Dáil Éireann debate -
Tuesday, 25 Jun 2002

Vol. 553 No. 5

Adjournment Debate. - Job Losses.

Mrs. B. Moynihan-Cronin

I thank you, a Cheann Comhairle, for giving me the opportunity to raise this important matter. While I am disappointed the Tánaiste and Minister for Enterprise, Trade and Employment is not present, I welcome the fact that the Minister for the Environment and Local Government is replying to the debate.

I want to raise with the Government the unemployment crisis in Killarney, County Kerry. On Friday last, Sara Lee, which manufactures women's sports underwear, announced that it was to lay off 104 employees. This represents a loss of about 55% of the total workforce at the plant and was a major shock to the men and women concerned and their families. Nobody expected losses on such a substantial scale. Friday's announcement came just two and a half years after the great news that Sara Lee was to take over the old Pretty Polly factory in Killarney in January 2000. This was a tremendous boost to the people of Killarney who had looked at the locked gates of Pretty Polly for five years. The Pretty Polly plant had employed 850 people at its peak in the early 1990s before going into decline and closing in 1995.

The losses at Sara Lee last week came after a number of other redundancy announcements in the town in recent months. A couple of weeks ago the Liebberr crane manufacturing plant announced that it would lay off 60 temporary fitters, welders, electricians and general workers by the end of this month. In addition, the ALPS electronics plant, which employs 300 people in Killarney, is shutting down and moving its entire operation to Millstreet, County Cork.

There has been a litany of other job losses in south Kerry in recent months and years. The list is substantial: Transmould Electronic, 25 jobs; Wilson Socks, transfer of approximately 100 jobs from Caherciveen to Tralee; Vantage Wholesale, 30 job losses; Cadburys, Rathmore, 23 job losses. The list goes on. Furthermore, Kerry County Council is threatening to lay off all temporary staff while the Tánaiste is making huge cutbacks on community employment schemes, all of which will lead to hundreds of people in Killarney and south Kerry facing the dole queues at a time of economic decline.

To compound the crisis in industrial unemployment in the Killarney area in recent times, there is also a very acute unemployment problem in the tourism industry in the region. Local tourism industry representatives have said the number of visitors to County Kerry in the first six months of the year was down by 20%. This has the knock-on effect of putting many seasonal employees out of work and huge pressure on bed and breakfast establishments and guesthouses which are facing major financial pressures in the current year. Does the Government have proposals to deal with the unemployment crisis in Killarney? I call on the Minister for Enterprise, Trade and Employment to visit Killarney and to meet with the trade unions and local elected representatives to discuss this situation. I further call on her to establish, as an immediate priority, an unemployment task force to examine ways in which new industries can be attracted to the town. The Government has sat on the fence with regard to rising unemployment in Killarney and in south Kerry in general, for the last number of years. It is high time Ministers got off the fence and did something about it.

Minister for the Environment and Local Government (Mr. Cullen)

The Minister for Enterprise, Trade and Employment wishes to assure the Deputy that the Government is committed to ensuring the most equitable regional distribution of job opportunities and she has impressed on the industrial development agencies – IDA Ireland and Enterprise Ireland – the crucial importance of making even greater efforts to provide employment throughout the country. Both IDA Ireland and Enterprise Ireland are structured on a regional basis so as to facilitate a more balanced regional distribution of jobs.

On 21 June 2002, Sara Lee announced that it plans to restructure its operations in Killarney. These changes will result in a workforce reduction of 104 employees, as Deputy Moynihan-Cronin has said. The restructured Killarney operation will employ 82 people and cater to the high value-added market segment which the company believes can be supplied on a profitable basis from Ireland. The company has advised that the redundancies are necessary as part of a restructuring plan which it is hoped will return it to profitability. The lay-offs will take place immediately.

The company stated that the market for seamless underwear has changed dramatically in the last 18 months whereby it has become far easier for low cost countries to compete. This shift in the market makes it increasingly difficult for the Killarney operation to remain competitive. The company's forecast for the year ahead predict that there is no foreseeable pick-up in the market for the basic low cost product which has been in decline since last year.

Commencing this week the company will hold meetings with SIPTU and other groups to agree the details and timing for these changes. Sara Lee will be providing termination packages to those affected and will also assist with job placement.

The Minister expressed her disappointment last Friday, 21 June, at the announcement of the job losses at the plant and said the most immediate task was to ensure the maximum personal support for those affected by the announcment. FÁS contacted the company last Friday when the announcement was made. When the timing and profile of the job losses are finalised the agency will offer its full range of services to those affected.

ALPS Electric (Ireland) Limited has two plants in the area, one in Killarney and the other in Millstreet, 20 miles away. The company has decided to consolidate its two plants in Ireland into one location, moving its Killarney facility to Millstreet. The consolidation of the plants is pro ceeding, is ahead of schedule and is expected to be complete by the end of July 2002. To date, 30 staff have transferred from the Killarney plant to Millstreet and the remaining staff will transfer at the end of July when the company returns from its summer shut-down. To date, only five staff have left the company since the consolidation announcement. The company expects to achieve significant gains in efficiency and productivity once the consolidation is complete and has indicated that it plans to grow its overall numbers once it consolidates into one location.

When it becomes vacant IDA Ireland will actively market the Killarney premises to other suitable inward investment projects. The recent thrust of IDA Ireland has been towards regional and sectoral development and to consolidate the existing base of overseas companies. The agency has been encouraging new prospective investors involved in higher value industries to locate outside the major cities and, in particular, to locations that have not seen the emergence of modern industries. Many issues influence the locations chosen by new investors, but competitiveness, the quality of access and infrastructure and the availability of skilled workers will be crucial factors in achieving better regional development. The agency's strategy is currently concentrating its efforts to attract projects to the larger provincial towns and also addresses the need to increase the value and sustainability of overseas companies already established or about to establish in Ireland.

IDA Ireland is currently actively engaged in promoting south County Kerry as a suitable location for inward investment. Employment in IDA Ireland assisted companies has risen steadily over recent years from 1,023 in 1996 to 1,771 at the end of 2001, an increase of 73% over the past five years. This includes a net increase of 166 jobs during 2001, which has been generally acknowledged as a difficult year for the Irish and global economies.

Employment in Enterprise Ireland client companies in south Kerry has also risen steadily over recent years from 1,004 in 1996 to 1,989 at the end of 2001, an increase of 98% over five years. This includes a total of 108 new jobs created during 2001. These gains have been spread over a number of sectors, including international services, food and industrial products. A number of projects have been approved for the south Kerry region during the first quarter of 2002, which will result in a number of new jobs being created in the coming years. This should confirm to the Deputy that much has been happening in south Kerry in the last few years.

A number of Enterprise Ireland companies are operating in the Killarney region, including the Monex Group, Killarney Milk Products Limited, Killarney Plastics Limited and a number of other smaller companies. In addition, FEXCO employs over 750 people throughout the south Kerry region. There are no major job losses anticipated in Enterprise Ireland client companies at this time in the south Kerry area.

The provision of quality office and industrial premises on high quality business parks in key centres is being undertaken by IDA Ireland working in partnership with local authorities and the private sector. This is recognised as being essential to attracting new greenfield investment to the regions.

In this regard, IDA Ireland completed an upgrading project for the landscaping in the agency's Killarney business park in late 2000. Killarney Plastics Limited has developed a 1.3 acre site and constructed a 35,000 sq. ft. factory unit and Killarney Advance Factory Limited, a company approved under the BES scheme, has begun site development work for the construction of a 20,000 sq. ft. commercial building on a site still owned by IDA Ireland.

The Minister is confident that the measures outlined above, which are currently being adopted by IDA Ireland and Enterprise Ireland, as well as the continuing commitment of the Government to regional development, will bring further positive results to Killarney. She will continue, along with the industrial development agencies, to promote Ireland and its regions for suitable industrial development projects.