I wish to share my time with Deputy McManus.
Adjournment Debate. - Job Losses.
Is that agreed? Agreed.
I urge the Minister of State to depart from his prepared script and respond to some questions and concerns I wish to raise, not only about the announcement that has been made, but also the way it was made. At 8 a.m. today workers at IFI learned of their impending fate from the Internet website of a British newspaper. At noon the company denied the report. Yet, at 4 p.m., management at the Cork plant in Marino Point told workers that the board of directors had met and made a decision that the company was due for closure. Does the Minister find it acceptable to treat a workforce in this way, particularly in a company that is 51% owned by the State? As the company's trustee, the Minister has guardianship of the majority shareholding but she has played hard and fast with the workers' emotions. In recent weeks hope was given when, in fact, despair was the inevitable outcome.
The IFI plant at Marino Point has been enduring a lingering death due to Government under investment which meant the plant could not be brought up to speed in terms of health and safety requirements and environmental safeguards. If such investment had been made, not only would the plant be viable but the 200 jobs at Marino Point would have been secured. These jobs have been lost in the last traditional heavy industry in the Cork Harbour area. Jobs have already been lost there in Irish Steel, Irish ISPAT and the Verolme Cork Dockyard.
Government negligence has been further compounded by the inevitability of this closure being known well in advance, yet no Government plan was put in place to provide alternative jobs prior to such an announcement. On these grounds the Minister and the Minister of State should apologise to local people for the decisions they have made.
The Minister should indicate what safeguards exist for the workers who lost their jobs today. As a semi-State company, will its workers receive standard redundancy payments or a protected level of redundancy? What is the role of the other shareholder, ICI in Britain, with regard to the future of IFI? Will money be provided to deal with the considerable contamination that exists at each of the IFI plants? Has an analysis been undertaken of the cost of closing down the plant compared to the cost of keeping it up and running with proper environmental and health and safety requirements in place?
The Government has been playing a game with the community of Cork Harbour, including Great Island, and most particularly the IFI workers and their families. The decision to close the plant will have major reverberations in the Cork area, as well as the other areas in which the company operated, including Arklow and Belfast. We must ask what implications this decision will have for cross-Border and cross-community relations.
We are not seeking a bland statement prepared by a civil servant. We are seeking concrete answers as to how this situation has come to pass, what safeguards exist for the workers' future and whether the Government is prepared to take responsibility for having brought about this situation. The blame lies firmly with the Government which holds a majority shareholding in trust for the Irish people, yet it betrayed that trust to the detriment of all concerned.
I thank Deputy Boyle for sharing his time and thus allowing me to speak about the jobs losses in Arklow in my constituency. It is regrettable that the Minister is not present in the House for this Adjournment debate. The announcement concerning 620 jobs losses was made in a terrible manner. The board announced without warning that it was seeking liquidation approval from the Government. The loss of 200 jobs in Arklow is a major blow to the town which historically has been an unemployment blackspot. IFI operated as an employer during the dark days and the good times, but this devastating announcement has been made overnight. The announcement was not made in the boardroom of a multinational company because the decision ultimately rests at the Cabinet table. Even at this late stage, the Minister could sit down with the company and work out a deal. That is unlikely to happen, however, because the political commitment to secure these jobs clearly is not there.
I want to hear answers to key questions. What will happen to the IFI workers? Most of these men are highly skilled and have been in work for a long time. They are not the kind of people who can easily find alternative employment. Will they receive a good and fair severance package? Historically, good deals have been struck in the company when people were made redundant. Many people have been made redundant at IFI over the years. We want a guarantee that these people, who suddenly find themselves unemployed as a consequence of this decision, will receive fair treatment. The company put forward various proposals, including seeking a loan to get it over a bad patch, but today's news has been shocking. The workers should be treated with respect. They should be given a package which recognises the circumstances in which they find themselves.
What commitment will the Minister give to ensure that the IFI site in Arklow will have a future as an industrial plant? Jobs must be created to replace those that have been lost in the town.
IFI is jointly owned by ICI, with 49% of the company, and the State through Nitrigin Éireann Teoranta (NET) holding 51%. As the Deputies are probably aware by now, the board of IFI decided today that it could not continue trading and has recommended the appointment of a liquidator.
Having effectively lived next door to IFI since it first went into operation – as well as being able to count among my friends and neighbours many of the IFI employees in Marino Point – today's announcement comes as a personal disappointment. It is obviously a matter of extreme disappointment that, despite the efforts of all those involved – including the workers, the worker directors and the management – it has not been possible to find a solution to the severe financial difficulties at Irish Fertilizer Industries. Clearly, this will be devastating news for the workforce, their families and the local businesses involved.
The Minister and I will be taking steps immediately to ensure that everything possible is done to assist those concerned to find alternative employment as quickly as possible. FÁS, the IDA and Enterprise Ireland will immediately examine what needs to be done in Cork and Arklow, with the priority being to provide whatever retraining might be necessary, and to seek alternative investments for these areas.
My Department has also been in contact with the Northern Ireland authorities regarding the Belfast situation. The company operates in a volatile market which is going through a tough trading period. The market is plagued by considerable levels of over-supply resulting in poor prices, while costs remain high. The company experienced significant losses in the past year, around €35 million, and, despite the identification of a number of significant cost savings as part of recent efforts to save the company, it was still not possible to establish a basis for a viable future.
The Government, through NET and ICI as joint shareholders, has been supportive of the company, including by means of the provision of €34 million in recent years. Since inception in 1961, the value of Exchequer support for NET and IFI has amounted to nearly €750 million in present day terms.
Unfortunately, since its inception in 1987, the company has struggled to deliver a commercial rate of return and, as a result, it now requires large borrowings just to fund day-to-day operations. These borrowings are on top of the €200 million in debt which was retained by NET at the time IFI was established in 1987. The debt retained by NET had risen to over €250 million by 2001 when most of it was taken over by the Minister for Finance.
While a recent request for funding was submitted to the shareholders, the additional funding sought would not – even on the basis of the company's plans – have established a viable basis for going forward. Instead, the objective was to enable the company continue trading for a number of months. The company believed that it might be possible to dispose of the assets of the company for a higher price at a later stage. The shareholders considered that the plan was extremely fragile and that even minor shocks would have, yet again, made the company's position untenable. Accordingly, they did not have confidence in the plan and, contrary to the misleading impression given in the article in The Guardian, both sides were agreed that the provision of further funding in such circumstances could not be justified. I can also confirm that the suggestion in The Guardian that some form of trade sale was on the cards is inaccurate. Efforts made in recent months, on behalf of the shareholders, did not attract any prospective buyers for the company.
At this stage, the focus will have to move to ensuring an orderly wind-down of operations. Both shareholders will, of course, co-operate fully with the company and the liquidator in an effort to ensure that process can be as smooth and efficient as possible.
I am surprised at Deputy Boyle's barefaced hypocrisy. Only a few months ago he was looking for the closure of that plant.
The upgrading of the plant.
To make that speech this evening was outright hypocrisy.