I wish to share time with Deputies Keaveney and O'Rourke.
Adjourment Debate. - County Donegal Industry.
I am sure that is satisfactory.
I am grateful for the opportunity to make a brief contribution on what is regarded in Donegal as a very serious matter. Today's announcement by the management of Fruit of the Loom that most workers in its factories in the north west will soon work on short-time until the end of this year has caused much concern among its large staff.
As the House will be aware the McCarters of Buncrana have made an enormous contribution to employment in Donegal down through the years and their relationship with their employees has been exemplary. The announcement mentioned various factors beyond the control of management which are responsible for what it is confident is only a temporary drop in demand for its products throughout Europe. They include the extraordinary unseasonable weather during recent months together with the sluggish state of many European economies.
I kept in touch with various parties in Donegal today, including the director of the company. I have no wish to be alarmist because I am well aware that irresponsible comment in situations like this is not helpful. Today and in the coming days Mr. McCarter and his colleagues intend to discuss the position with as many employees as possible so that they will be kept fully informed of developments. I have sufficient faith in Mr. McCarter's ability to be confident that Fruit of the Loom is no fly by night company. His devotion to his native county is well known.
I appeal to the Minister to do his utmost to ensure the company is provided with every assistance available to ensure that it can overcome this difficulty as soon as possible. It is essential that every effort is made to reassure the workforce that their future is secure. I hope no one would be so insensitive as to play party politics with an issue such as this. I assure the Minister that politicians of all sides in Donegal will give him any support that might be necessary.
The McCarter family contribution to employment in Donegal is well recognised, appreciated and probably unparalleled in the country. The news is disappointing for the staff, but this has happened before. The factories, which are well run, employ diligent staff and produce garments of excellence, are a great boost to Donegal. This very successful team is led by directors whose primary objective for the north west, to use their words, is "to ensure that we not only retain but improve our competitiveness in the years to come". They recognise that Irish workers continue to provide the highest levels of quality and commitment. That quality and commitment was recognised in the Joint Forbairt/ICMF Initiative of May 1996 on the clothing industry. I welcome that initiative and ask the Minister to act on foot of that report. I should encourage and enable all existing and potential industries in Donegal to overcome any obstacles like those currently there to fulfil the last paragraph of his foreword in that document which states, "I am confident that, notwithstanding the intensity of the current competitiveness pressures, the Irish clothing industry can overcome these with the full support of Government and the development agencies, thereby securing a longterm viable future".
Fruit of the Loom is a great enterprise and I am confident that with an improvement in the market the current difficulties can be overcome.
I add my voice to that of my Donegal colleagues who have eloquently put their case. I was happy to visit all the Fruit of the Loom plants in the north one day about three years ago at the invitation of Mr. McCarter. While my Donegal colleagues have a greater knowledge of them, I was very impressed by the diligence, expertise and commitment of the staff, management and particularly of Willie McCarter and his family. I ask the Minister at this sensitive time to ensure due care is taken to focus on ever minute detail to assist the staff in that firm regain full-time employment.
I understand there may be an opportunity for the Minister to contact Mr. Farrell in the US, who is involved in a parent company. He, in turn can give every encouragement to Fruit of the Loom Industries in the north-west. When one is as far away as he is, one leaves the running of the enterprise to the home management team. It is doing very well. However, it would be prudent for him to become involved in the long-term future of the firm and for all to work together to guarantee the much needed, highly acclaimed, highly skilled jobs which are greatly enjoyed by the mostly young population who work there.
I thank the Deputies for raising this issue in the very restrained way in which they have, which is born out of their genuine concern for the position in Fruit of the Loom. I fully share their concern.
Yesterday, Fruit of the Loom informed its workforce that it will be placing the bulk of its production workers on a three-day working week with effect from 1 July next. The company envisages that the short time working will last for the remainder of this year. In all about 3,000 workers are involved. This includes most of the Donegal workforce of 2,650, apart from administrative staff, about 200 workers in Derry and some 250 workers in Morocco.
I fully appreciate the concerns of all those involved and I also recognise that these concerns are heightened as this is the second time, within the past nine months or so, that Fruit of the Loom has been forced to introduce short-time working.
The company's decision to introduce a three day working week was not taken lightly. I am aware, from the discussions I had last Friday with Fruit of the Loom's Managing Director, Mr. William McCarter, that the company gave very careful and detailed consideration to the matter before reluctantly arriving at its decision. Fruit of the Loom has been forced to take this action, as the anticipated level of sales for 1996 was not coming up to expectations. While the company is continuing to hold its existing market share, it had been planning to increase this level during the current year. However, a number of factors beyond its control has resulted in the company not realising its growth targets.
These include, the continuing sluggishness of the European market, a bad spring, and a slow tourist trade in continental Europe. Fruit of the Loom, therefore, was left with no option but to respond to the negative impact these factors have had on its sales.
Consequently the company decided to address the current difficulties by reducing output through a temporary period of short time working to control its inventory growth.
Obviously this is a disappointing development for Fruit of the Loom. I am sure, however, that the Deputies will appreciate that the company must react to the market situation. In all of the circumstances, they have concluded it was better that the necessary corrective action be taken now, by way of short-time working, rather than later when the situation might be far more difficult to correct.
As Fruit of the Loom is the single largest employer in the north-west, the company's decision to go on short-time working will naturally have a significant impact on the entire region, not alone on the workers and their families, but also on the local economy on both sides of the Border.
I am aware that Fruit of the Loom's managing director has written to all of its employees, explaining the position. In addition he has discussed the situation with the union representatives. I understand the company's management will continue to keep everybody apprised of developments.
Deputies will appreciate that this is a trying and difficult time for everybody connected with Fruit of the Loom, management and workers alike. Everybody, including members of this House should work together in the efforts being made by the company to overcome its current difficulties.
I assure the House that IDA Ireland will continue to work closely with Fruit of the Loom during this difficult period and, that the IDA intends to continue to market aggressively the north-west region as a suitable location for additional industrial developments.
I am advised by the IDA that we should enter discussions with the US parent companies, and with Mr. Bill Farrell in particular. I am certainly open to that suggestion. I will obviously be guided, in the first instance, by the IDA and by Mr. William McCarter who is dealing at first hand with this problem. I can also assure Deputy Keaveney there is available to Fruit of the Loom assistance with research and development and product development to assist the company in addressing the problems it faces. The present difficulties are not due to problems with the product but to a downturn in the market compared to expectations. I have already met Mr. William McCarter. I had a special briefing with the IDA today, and I am determined to ensure the IDA does everything possible to assist this company overcome its present difficulties.
The Dáil adjourned at 9.10 p.m. until 10.30 a.m. on Wednesday, 12 June 1996.