Adjournment Debate. - Preservation of Jobs. – Dáil Éireann (27th Dáil) – Tuesday, 7 Feb 1995

Adjournment Debate. - Preservation of Jobs.

An Ceann Comhairle

Deputy O'Rourke gave me notice of her intention to raise the matter of giving urgent attention to the Silverlea plant in Athlone, County Westmeath, to enable it to continue in operation in order to safeguard employment there. Deputy Paul McGrath has also given me notice of his intention to raise the matter of the need to ensure that 170 jobs at the same plant and the 50 jobs at the Silverlea saved in view of the fact that the company is now in receivership.

As the matters raised by Deputies O'Rourke and McGrath are similar, I suggest that each Deputy should make a statement to be followed by the Minister for Enterprise and Employment who will reply to both. If this is acceptable, the Deputies concerned have ten minutes in total and the Minister ten minutes to reply. Is that satisfactory?

Mrs. O'Rourke

I am sure the Minister will be giving one answer, so that is fine by me. I thank you, a Cheann Comhairle. As you know, I have been knocking on your door making representations about this case in recent weeks and have finally succeeded in raising the matter on the Adjournment.

I want to thank the Minister for the ready, courteous and speedy manner in which he met our deputation, a very comprehensive one, comprised of the Athlone and Athy work people, in his offices this afternoon. Deputy Power has asked to be associated with this request to the Minister this evening. Unfortunately he is unable to be present, as is my colleague, Deputy McCreevy.

While it may be somewhat odd that we shall be repeating the case made to the Minister earlier today, one has to put one's case on the record even though it will have received a very good airing in the Minister's office earlier.

The matter is very serious in that there are 170 employees in the Silverlea plant in Athlone and in excess of 80 in the plant of Athy, which firm also has had a plant located in Armagh, comprising three "As"— Athlone, Athy and Armagh, which are in very serious difficulty, to the extent that a receiver has been appointed to the plants in Athlone and Athy and another in Armagh. This is a recurrence of what happened in the autumn 1991 when there was a very concerted, intense effort by all of the agencies and the receiver of the day. However, there is not the same intensity of effort now, particularly by the receiver in charge of the present operations.

I want to place on record my satisfaction and agreement at the manner in which the IDA — while I know we are not allowed refer to people by name here, the person to whom I refer was mentioned in the Minister's office earlier today, so he is aware of whom I speak — has handled the matter at that level. I have had, I suppose, thrice daily contact with the IDA and the Bank of Ireland in recent months and, while I constantly berate banks, on this occasion they were patient over many weeks while solutions were being sought but not found, eventually leading to the appointment of a receiver. Indeed there is a very tight framework within which that receivership must be concluded, nominally, Friday week, whereas in fact it is this coming Friday. If an immediate solution is not found to the problem of gaining cloth for the firm to the tune of £200,000, thus enabling them to turn over a product for which there is a market and a buyer, undoubtedly the firm will close. However, we must remember that cloth takes some days to order, to be delivered and got into production. As I said to the Minister earlier today, any purchaser would want to see a factory that is humming; that has a psychological effect on the workers also, but apart from that — this is not a fanciful tale I am relating but rather the real story — there are no adversarial worker/management problems. There is no need to find a market for their product, no need for research and development, it is already there represented in the latest cutting machinery. There is no need for the training of workers, since they are very highly trained. There is no need for anything but the two actions I propose, that is a conduit to be found for the tiny amount of money involved in real terms — while nobody begrudges what will be given to Irish Steel in Cork — sought by the plants in Athlone and Athy. A vehicle or conduit needs to be found whereby that money can be allocated immediately, in tandem with a very intense effort to secure a purchaser for the firm.

I merely repeat our earlier appeal to the Minister. I recognise the technical and legal difficulties in giving money to a firm in receivership but, surely there is an inventive, creative manner in which this can be done? While recognising that there is a limit on the amount that can be allocated by the county enterprise boards, they are not yet governed by statute, and have greater freedom of operation. Therefore, the limit imposed on them can be lifted in individual emergency cases. I suggest it is done through the Westmeath and Kildare county ennterprise boards, which does not necessitate legislation, or involve illegal action, thus constituting an avenue to resolution of the present problem.

I am pursuing other inquiries in this respect. I hope that, together, we will be able to save the two very fine plants, Silverlea, Athlone and Athy. Of course, we regret what occurred in Armagh, which we hope is not a foretaste of what will happen in the midlands and in Athlone, since neither town can afford to lose any employment.

Mr. McGrath

Thank you, a Cheann Comhairle, for allowing me to raise this matter on the Adjournment. With your permission, I should like to share my time with my colleagues Deputies Dukes and Penrose.

An Ceann Comhairle

I am sure that is satisfactory and agreed.

Mr. McGrath

The prospect of the loss of 170 jobs in the Silverlea plant in Athlone, County Westmeath has sent shock waves through the commercial centre of that town; the loss of so many weekly wage packets from the commercial life of that town would have wide-ranging effects.

Athlone has a long tradition in the textile trade and many families have a long tradition of service in that industry. The loss of these jobs, through no fault of the workforce, will have a terrible effect, not just on the workers but on their families and the wider community. Silverlea came to Athlone in 1991 and experienced success there up to quite recently. It has a very skilled, co-operative workforce, who have enabled industrial relations to be conducted on a very positive basis. They now look to the IDA, Forbairt and the Minister to take the necessary action to secure some form of future employment for them.

I thank the Minister for having met the workers and Members of the Oireachtas today at short notice and for pledging his endeavours to leave no stone unturned in securing their future jobs. The Minister listened to the many suggestions and proposals put to him, to which I know he will respond in due course. There are 170 established jobs involved and a ready market for their produce. When one considers how difficult it is to create even five jobs within any setting, surely it emphasises the urgency of maintaining those jobs already in existence. Accordingly, I look forward to the Minister's response.

Mr. Penrose

I thank my colleague, Deputy McGrath, for sharing his time and allowing me to contribute to this important debate on the Adjournment.

Recently, the IDA announced that overseas companies in the midlands had performed well in 1994 by increasing the numbers employed by more than 300 people in 56 IDA backed companies. That represented the biggest increase in employment in the past five years. It is against that background that the threat to 170 established jobs in the Silverlea company in Athlone and more than 80 jobs in Athy must be measured. I am aware that many of the 170 people employed in Athlone are the only breadwinners in families which are highly dependent on that source of income to pay their mortgages and other household bills. Every job in a factory, such as Silverlea, directly affects three to four people in a household. The threat of the loss of such an important source of employment can have devastating consequences. Small businesses in the vicinity of such a factory can also suffer adverse consequences. As Deputy O'Rourke pointed out, in Athlone there has always been a great tradition of clothing and textile manufacturing ranging from Gentex, Athlone Apparel to Silverlea. As pointed out, there is a highly skilled and dedicated workforce in the company. That and an excellent modern facility are important factors to be considered in determining the future of this important source of employment in the Athlone area.

I have spoken to the IDA, SIPTU and officials in the Minister's Department and I attended a meeting with a delegation from the company to the Minister today to ascertain the current position. I have been assured that the IDA is actively pursuing the possibility of securing a purchaser for the business as a going concern and it is important on both a national and international level that it be purchased as such. I appreciate this will not be easy given international factors involved in the clothing industry, but it behoves us to make an all out effort to ensure no stones are left unturned and that all avenues and options are explored with a view to saving jobs vital to the Athlone and Athy areas. I urge that every assistance be given to this well established employer. A number of suggestions were put forward at the meeting with the Minister today which I hope he will explore as a matter of urgency. We have a modern plant, excellent quality produce which is acknowledged by the large number of customers and, accordingly, good market opportunities as well as an excellent industrial relations environment in which workers are both flexible and adaptable. I hope a buyer is found immediately to ensure that those acknowledged qualities, skills and markets are preserved and maintained for the future well-being of the areas involved.

Mr. Dukes

I thank Deputy McGrath for sharing his time. I share the concern of my colleagues on both sides of the House about these plants, and support their objective. It is not the first time that the workers in Athy and in Athlone have been through the mill. So far on previous occasions things have worked out reasonably well and our efforts should be to ensure that they work out as well, if not better, on this occasion. I ask the Minister to ensure that the receiver uses every possible endeavour with the assistance of agencies under the Minister's aegis and the customers of the two plants to find a way to maintain them in operation until such time as a buyer can be found. I know that is a difficult order, but to all of us who spoke to the Minister today it seems the most hopeful way of dealing with this matter. I would like the Minister to give an undertaking that all efforts will be in that direction. As separate industrial units, these two plants have shown an amazing resilience through previous difficulties. Knowing the workforces in both plants we are convinced that they can do so again and that these two plants would be a viable part of a new structure put together to continue the operation.

Minister for Enterprise and Employment (Mr. R. Bruton)

I thank the Deputies for raising this issue this evening and I thank them for bringing in a delegation who gave me a valuable insight into the problems at the plants. I am very much aware of the bank of considerable skills residing with the workforce and the excellent working record in both Athy and Athlone. I am as concerned as others about the future of the plants. I found it useful to hear at firsthand from a number of Deputies, a delegation of Silverlea workers and two Ministers of State, Deputies Durkan and Stagg, of the problems and history of this plant. I explained to them the ongoing efforts being made to keep the company in operation.

As Deputies are aware, Silverlea has been experiencing financial difficulties since the middle of last year, unfortunately, these problems have become more acute in the past month and have ultimately led to the appointment of a receiver. That clearly puts a considerable constraint on what the agencies can do to assist the company. However, I am pursuing a number of suggestions made by the deputation and Deputies at the meeting today. I hope something will materialise from our efforts.

I am conscious this is the second time during the past four years that the future of the company has been put in doubt. In 1991 Athlone Apparel, which manufactured jeans and casual trousers, was put into receivership. Silverlea Limited, a Northern Ireland company based in Armagh producing knitwear products, purchased the assets of Athlone Apparel and established Silverlea Ireland Limited as a stand alone operation to run the Athlone and Athy facilities. During the first year Silverlea Ireland Limited operated very satisfactorly. The new company also succeeded in securing new markets in the UK and Northern Ireland and continued to do reasonably well up to 1993. Like many other clothing companies the currency crisis in late 1992 and early 1993 presented particular problems for Silverlea, but this crisis was overcome with assistance from the market development fund. Unfortunately, the company's fortunes changed in late 1993 when it ran into financial difficulties. In addition, it experienced a market downturn in 1994 and this has led to a cashflow problem. As a result Silverlea has built up a very large debt liability. The company was unable to trade out of those difficulties and had to go into receivership.

When it became clear that Silverlea Ireland Limited was experiencing serious financial problems the competitiveness and employment protection unit of my Department, in consultation with IDA Ireland, sought to explore every possibility in order to secure the continuation of the Silverlea operation in the Republic. Over the past month or so the CEPU, IDA Ireland, the company's bankers and other interest parties have examined various options in an effort to secure the company's future. Independent expert advice was engaged also to examine all possibilities whereby Silverlea could remain in business. However, despite the best efforts of all concerned it was not possible to devise a formula which would enable Silverlea to continue to trade commercially. It is, of course, very disappointing that Silverlea Ireland is now in receivership, but the receiver is endeavouring to sell Silverlea as a going concern. I have asked IDA Ireland and Forbairt to work closely with him to achieve this objective. I am hopeful that given the commitment of the workforce and the goodwill built up over the years the receiver will be successful in finding a company interested in taking over the Silverlea operation.

I am conscious of the urgency stressed by the Deputies in their contributions and I assure them that we will make every effort possible to secure the future of those jobs.

Mrs. O'Rourke

I wish to raise a small point, which I omitted to make earlier. The area in which the Athlone plant is sited is an attractive development on the banks of the River Shannon. I do not want the receiver to get the impression that he could sell the site and relieve the banks of their debts but I fear that option has been or is likely to be considered. I ask the Minister to give an assurance that that option will not be taken, that the plant will remain in its present location as a viable unit and will not be sold to clear the banks' debts.

Dáil Éireann debate - Tuesday, 7 Feb 1995

Adjournment Debate. - Preservation of Jobs.

Dáil Éireann debate -
Tuesday, 7 Feb 1995