Dáil Éireann debate -
Tuesday, 2 Mar 1999

Vol. 501 No. 3

Adjournment Debate. - Job Losses.

Mr. Rabbitte

I thank the Chair for allowing me to raise this important matter which we should have been permitted to raise by way of private notice question because of the necessity to get answers from the Tánaiste who regrettably is not present but is represented by the Minister of State.

This is one of the worst industrial disasters, in terms of local impact, in recent years. The impact has been aggravated by the manner of decision making and communication to a loyal workforce. The decision was a bolt from the blue. Shop stewards had intuitively picked up something in the wind last Friday but no information was forthcoming. On Monday morning local management stunned the workforce by making this final and completely unexpected announcement.

Today's newspaper coverage makes harrowing reading. Industrial crises are invariably painful but it is unforgivable on the part of the company to announce the termination of the employment of a loyal, long serving workforce in this fashion. It is difficult to believe that any reputable senior management, notwithstanding being based outside the country, would handle so-called reduction in demand for its products in Portarlington in this manner in a plant where the good industrial relations were acknowledged by all.

My colleague, Senator Pat Gallagher, has posed the question which everyone in Portarlington wants to hear answered. When did the Tánaiste learn that all was not well at Avon Arlington? When was she informed that the plant would close? Why was the main trade union concerned, SIPTU, not advised of the imminent disaster?

It is difficult to conceive that the Government was not made aware of the imminent closure of a plant which has such local significance. The early warning unit in the Department is still functioning. Did it not know that there were problems on the horizon and, if so, what action was taken? What actions did the Tánaiste take with the IDA? What contacts took place with the corporate management? Did the Tánaiste meet the company about the problems on the horizon and, if not, why not?

This is a devastating blow for Portarlington and its surrounding hinterland. The cessation of Odlums, Bord na Móna, the local ESB power station and Butlers Engineering have all preceded the departure of Avon Arlington. No town can absorb this sequence of job losses. Three hundred people were employed full-time and up to 200 in an ancillary capacity. The devastation is more serious since in many cases there is more than one employee per household.

Almost by stealth a number of serious closures or major redundancies have happened in the past year or so. The scale of the losses in Clonmel, Donegal, Killala and Portarlington is alarming and demonstrates the fragility of some of our apparent success. The situation may not have attracted the attention it warrants because of general economic buoyancy but it is proving difficult and will continue to prove difficult to replace stable, long established jobs in the areas so badly affected.

The Tánaiste is becoming the Minister for task forces. We wish them well. In the interim those hurting in Portarlington will want to hear answers from the Tánaiste how this disaster crept up on her. I am sure she has good reasons for not being present in the House. I ask the Minister of State to apply his mind to giving us answers rather than reading out a deadpan script. It is regrettable – I mean no disrespect to the Ceann Comhairle's office – that this important issue was not handled by way of a private notice question. Reading out a script is not the way to deal with something as serious as this.

I hope the State is assisting the trade union involved, SIPTU, to negotiate the redundancy package and that the infrastructure is being put in place to advise the workers of the way around the obstacles in their path.

Mr. Flanagan

The loss of 265 full-time jobs and a further 150 casual workers is a cruel blow for the people of the Midlands. The widespread shock and deep sense of disappointment has shaken the community to the core. I acknowledge the reaction of the Tánaiste, her visit today to the plant in Portarlington and the announcement of a special task force under the chairmanship of the Laois county manager, Mr. Michael Malone. I wish the team well in its endeavour but it will need the care and attention of the IDA and officials of the Department of Enterprise, Trade and Employment at the highest level if it is to succeed. There are now three special and urgent task forces charged with the responsibility of job creation as a fire brigade operation in the Midlands. It was with much irony that the first meeting of the task force took place tonight in Portarlington in the same room where public representatives, myself included, met the Tánaiste in December to impress on her the poor job situation in County Laois which was almost in crisis before this week's shocking news.

Even without the job losses at Avon Arlington there are just under 1,000 people unemployed and signing in Portarlington, over 1,000 ten miles away in Portlaoise and 800 in Rathdowney. The stark reality is that the Government and State agencies in particular have failed the Midlands and County Laois. We have watched with envy as announcements and initiatives on jobs are made week after week with no reference to County Laois. The IDA's annual report shows the Midland region bottom of the national league and County Laois bottom of the Midlands league. In premiership parlance, County Laois is towards the bottom of the Vauxhall Conference.

Today's disbelief and shock throughout north Laois and east Offaly will rapidly be replaced by anger and despair on the part of my constituents unless real and positive progress is reported as a matter of extreme urgency. The plant in Portarlington was in being for 23 years and was placed in the town to soften the blow of huge job losses in Bord na Móna and the ESB as well as traditional locally based industries that collapsed in the milling and textile area. Much of the workforce in Portarlington is drawn from the rural villages of Bracknagh, Geashill, Walsh Island, Cloneygowan, Ballybrittas, Emo, Rosenallis and Clonaslee where there is no alternative work or career prospects. The only news they are waiting for is what is happening in Brussels about CAP reform.

Why did the early warning system in the Department not signal this catastrophe as rumours of an impending closure circulated in the area last year? What contact was made with the parent company? Why did no one in authority visit the United States to mount a salvage operation? Was it known to the Tánaiste that operations by the parent company in Poland where labour costs are cheaper would put the Portarlington plant in jeopardy? The parent company is solvent and thriving and alternative product lines might have been explored. It appears closure is accepted with no prospects of saving any of the 400 jobs. Unlike the multinational job losses in urban areas – Deputy Rabbitte's constituency being one – there is no urban mass to absorb the fall-out. Portarlington has a population of 5,000 with the aforementioned villages having no more than a couple of hundred families.

Four points must be considered. An attractive and acceptable redundancy package must be set in place to alleviate the economic hardship inflicted on the workforce by the loss of a wage packet. The company can afford such an arrangement and it must be delivered. It is acknowledged by Avon Arlington that the workforce has at all times been dedicated, committed and flexible. Excellent working relations had been established between management and SIPTU. This has been acknowledged by the parent company. A firm of professional career consultants should be engaged without delay and based in Portarlington to prepare an out placement programme for employment and assist with the preparation of CVs, interview skills, etc.

FÁS must prepare a skills audit without delay, not only for the town of Portarlington but the surrounding areas of north Laois and east Offaly so that a potential investor can be aware of the skills in the area. If there is a deficiency resulting in a less than attractive workforce, this should be set right by proper and adequate training programmes as a matter of urgency.

Every effort must be made to provide a replacement industry, whether by way of investment in the Avon plant or otherwise, and a firm timeframe must be placed within which the task force must report.

Counties Laois and Offaly cannot absorb job losses on such a scale. With an already higher than average jobless rate, the term "crisis" is no exaggeration. I wish the task force and the Minister well in their endeavours. The people of Laois and Offaly await a positive and active response sooner rather than later.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

The Tánaiste asked me to take the Adjournment Debate tonight as she is unable to return on time from her visit to Portarlington this afternoon to meet with the management, workers and trade unions of Arlington (Avon) Limited and to address the first meeting of the task force.

I, too, was greatly disappointed at the yesterday's announcement by Avon Products, Inc., that its subsidiary, Arlington Ltd., will close its Portarlington plant in County Laois at the end of April with the loss of 265 permanent and 80 seasonal jobs. It comes as a great shock, both to the employees and the people of Portarlington and County Laois. Over the last 25 years, Arlington Ltd. has been a major employer providing high quality employment in County Laois.

Arlington Ltd. was established in 1974 and was subsequently taken over by Avon Products Inc., New York, in 1977. It is engaged mainly in the manufacture of jewellery and, to a lesser extent, cosmetics, soap and aerosols.

The first indication of the impending closure was on Wednesday, 24 February 1999, when the Tánaiste met the Irish management of the company and Avon's decision to close the Portarlington plant was disclosed. While the possibility of saving these jobs was discussed, the company explained that it has evaluated and analysed all possible options in attempting to avoid closing the plant and that its production volumes of jewellery have been steadily decreasing since 1991. Since then, total production has reduced from 10 million units to last year's 2.6 million units. Avon's market share continues to decline due to competition from developing markets and there are no indications of a reversal in this trend. Avon's only other jewellery manufacturing facilities in Puerto Rico and the Dominican Republic have also been negatively impacted and last year the company was forced to close two of its three production facilities in those locations. To compound this, demand for soap, which is also manufactured at Arlington, has also been decreasing, from 16 million units in the early 1980s to less than 4 million units in 1998, with continuing decreases forecast for 1999.

Notwithstanding this decline in the market, Avon had continued to invest in Arlington, adding new production systems and equipment as well as the addition of new product categories. However, these categories do not generate sufficient revenue or sufficient full-time employment to justify maintaining the production facility.

Avon has stated that the unavoidable decision to close Arlington in no way reflects on the ability of the workers. The company has praised the outstanding relationship it has had both with its workforce and with the local community. Avon is acutely aware of the impact this decision will have on the local economy and particularly the people of Portarlington. For this reason, and for the sake of the workforce, Avon has undertaken to work with IDA Ireland and other Government bodies to minimise the impact on employees and on the community.

I can assure the Deputies and the House that IDA Ireland, for its part, is actively pursuing a strategy to increase employment in County Laois. As part of the agency's marketing efforts to enhance the attractiveness of the county for inward investors, it entered into a land swap with Laois County Council in 1997. This resulted in the establishment of a new 45-acre business and industrial park by IDA Ireland on Mountrath Road, Portlaoise.

At the end of 1997, IDA Ireland invested approximately £500,000 for the provision of all the necessary services and landscaping to enable the park to be established as a quality location to compete for overseas mobile investment. At the same time, IDA Ireland issued a BES certificate to private developers for the construction of a 20,000 square foot unit at the park, and construction of the new facility commenced in October 1998.

The availability of this new business and industrial park and an advance factory facility is critical to IDA Ireland's marketing programme for inward investment to the area. With this new facility coming on stream in the very near future, IDA Ireland will concentrate its efforts on securing a client for County Laois at the earliest possible stage.

Enterprise Ireland is also active in the region. Three proposals for expansion in Midlands Furniture Ltd., Independent Microlabs Ltd. and Irish Dairy Services Ltd. were approved by Enterprise Ireland in 1998 which will create a total of 50 new jobs. In addition, the natural resource sector is strongly represented in the county. Laois Sawmills, Portlaoise, supplies timber products to the furniture and horticultural sectors and Vasa Ltd., Stradbally, produces mink pelts, utilising the waste material from the poultry industry. The purchase by South of Ireland Asphalt Company of the former assets of Butler Engineering Ltd. and Butler International Portarlington is reviving the fortunes of the steel industry in the north of the county and building on the skilled workforce already in place. SIAC is also providing advance industrial space for new and existing enterprises wishing to set up in Portarlington.

In addition, the Laois County Enterprise Board has created over 600 jobs over the past five years. The board organised a unique enterprise exhibition for County Laois last year. This exhibition was a clear statement of both the quality and quantity of local enterprise throughout the county and shows that indigenous industry is thriving in County Laois.

Notwithstanding the ongoing efforts of the agencies, in view of the impending closure of Arlington and the significant job losses involved, the Tánaiste has ordered an immediate response to the company's announcement with the establishment of a task force. The task force will be chaired by Mr. Michael Malone, Laois county manager, and comprise representatives of IDA Ireland, Enterprise Ireland, FÁS, Laois County Enterprise Board, SIPTU, IBEC and local industry.

The company has undertaken to work closely with the task force to assist the workers in exploring the most suitable education, training, employment and enterprise options available to them. The company will co-operate with IDA Ireland in arrangements to market the suitability of the plant for a replacement industry.

The Tánaiste met representatives of the workforce and their trades union representatives today. She also met the task force to impress upon it at first hand the urgency of its task.

The terms of reference for the task force will be to secure alternative job creating enterprise, both from overseas and indigenous investors for Laois; to provide an immediate skills assessment and suitable training opportunities for the affected workers; and to provide the necessary information and assistance to any employees who may wish to establish their own enterprises.

The chairman of the task force has been asked to liaise with public and private sector and community bodies which can assist in promoting the area for investment and job creation. FÁS, in conjunction with the company, trades union representatives and Laois County Enterprise Board, will commence an immediate intervention programme to provide assistance to employees, that is, job seeking skills, interview techniques, early retirement advice, investment opportunities, CV services and counselling; to establish the skills pool which is available to new investment; and to assess skills of workers to be laid off and assist employees with training and re-training, identification of job opportunities, job skills requirements and opportunities for self-employment.

This announcement is clearly a major blow for the workforce and for the area generally. I am hopeful that the work of the task force and the generally positive situation of the economy will lead to early re-employment of the people concerned. I thank all the local Oireachtas Members for their personal concern and absolute attention to this sad industrial catastrophe since it was announced. On behalf of the Tánaiste, the Government and all of the State agencies reporting to the Tánaiste and our Department, I assure the House that we will do our utmost to redress the position as quickly as possible.