Dáil Éireann debate -
Tuesday, 1 Mar 1994

Vol. 439 No. 5

Adjournment Debate. - Irish Steel Limited.

Mr. Allen

I propose to share my time with Deputy Bradford.

I would like to put political differences aside tonight and appeal to the Minister to come clean on Irish Steel Limited in Cork. A serious and dangerous game of cat and mouse is going on and it is being played with people's lives and future. The uncertainty surrounding the plant is hurting families, and morale at the plant must be very low. Will the Minister take the necessary steps to restore confidence in the plant? To clarify the position the Minister must release the consultant's report on the future of Irish Steel. The leaking of the document over the weekend must have come from the Government or the board of Irish Steel. Will the Minister put the record straight tonight for the sake of the plant, the employees and their families and the welfare of Cork city? All the Deputies representing the area are here and it reflects our interest. Irish Steel is unique and must not be included in the decimation of steel plants throughout Europe. Ireland, as the only island nation in Europe, has a strategic interest in retaining and maintaining a steel mill. In the interest of fair play and openness will the Minister make available to the Members and to the public all the important parts of the report, although I accept that he may feel that some parts are sensitive and could be prejudicial to the board.

Mr. Bradford

I thank Deputy Allen for allowing me to express my concern about Irish Steel and I agree with his demand for clarification. The air of uncertainty surrounding the plant is very damaging. The Minister is more than aware of the importance of this plant to the Cork region, particularly east Cork and Cork city area. It is the lifeblood of the town of Cobh as the vast majority of the workforce come from there. Any major loss of jobs in the plant would be a disaster for the town.

We are not expecting miracles from the Minister but it is not long since promises and commitments were being thrown around like wedding confetti. Perhaps all the promises cannot be delivered on but I appeal to the Minister to do the maximum and in the short term to clarify the situation. Deputy Máirín Quill wishes to avail of the half minute left.

Miss Quill

I appreciate getting the time and I join in the appeal to the Minien ster. He should publish the report as it was commissioned by his Department and it has his backing to that extent. The workforce need to know exactly if it is the intention of the Minister to act on the recommendations of that report.

Another report came from the board today and I hope that report will get full consideration before any action is taken. While we all admit the need for cost cutting, none of us will concede that there is scope for laying off more than 50 per cent of the workforce as recommended in the consultant's report. That would have a devastating effect. This plant is worth at least £11 million annually to Cobh and its environs. To take that kind of spending power out of that region would be the death knell of the town of Cobh. The Minister should intervene quickly and put in place a rescue package that will guarantee the long-term viability of the plant and save the maximum number of jobs.

Mr. M. Ahern

I propose to share my time with Deputies Mulvihill, Wallace and Martin.

For the past 13 years I have represented Cobh. In the mid eighties the closure of Verolme Dockyard had a devastatingly depressing effect on the people. I hoped that another catastrophe of that scale would not occur, but if we are to believe the newspaper reports this weekend the future for Irish Steel is not hopeful. About 300 or so of the workers live in Cobh or its environs. Friends and supporters of mine whom I met over the weekend have expressed grave concern and anxiety about their future and how they will pay their mortgages, pay for their children's education and honour other commitments.

The loss of Irish Steel would mean the loss of about £11 million in wages circulating in the area and would have a serious effect on small service industries. The workers are aware that changes and rationalisation will have to come to ensure the future of the company. The suggestion in the newspapers that 56 per cent of the workforce would be let go is nonsensical, especially when they suggest that the company will survive when those people are laid off. The plant could not operate with 200 people or fewer.

I decry the manner in which the report was leaked to the newspapers over the weekend. I am sure the Government will have time to consider this problem and come up with a package to ensure the future of all the people working in Irish Steel.

Mr. Mulvihill

I live in the Cobh area and have many ties with Irish Steel as I was once employed there and I have a fair knowledge of what goes on. Irish Steel means everything to the town of Cobh with its population of 10,000 people. Every household has some connection either directly or indirectly with Irish Steel. Further job losses in Irish Steel would devastate Cobh. The dockyard in Cobh closed some years ago and we were promised 450 jobs which to date have not been delivered. The people of Cobh are worried by the way this document was leaked last Saturday. The Cork Examiner referred to 330 redundancies and this would devastate the town. Although once we had great employment, now there is very little. Redundancies in Irish Steel would also affect spin-off industries and cause terrible problems for the population.

There is a future for Irish Steel. There are problems in Europe because European flat steel prices have fallen by 10 per cent since April 1991 and only recovered half of the 20 per cent drop which occurred from April 1991 to April 1992.

Only concerted action by European steelmakers will stabilise prices and turn around the European steel industry. I appeal to the Minister to put his every effort into saving the jobs in Irish Steel.

Mr. D. Wallace

Recently in Cork the Minister made a very positive statement on job creation which was widely welcomed throughout the city and county. Unfortunately, the announcement on Irish Steel over the weekend is a cloud not alone over Cobh but over the city at large. Employment in Irish Steel affects both city and county. There is grave anxiety among those who work in the plant as well as those involved in subsidiary activities.

We know the Minister's record on Irish Steel, because in the past we have discussed with him the future of Irish Steel. He is well aware of our concerns and I know his commitment to Cork. I join with my colleagues in asking him not only to clarify the uncertainty but let it be known where Irish Steel is going. Management and workers in Irish Steel cooperate fully and will not be found wanting.

Mr. Martin

I join with my colleagues in expressing concern at the announcement on Irish Steel over the weekend. When the all-party delegation met the Minister to discuss Irish Steel he told us it was one of his priorities to build up confidence and trust between workers and management. The nature and the manner of the leak over the weekend has done a great deal to damage that trust. It is imperative that the Minister intervene at an early stage to bring management and workers together to negotiate in the context of the consultants' report. There needs to be a team approach to the resolution of the difficulties that face Irish Steel.

It is very important that approaches are made to the European Communities in the context of employment as this is a major employment issue in County Cork. We need certain safeguards and protections, given the overall level of unemployment. With Europe's new emphasis on employment policy in the social document announced by Mr. Delors, we have a clear case to make to Europe on its role in the preservation and protection of existing jobs in our economy. Irish Steel falls into this category.

I welcome Deputy Allen's comments that we must not play politics with this issue because the livelihoods of too many families are dependent on it.

Minister for Enterprise and Employment (Mr. Quinn)

I appreciate that seven Members have contributed to this debate, which is without precedent.

I am glad to have this opportunity to clear the air on the consultants' report on Irish Steel. I do not have to remind the Deputies of the background to this report. In its financial year ended 30 June 1993, Irish Steel lost £13 million and its losses were continuing at the rate of £1 million a month. Negotiations aimed at reducing these losses by cutting labour costs and changing work practices took almost six months to negotiate and indeed brought the company to the brink of closure. In response to a call from SIPTU that the cost reductions did not go far enough to ensure the viability of the company and that a study by consultants should be done on the management's plan for viability, I commissioned last December a report on Irish Steel, the main purpose of which was to review the management's viability strategy.

At the outset let me say that I have received the report which I have made available to the Irish Steel board on the understanding that it would be treated on a strictly confidential basis. I understand that the report was considered by the board at its meeting yesterday and that I will be receiving its views on it shortly.

I understand also that detailed proposals on specific measures to realise the cash savings that must be achieved, in line with the consultants' recommendations, will be prepared by the board over the coming weeks.

Members will appreciate that until such time as the Government has had an opportunity of considering the report and the board's strategy for introducing the cost reductions that are needed, I am not in a position to say what its position will be on its recommendations. I have to say that the consultants have stated that, in view of the commercial sensitivity of the information contained in the report, it is not intended for general publication and they advise restricted circulation in order to protect the interests of the company, the management and workers, whose livelihoods depend on it.

I fully accept that the publication of sensitive commercial information could be damaging to the company, particularly in these very difficult times for the steel industry, and it is in nobody's interest, least of all Irish Steel's, that this should happen. We must protect against this at all costs. Accordingly, I do not propose to publish the full report. However, because I consider this an extremely important report and because of the need to have an informed and meaningful debate on the future of the company, I propose to make available to Deputies and Senators and to the workforce and management a summary of the report. Furthermore, I am asking the consultants to be available to them for oral briefings and for any clarifications which they require.

Nobody should be foolish enough to think that tough decisions can be avoided in the case of this company or that these decisions will not involve pain. This will not come as a surprise to anybody in the House this evening. Sacrifices will be required on everybody's part. However, decisions require full and careful consideration of all of the issues concerned in a non-confrontational and calm way and in a non-politicised manner. I appreciate very much the comments made by the Opposition Deputies in this regard. I recognise that they have at heart the best interests of the people of Cobh and the workforce at Irish Steel.

This is where we can all help. It is our duty to the workforce at Irish Steel and to the taxpayers to do so. For this reason I must emphasise again the irrevocable damage that can be done to the company through the publication of sensitive commercial information and also through uninformed speculation about its future. Serious decisions have to be taken on the future of the company, a future in which I believe. These decisions are best taken in the light of all the information available, in a calm and considered way and not in the full glare of the media.

As soon as possible — by that I mean in the next number of days or perhaps a week — the company and its employees will have to consider and negotiate solutions to these problems. They must be allowed to do that in an atmosphere that is not clouded by intensive and frequently inaccurate press speculation. They need to take careful and prudent stock of their position and their options. They need to have regard to how the company is perceived by its customers, it suppliers, its creditors and its competitors. In view of the difficulties currently being encountered in Brussels in reducing the huge overcapacity in the European steel market, many of Irish Steel's competitors would be only too glad to see Irish Steel's difficulties being highlighted.

All of us who want to secure the future of the company will realise it is only by facing up to these difficulties that a solution can be found. By working together the workforce, management and the board, with the support of the Oireachtas, can find a satisfactory future for Irish Steel and for the people of Cobh.