little louder than everybody else.
It is a case of need.
In regard to the plants in other parts of the country, including Cork, it would be considered reasonable that other companies will buy these plants. From my discussions with the banks, I understand that ready buyers in the co-operative and plc area will be found for those plants. There is a greater difficulty in the west and that is why we are putting so much effort into ensuring the plants there remain in operation.
What about the people who are owed money?
I am concerned about the farmers and small creditors who are owed money. The major creditors are the banks and they can be put to one side. I understand that payments owed to farmers and small creditors will be a prime charge on the assets and consequently those people should be paid in full.
At present farmers and others who are owed money are not being paid.
Are they regarded as preferential creditors?
If Deputies continue with this corncrakish type of interruption, the Minister will not be able to conclude.
The corncrake is extinct.
When the Minister concludes Deputy Deasy will be allowed put one question if he so wishes.
I will put a question now.
No, when the Minister has concluded the Deputy may put his question.
Are the farmers regarded as preferential creditors?
The Minister should be allowed conclude without interruption.
The corncrake will never again be heard in Ballyhaunis.
I am giving an undertaking to the House that I will make immediate contact with the Receiver who is at present in Mayo endeavouring to re-open the plants. The priority will be to retain the jobs and ensure that farmers and small creditors are paid.
That is very reassuring.
I have been in contact with the State agencies, particularly the Industrial Development Authority, who have communicated with the Receiver to see to what extent they can become involved in the restructuring of this company. We hope there will be a future for the company and for the industry. Deputy Howlin in his very constructive contribution asked when will we stop having crises in the meat industry. What has been happening in the meat industry, particularly in the beef industry, over the past few years has been no joy to anybody. I, more than anybody else, would like to see an end to the crises. I would like to see the meat industry, particularly this organisation, put on a sound financial footing, with quality of management and of product so that we will not end up back in the Dáil insulting, accusing and criticising one another. In many other parts of the industry, particularly the dairy sector, these problems do not arise because that sector is well structured and well managed. I want to see the principles that apply in the dairy sector of the food industry applied in the meat industry. I have no doubt that with my consultations and those of my colleagues in Government with the Receiver and with the State agencies involved, we will ensure a recovery in full in this case.
What about the section 84 loans?
As a result of what has been said by Minister Walsh and what was stated earlier by the Minister for Finance, Deputy Ahern, can I take it that the jobs in the four plants are guaranteed? I also wish to ask whether the farmers who are owed money and whose cheques have been bounced and the suppliers whose cheques have been bounced are to be paid. Will they be regarded as preferential creditors? Can the Minister guarantee that?
Yes, I understand that in respect of payments owed by the Examiner to farmers, farmers will have a prime charge on the assets and, consequently, should be paid in full. I shall meet the Receiver, who is now in charge, to ensure that farmers and small creditors will be paid in full. That is a matter for the Receiver, but I shall make immediate contact with him to ensure that. As I said, the priority for me and the Government, with the Receiver, is to ensure that the jobs are protected and that those people are paid.
Can the Minister guarantee that?
I cannot guarantee it. However, as I said, I shall make immediate contact with the Receiver to try to ensure that that will be the case.
And to hell with the west.
The availability of section 84 loans is a matter for any company and their bankers. It is open to any company to apply for section 84 loans. No State approval is required, provided that the provisions of the relevant tax legislation are met.