Dáil Éireann debate -
Thursday, 11 Mar 1993

Vol. 427 No. 8

Adjournment Debate. - Claremorris (Mayo) Job Losses.

Mr. J. Higgins

I wish to thank the Chair for choosing this matter for this evening's Adjournment Debate. I do not wish to be disrespectful to the Minister of State at the Department of the Taoiseach but the person who should be here for this debate is the Minister for Enterprise and Employment, Deputy Quinn.

Clare Morris Limited have been based in Claremorris, County Mayo, for the past 22 years. At peak production it employed 80 people. Today it employs 38. Unless urgent intervention is forthcoming at top level — by "top level" I mean by the Minister for Enterprise and Employment making eyeball to eyeball contact with the parent company — then all 38 jobs will be lost. A padlock will be on the gate and another, albeit a relatively small international company, will have fled our shores. This is bad for Mayo as a community locally. It is bad for the country in a national context. It is extremely bad for Ireland's image internationally because it confirms the abandonment of Ireland syndrome by foreign companies located here and which will be used effectively to damage us by our international competitors.

The problems of Clare Morris Limited are essentially fourfold. First, the company is facing savage and unfair competition from rainwear products being dumped at extremely cheap prices on the Irish market from the Far East. The second factor is crippling bank interest rates. Thirdly, there is the failure of the Government to allow the company to qualify for the scheme introduced by the Minister responsible for trade for currency compensation for companies exporting to the United Kingdom and affected by sterling devaluation. Last, but by no means least, the 21 per cent VAT has paralysed the company's competitiveness. When one considers that 21 per cent adds more than one-fifth to the price of the product and when a company is faced with goods produced in the sweatshops of the Orient, then the VAT rate can be the final killer, as it is in this case.

I request the Minister of State to ask the Minister to make contact with the parent company in the United Kingdom, Peter Storm Limited of Nottingham, with a view to offering the parent company every possible assistance to overcome its present difficulties here. I further request, if the parent company does not intend staying here, that its Irish subsidiary be kept open as a going concern by it until such time as a buyer is obtained. The workforce at Clare Morris Limited are highly skilled. The quality of the rainwear products produced is superb in terms of finish and extremely durable. There is a substantial investment in machinery and plant. This is the type of assembled enterprise which will be extremely hard to put together in the future.

I am pleading with the Minister to use his powers of persuasion with the company to keep the doors open and to give the existing management and staff a chance to show all concerned that they have the capacity to engineer and trade their way to a successfully re-established venture.

I would make the point, that a few years ago Claremorris had one of the longest-established best known bacon curing and processing plants in the country. Rationalisation plans in the bacon industry meant that it went to the wall. What was once a thriving factory employing several hundred people is now a sad, drab spectacle. We do not want the same to happen to Clare Morris Limited. The west of Ireland has seen a massive pattern of decline and decay. The Castlebar bacon factory has gone with the loss of several hundred jobs. Tuam sugar factory, a huge employer in its day, has now been razed to the ground. Irish Spinners Limited in Kiltimagh has been closed. Creagh Agricultural Institute in Ballinrobe has been closed. Ballinafad Agricultural College is a thing of the past. Does one need to mention Digital? The list goes on and on.

I ask the Minister to convey the concern of the House to the Minister for Enterprise and Employment as 38 jobs, families and livelihoods are on the line.

Minister of State at the Department of the Taoiseach (Mr. Dempsey)

I convey sincere apologies on behalf of the Minister for Enterprise and Employment, Deputy Quinn, who intended to be here but, unfortunately, was held up. The Minister has asked me to assure the House, and the Deputy, of his concern about the proposed closure of the manufacturing operations of Clare Morris Limited and the consequences for the workforce involved. The House will realise, of course, that in the case of any enterprise a closure decision is a matter essentially for the owners and management of that enterprise.

This company, a subsidiary of Peter Storm Limited, Nottingham, England, has experienced difficulties in the past few years because of a decline in demand for the company's products in the UK due to severe import competition on that market. The company's problems have also been exacerbated by the overall downturn in retail sales in the UK due to the recession.

I am conscious of the adverse impact both economically and socially of the loss of 38 jobs as a result of the proposed closure of the Clare Morris factory. Despite the best efforts of the IDA, who met with the managing director of the parent company on 4 March 1993 in an effort to avert or at least defer the closure, the parent company was adamant that the decision to close, in May, was irreversible. The Minister has asked the IDA to do everything in its power to find an alternative company to take over the operation.

The clothing and textiles industries in Ireland continue to be very important sectors in our economy, as indeed they are in the European Community generally. More than three million people are employed in these sectors in the Community and the importance of them nationally should not be underestimated.

About 23,000 people approximately, one in eight jobs in Irish manufacturing industry, are directly employed in these sectors and many more jobs depend on them indirectly at local level. Virtually every area of the country has employment in these sectors. Gross output amounts to about £900 million. More than 80 per cent of the industry's production is exported, mainly to European Community Countries, and this underlines the importance for Ireland of the export market.

The future well-being of the clothing and textiles industries in Ireland is inextricably bound up with the Community markets. The Community has been suffering for a number of years from recession which has had an effect generally on demand and prices of the products of these sectors. This has had a knock-on effect on demand for our products. We therefore have a vital interest in seeing the Community strong and growing again because such growth could provide the basis for a recovery in terms of employment and exports in these industries.

Obviously with the advent of the Single Market, competition is intensifying and our industry must continue to face up to these challenges. While competition from other member states' industries has been increasing on the Community market, external competition, especially from the newly emerging democracies of Central and Eastern Europe continues to pose serious challenges for the Community as a whole.

The Minister would like to stress that he is acutely aware of the current problems of the clothing and textile sectors and the extent to which its problems have been exacerbated by the currency crisis. A number of provisions have been put in place to address these issues. The Government decided in October 1992 to make £50 million available over a six month period to help firms, the employment and output of which were under threat due to the currency crisis and, in particular, the devaluation of sterling. The bulk of this money was allocated to a new scheme — the market development fund — which was subsequently approved by the EC subject to a range of specific criteria. The Minister understands that Clare Morris Limited did not apply for funding under the market development fund.

Given the history of trade links with the UK, firms in the clothing and textiles sectors have been very significant beneficiaries under this scheme. These measures on their own will not solve all the industry's problems. The Department has had regular contact with the relevant State agencies to examine the problems of the industry on an ongoing basis in an effort to take account of specific sectoral needs.

In the case of clothing and textiles, the strategy is to develop strong companies, which are able to compete in the domestic, but particularly in the international markets, by improving management and production expertise. Clothing manufacturers are now being actively encouraged to switch from overdependence on the UK market, and to exploit competitive advantages in design, service and shorter lead times in order to gain a foothold on the broader European and other markets. The industry has undergone significant restructuring over the past number of years. Structural adjustment was due to a number of factors including ongoing improvements in technology, rationalisation, increased competition for low-cost sources, changes in distribution, currency fluctuations and the level of demand.

The Minister is confident that the clothing and textiles sectors can respond to the challenges that lie ahead. He is hopeful that with proper management and manufacturing expertise these sectors of Irish Industry can use the advantages in the areas of design, quick response and so on to explore new markets and continue to maintain their place of importance to the Irish economy.