I wish to share my time with Deputy Keaveney.
Adjournment Debate. - Job Losses.
Is that agreed? Agreed.
The announcement by Fruit of the Loom was far worse than anticipated. It was generally expected that 800 workers would be made redundant. However, it now appears that the remaining 1,300 jobs can only be guaranteed until the end of next year. As few as 600 of the present workforce of 2,300 can be guaranteed until the end of 2005. Yesterday's announcement was shattering news for the employees of Fruit of the Loom and it has dealt a particularly severe blow to the economic fabric of three towns in Donegal — Malin, Milford and Raphoe. These three small towns will be left with virtually no industrial employment within the next few months.
While our first concern must be with the workers who have been made redundant and their families, we should also realise that ancillary services will suffer from the effects of the redundancies. We cannot overlook the scale of the tragedy. Workers with family and mortgage responsibilities will be left without adequate income and resources to meet their financial commitments, be those a house mortgage, car loan or family education.
The company's handling of the situation leaves a great deal to be desired. Loyal and dedicated employees were left at the mercy of rumours predicting impending gloom since last summer. It has been an over-long death watch. It is our duty to hold out some hope for the future. We must build on what is left to provide a future livelihood to those who have lost out as a result of yesterday's decision. It is essential to retain hope and not sink into despair. We must learn the lesson from similar disasters in other parts of the State.
One that springs to mind is the loss of 800 jobs at the Digital plant in Galway in 1993. The Mayor of Galway at the time, Deputy McCormack, succeeded in establishing a task force. Within six months Boston Scientific arrived in Galway and took over the premises and today more than 1,600 people are employed there. What could be done in Galway in 1993 can, with commitment and dedication, be achieved in Donegal in 1999. We cannot afford to be overly dependent on the labour intensive clothing industry where we can be subject to fierce competition from Third World cheap labour economies. Instead, we must attract modern high tech industries with a longer life expectancy. We already have thousands of young, skilled and educated people in Donegal with the necessary qualifications to take up such positions.
Three initiatives must be taken immediately. First, there must be a comprehensive retraining programme for those who have lost their jobs and require new skills. It should be established immediately. Second, there must be a generous severance and redundancy agreement for those who have been made redundant. Their loyalty and dedication to the company deserves nothing less. Third, Donegal must be a top priority area for the establishment of new industries and the provision of alternative employment. The employment initiative task force already established, must be afforded every possible support to attract new industry to the area. Local companies and enterprise must also be generously supported. Only by adopting such a policy can we attempt to undo the massive damage inflicted on the county by yesterday's announcement.
I thank Deputy McGinley for sharing his time with me. I express my sympathy to the workers and their families on yesterday's announcement of the closure of the plants in Malin, Raphoe and Milford and the loss of more than 100 jobs in Buncrana. I also extend my sympathy to the people in Lifford who have lost their jobs.
This is a black week for north Donegal and for many this will be one of the bleakest Christmases ever. While there is no good time for bad news, laying off people so close to Christmas has been a terribly cruel blow, with which it will take some time to come to full terms.
For all those involved, the priority now must be to focus on the challenge that lies ahead. The workforce is second to none and has the ability to adapt. Every resource must be made available to ensure a skills analysis can be carried out and appropriate training programmes set up immediately. That the Donegal initiative, under the leadership of Michael McLoone is already in place will help to enable positive action to commence straight away. We have seen examples around the country of where task forces were able to get very positive results quite quickly.
Many issues will exercise the minds of the workforce, such as mortgages and redundancy payments. Given the loyal service which Fruit of the Loom has got over the years from people who joined the company straight from school and stayed with it, building up its reputation, it is only just that this is reflected in the settlements reached. I have expressed my commitment to do all I can, and I know this is the feeling of all the public representatives in the locality. I ask that pressure will continue to be brought to bear on all State, Government and local commercial agencies to ensure that every effort is made to deal with the immediate needs and to replace all job losses, both by outside investors and the expansion of existing local enterprises. I trust that in the very near future issues such as access to the north-west will receive a major boost. Support, such as that given by the Minister of State and the Tánaiste, are very helpful and I ask for their continued commitment to all the areas which have lost jobs. I look forward to a more positive 1999.
The announcement yesterday that there will be almost 800 jobs lost in the Fruit of the Loom plants in Donegal is a grave blow to the workers, their families and their communities. I take this opportunity, on behalf of the Government, to express our disappointment at the announcement, coming as it does so close to Christmas, and to stress that everything possible will be done to find replacement jobs and industries for the communities affected.
Recent months have been a very difficult time for the workers in Fruit of the Loom. While the company's announcement yesterday provides no comfort for those who will lose their jobs over the coming months, it has at last dispelled the widespread air of uncertainty about the future of the company's entire operations in Donegal and now enables everyone concerned to focus more clearly on the challenges ahead.
The Government's concern has been at all times to ensure that the maximum number of jobs were retained. The agreement between the IDA and the company means that 1,300 jobs will now be retained at the Buncrana plant until the end of 1999. The additional commitment by the company to retain 600 of these jobs which are connected with fabric production at least until the year 2006 reflects the higher level of capital intensity associated with these activities. The other 700 remaining jobs are in less capital intensive areas and are, therefore, more vulnerable to international market forces. The Tánaiste and the IDA will work with the company and the trade unions to secure the future of these jobs beyond the beginning of 2000 but this will depend very much on international competitive pressures.
There has been some misleading comment about the agreement between the company and the IDA as it relates to grant repayments. The IDA agreement has ensured that the maximum number of jobs are protected and that the company will meet all its outstanding grant liabilities through the job commitments given in this agreement.
I, therefore, refute reports that IDA Ireland had dropped demands for repayment of a £5 million liability in a deal to save the jobs at Fruit of the Loom. There has been no such cancellation.
Fruit of the Loom will repay £5 million to IDA Ireland in January 1999. In relation to the remaining £2 million immediate liabilities, the proceeds from the sale by Fruit of the Loom of the three factories at Malin, Raphoe and Milford will come to the IDA. The remaining outstanding liabilities will continue to be carried by Fruit of the Loom on the basis that they will meet the separate job commitments given in respect of the levels of employment set until 1999 and 2006, respectively.
Others in the House appear to have adopted the contrary stance of arguing that the Tánaiste should not have insisted upon the company meeting its obligations to its workers and to the State, notwithstanding the grants paid to them for employment creation. These criticisms were rejected last night by SIPTU, which emphasised that the Tánaiste was right to adopt a tough stance with the company and to insist on maximising the numbers retained in employment.
On 16 September 1998, the Tánaiste established the Donegal employment initiative to offset and compensate for the expected job losses in Fruit of the Loom. The initiative, which is chaired by the Donegal County Manager, Mr. Michael McLoone, includes representatives from the business community, relevant State agencies and Departments. This is the first intensive effort to put Donegal on the industrial map. The initiative has already received a wide range of submissions from business, community groups and individuals throughout the county. It has met on three occasions to date and has agreed a programme of work to ensure that urgent action is taken to complete the tasks it has been assigned.
In anticipation of the job losses in Fruit of the Loom, IDA Ireland over recent months intensified its promotional programme of County Donegal, in close association with the Donegal employment initiative. The certainty of the closure of the plants at Malin, Milford and Raphoe means the buildings can be marketed aggressively by the IDA and other agencies. That Fruit of the Loom has agreed to maintain the three buildings to a high quality standard and make them available at attractive terms to potential new industrial investors will be of enormous help in attracting new industry. A number of companies have already indicated preliminary interest in some of the Fruit of the Loom facilities.
While it is too early at this stage to predict an outcome, I hope that replacement industry will be secured. The Tánaiste has directed IDA Ireland to do everything possible in all its markets to secure new employment opportunities for the region. Both the Tánaiste and I, along with the IDA, have visited many companies in the United States in the past year. We are confident there will be a positive outcome to our collective efforts for Ireland in general, and Donegal in particular.
I assure the Deputy, and all the people likely to be affected by the job losses, that the Government regards the attraction of replacement industry to County Donegal as a top priority. I thank all the Deputies from Donegal, including the Minister, Deputy McDaid, for their very positive support and unity of purpose. This is a very difficult time for the people of Donegal, the workers in Fruit of the Loom and the families who have been so drastically affected just before Christmas. I assure them that, with our collective efforts, it is hoped we can address this problem in the new year.