Dáil Éireann debate -
Wednesday, 7 May 2003

Vol. 566 No. 1

Written Answers. - Job Losses.

Cecilia Keaveney

Question:

152 Cecilia Keaveney asked the Tánaiste and Minister for Enterprise, Trade and Employment the position in relation to the future of a company (details supplied) in County Donegal; the status of current and former staff; and if she will make a statement on the matter. [11779/03]

Tánaiste and Minister for Enterprise, Trade and Employment (Ms Harney)

Unifi Textured Yarns Europe, Letterkenny, is owned by Unifi Incorporated in the United States, one of the largest processors of synthetic yarns worldwide with annual sales of €1.6 billion and 5,400 employees. In 1999, a number of events led to a flood of lower cost Far Eastern fibre, yarn and fabric into the US and European markets. This was primarily due to the expansion of capacity in the Far East and the Asian crisis of 1998 which caused demand there to drop and led to Far Eastern producers seeking markets in the US and Europe at any price. Unifi and other textile players responded to this increased supply by forming alliances, cuts in plants, employment and capacity to restructure the industry.

In the year ended June 2000, Unifi Textured Yarns Europe experienced a loss of €2.9 million and a further loss of €10.8 million in June 2001. The company responded by addressing inefficiencies and cost reductions, eliminating loss leaders in certain markets and developing a new strategy to secure the future of the operation. This strategy focused on moving the company out of the commodity segment of the apparel market and into higher margin areas – industrial and automotive.

However, according to the company, ongoing adverse market conditions and the need for further cost reductions led to a decision to downsize. The announcement by the company on 24 April 2003 of 250 job losses will lead to employment reducing to 432. The redundancies are proposed to be effected during the period 30 May 2003 to the end of July 2003. Meetings are to take place over the coming weeks between company management and employee representatives to discuss the details.

IDA will continue to maintain close contact with the company and engage with it in its strategy for development and maintenance of the company operations in Letterkenny. FÁS, the national training authority, has already met with the company to discuss a detailed programme to assist the employees to find suitable alternative employment. FÁS will make available its full range of support services, including skills analysis, jobs placement, guidance and counselling interviews, identification of training needs and suitable training courses.