asked the Minister for Enterprise and Employment if he will intervene immediately with Greencore plc, in which the Government is a share-holder, to prevent the closure today by Greencore plc of its modern subsidiary, Tuam Engineering Limited, in County Galway.
Private Notice Question. - Threat to Tuam (Galway) Plant.
I understand the Galway company in question has suffered continuing substantial financial losses due to difficult trading conditions. Cost-saving measures were implemented last year, in agreement with the workforce, with a view to putting the company on a viable basis and safeguarding employment. Unfortunately, financial losses have escalated leading to the closure decision following discussions between management and unions.
The Government is no longer a share-holder in Greencore and, as a result, has no direct role in how the company conducts its business. I am sure Members will share my concern at the loss of employment involved. However, I can assure the Deputy and the House that the industrial development agencies are working closely with the parent company with a view to attracting an alternative industry to the area.
Is the Minister aware that for 60 years Comhlucht Siúicre Éireann, subsequently Irish Sugar plc and now Greencore plc, operated in Tuam until in 1986 the Minister's Government decided to close the Tuam sugar factory? During that period it employed 900 people directly and 300 people indirectly. As a result of this decision by Greencore plc, those 1,200 people who have been employed in the greater Tuam area for almost 65 years are facing unemployment with only ten permanent jobs remaining. What does the Minister propose to do about that?
The difficulty with this company has been one of accumulating losses. I know the Labour Relations Commission was actively involved in negotiations to try to secure the future of that company last year and there was a restructuring package. Unfortunately, despite that restructuring package, losses continued to escalate. I know also that Forbairt was involved with the company some years ago in putting together a package of investment to try to improve its performance but again, unfortunately, that did not succeed. The problem now is that the losses have accumulated to a point where the company, which is a private company and not State owned, can no longer sustain that. The issue now for the Government is to use our industrial agencies to seek alternative employment in Tuam.
Is the Minister aware that for the year ended 30 September 1994 Greencore plc had a gross profit of £39.7 million on a turnover of £393.7 million, leaving them with a net profit of £33.7 million? Is he not prepared to intervene with the company, which has made lucrative profits as a result of its trading over the past number of years and has made much gain from activities in Tuam over many years, and direct it to make a major investment in this operation so that it can continue to provide proper employment there?
I think the Deputy misunderstands the Government's relationship with Greencore. Greencore is now a wholly private company. The Government is not in a position to issue directives of any sort to such a company. The only remaining link the Government has with the company is in respect of the control we would have should it suggest disposing of its beet quota. It is not open to me as Minister to direct a private company to do anything of the nature suggested by the Deputy.
I think the Minister is misinterpreting me. I am not misinterpreting the situation vis-á-vis the Minister's responsibilities toward the Greencore operation. This contrasts palely when one compares Tuam Engineering Limited with Packard Electric which received much attention from the Minister and his fellow Ministers. The parent company in this case is a palpable, indigenous one and the Minister must be aware that, for some years, both the IDA and Forbairt have designated Tuam as a chronic unemployment blackspot. In view of that, I am not asking the Minister to direct Greencore, I am asking him to intervene personally and, failing that, to give a commitment to this House as to what he proposes to do to alleviate chronic unemployment in the Tuam area.
The agencies are already working to secure alternative employment for Tuam. The problem is that this company has accumulated losses that have escalated in recent years despite efforts both by Forbairt and by the workers and management involved to restructure its operations and to achieve profitability. Those efforts, unfortunately, have not met with success and it is not an issue for us to seek alternative employment in Tuam and the industrial agencies will be making every effort to do that.
Based on what the Minister said it appears he is not prepared to intervene personally. Will he give the House an assurance that he and his Department, and all the State agencies, will be utilised and that sufficient resources will be provided to ensure that an alternative operation is put into a state of the art, modern, technological company whose assets globally are worth at least £1.5 million in Tuam and that has a national and international record of the highest repute? Will he ensure also that a modern engineering operation is placed in Tuam as quickly as possible and that proper gainful employment is provided for the people of the area.
I assure the Deputy that the agencies will make every effort to secure alternative employment for the area.
In support of Deputy Treacy, I too am disappointed that the Minister does not intend to intervene in Tuam as he has in other areas, even though only a short time in office. If, as it appears, nothing will be done by the Government, has the Minister any proposals to at least ease the pain for the workers by improving the severance package which is not a good one for them? Has the Minister any information about the funding made available by the Irish Sugar Company? I am referring to the £2 million to build a second advance factory in the town of Tuam.
I do not have information about a second advance factory. However, if the Deputy wishes to put down a question, I will endeavour to get the information for him. Greencore is a private company and the issue of severance payments falls to be negotiated between that company, the workers and their representatives. It is not an area where I have a role.
I support both requests made by Deputy Kitt. The Minister has a statutory responsibility pertaining to redundancy. As a result of negotiations over years to bring this company to viability the workers agreed to forfeit Greencore's contribution as an employer to the pension fund. Now, as they are faced with redundancy, they are being denied the single year's contribution which the company did not contribute. Will the Minister intervene with Greencore to ensure that this is made available to the unfortunate workers?
I am not au fait with the matter to which the Deputy refers. Statutory redundancy is guaranteed to workers and that is under the control of the Government. However, I cannot intervene in negotiations between the workers and their representatives and the company. Should there be a problem and issues are referred to the Labour Relations Commission which is an independent agency operated under my Department, I am sure the services of the commission will be made available to assist in resolving issues that are causing difficulty.
That concludes questions for today.