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Dáil Éireann debate -
Thursday, 8 May 2003

Vol. 566 No. 2

Other Questions. - Job Losses.

Breeda Moynihan-Cronin


9 Ms B. Moynihan-Cronin asked the Tánaiste and Minister for Enterprise, Trade and Employment the specific plans she has to help find replacement jobs for the 250 workers who are to lose their jobs at the Unifi plant at Letterkenny, County Donegal, in view of her statement of 24 April 2003; and if she will make a statement on the matter. [12275/03]

As I have stated previously, I was very disappointed at the company's unexpected announcement that it is to reduce its workforce by 250 persons at its Letterkenny facility in Donegal because of difficult market conditions and continuing efforts to reduce costs. The redundancies are proposed to be effected during the period 30 May 2003 to the end of July 2003. Meetings are to take place during the coming weeks between the company's management and employee representatives to discuss these matters in detail.

IDA Ireland will continue to maintain close contact with the company's representatives and will engage with them in their strategy for development and maintenance of their operations in Letterkenny. FÁS has already met with the company to discuss a detailed programme to assist the employees to find suitable alternative employment. Enterprise Ireland also met with the management of the company, on 29 April, to provide information on supports available to staff who may wish to explore the possibility of starting their own business.

Letterkenny has been a priority area in recent years for the State agencies under the auspices of my Department. Working together with local authorities and Letterkenny Institute of Technology, a significant amount of work has been undertaken to improve its attractiveness for investors. The recent decision to select Letterkenny as a gateway under the national spatial strategy will assist in promoting Letterkenny further.

A key development for Letterkenny is the construction of a new IDA Ireland 80-acre business park, which is nearing completion, and the availability of new, advanced buildings. This activity has resulted in an increased level of visits by potential investors and a number of companies are in active negotiation. Successful companies such as Prudential and PacifiCare continue to grow and both are actively recruiting in Letterkenny at the moment.

I am confident that the ongoing commitment of Government and the State agencies to regional development and the Objective One designation of the north-west, which facilitates the payment of much higher grant levels in the BMW region, will bear fruit in attracting additional overseas and indigenous investment to Donegal.

Does the Tánaiste accept that the textile industry is a very vulnerable sector in the economy? What mechanism does she have for liaising with vulnerable manufacturing sectors to ensure that such redundancies can be avoided? Does she further accept that peripheral regions – including Letterkenny, Wexford or any other area that is far from the centre – must be supported and that this means that the spatial plan must be implemented? Will infrastructural requirements, such as road, rail, water supplies and broadband roll-out, be funded? Further to their recent comments, both the Tánaiste and the Minister for Finance made a mistake last year in arguing that it was wrong to borrow for infrastructure. That mistake should now be rectified.

Like Deputy Rabbitte, Deputy Howlin is inaccurate in recalling what I said last year.

I checked it out and I also checked out what the Tánaiste said this morning.

No. I have sent Deputy Rabbitte a copy of our manifesto, in which we specifically said we believe in borrowing for infrastructure.

The Tánaiste accused us of having tax and spend policies.

Yes. It was the fact that the Deputy's party wanted to increase taxes on work which incensed me.

The Tánaiste has increased taxes on work since the last election.

No Government has lowered taxes more than that which holds office at present.

Will the Tánaiste fund the required measures?

Will the Deputy listen to the answer?

Please allow the Tánaiste to continue without interruption.

It is true that the textile industry is very vulnerable, not just here but also in Europe and other developed economies such as the United States. The textile sector has become vulnerable to very low-cost economies. Notwithstanding that, however, a number of textile companies here are increasing their employment numbers, in some cases by out-sourcing manufacturing and keeping the higher end of the business in Ireland. I recently visited a company in Cork whose employment is growing because of that strategy and the same applies to other companies who are pursuing that strategy through Enterprise Ireland.

I agree that we need to invest in infrastructure. It is probably one of the most important things we can do to open up the whole country, which is small but it takes forever to get from one end of it to the other due, in particular, to an inadequate road infrastructure.

Then do it.

I wish to offer my sympathy to those who have lost their jobs. Unfortunately, it is becoming a regular occurrence. At one point, an early warning system was in place for the textile industry, so why was this an unexpected announcement? I hope that the new legislation on redundancy payments will apply to the people affected in this case. I would like to think that those who are retaining their jobs on the basis that they take a cut in their wages will get every support from the agencies to maximise the opportunities they may have. The State agencies should move in to ensure that the maximum number of jobs can be maintained for as long as possible. I reiterate the point I made on a previous occasion – many of our problems in the north-west could be dealt with at a cross-Border level if the Executive was up and running.

The Deputy should ask a question.

We cannot deal with Ministers in the North as a consequence of the Executive not being there. Will the Minister ensure that the two Governments work together to develop the broadband, roads, rail, ESB and gas facilities that are needed to provide opportunities in the Border region? Alternative sources of funding, such as INTERREG, which are not available in other parts of the country, should be used.

The Deputy's minute has concluded.

Those of us in the north-west are used to the decline of the textile industry. Will the Minister ensure that there is as much co-operation as possible to maximise the opportunities presented by the fact that we have a workforce that would be hard to match anywhere else?

It came as a surprise because the rumours that there would be job losses at the company had been denied by it when it was contacted by IDA Ireland shortly before the announcement on 24 April. In relation to redundancy, a Bill will be discussed in this House on Friday week. I know that the Bill is generally supported across the House and I expect that it will be in force by the end of May, which is when these workers are to be made redundant. That is certainly the intention.

Does the Minister believe that the international trade in textiles is fair or just, when the workers in developing Third World countries who are being used in the out-sourcing to which she referred are earning about €1 per day? Does she consider that to be fair trade and fair competition?

Of course it is not a fair return for one's effort.

That is what is happening.

I do not know if the figure cited by the Deputy is correct, but I am aware that paltry sums of money are being earned even by people with very high levels of skill. Software engineers work for €5,000 or €6,000 per year in places like India. Such statistics will change over time, but it will not happen quickly. We will have to face other competitiveness issues after the changes take place. The reality for the Irish economy and for companies like the one in Donegal that was mentioned is that we have to develop our skills base and to increase value-added activity, as it is known in the jargon, to justify the higher earnings acquired for labour in this economy, which we all support.

I was hoping to reach a later question, but it does not look like we will do so. I am interested in the Minister for Enterprise, Trade and Employment's reply to Deputy Keaveney in relation to the application of the new redundancy legislation. I ask the Minister, Deputy Harney, to take this opportunity to correct the inadvertent—

I am afraid we are going outside the realms of the question before the House.

I will ask a question that relates to it. The Minister has said that the Redundancy Payments Bill will apply to this set of workers, but she has also told the Dáil that it will not apply to the Comerama workers.

Deputy Howlin, Question No. 9—

She made commitments to the workers there. I have it in writing from a representative who attended that meeting.

—refers to job losses in Letterkenny, County Donegal.

Will the Minister take the opportunity to correct the record?

Sorry, Deputy, it does not apply.

She told the Dáil this morning that she made no such commitment, which is simply not true.

Does Deputy Hogan wish to ask a supplementary question?

Will the Minister—

Sorry, Deputy, it does not arise on Question No. 9.

It most certainly does as it relates to redundancy legislation.

I understand that there will be an opportunity to discuss this matter next Friday.

What will we be able to discuss next Friday?

I call Deputy Hogan.

The Chair allowed the Minister to answer Deputy Keaveney's question on the Redundancy Payments Bill and I am asking a similar question about the same legislation. Will retrospection apply to other workers? The Minister said in her reply to Deputy Keaveney that it will apply to workers in that instance. Will she correct the misinformation she gave the House this morning?

The Deputy has made his point. I call Deputy Hogan.

Will you allow the Minister to answer my questions?

Sorry, it is almost 4.45 p.m.

A Cheann Comhairle, there was no misinformation.

Yes, there was.

I ask the Minister to take a brief question from Deputy Hogan and then she may answer both questions.

In light of the many job losses in County Donegal, particularly in the north-east of that county, will the Minister for Enterprise, Trade and Employment discuss the fast-tracking of some of that county's infrastructural requirements with her Government colleagues? Deputy Keaveney has argued that improvements are needed in relation to many public utilities, roads and access requirements in County Donegal to attract new investment and new industry to replace the jobs that have been lost.

It is clear that Deputy Howlin was not listening to me as I said in my reply to Deputy Keaveney that the redundancies she mentioned are due to take effect from 30 May.

As I expect that the legislation will be in force by then, it will apply to the workers in Donegal. It will apply.

What about the Minister's previous commitments to others?

Allow the Minister to finish.

It is on the record.

Deputy Howlin, please.

One thing I will not stand accused of is lying to anybody. I said to those workers and others that it was my wish, if I could—

I spoke to them in the past couple of hours.

Deputy Howlin—

Did the Deputy speak to the trade union officials who negotiated the agreement?

I spoke to Mike Jennings.

Deputy Howlin—

He asked me to use his name.

Deputy Howlin, I ask you to be quiet while the Chair is on its feet. The Minister was asked a question and the Chair allowed it. The Minister is entitled to reply without interruption and she is entitled to put her contribution on the record of the House in the same manner as any other Member.

She is not entitled to mislead the House.

It is wrong of you to frustrate any Member of this House who is trying to put a contribution on the record.

She is not entitled to give inaccurate information.

I sat at a meeting with Mr. Jennings yesterday and he did not so accuse me. I assure the Deputy that I cannot break the law or undermine the Constitution. It is not in my power or in the power of the Government—

Deputy McGuinness has circulated the letter as well.

—to make this retrospective.

The Minister gave a promise.

That is the law.

Deputy Howlin—

I did not promise it, but I said that—

They are all wrong except the Minister.

No. My officials were present and took the minutes of the meeting. I am certain of what I said. The only undertaking I gave the workers was "if I could, I would".

Deputy Howlin, allow the Minister to speak.

I am not saying anything.

The reality is that I cannot do so. Deputy Howlin should stop playing politics with this matter.

Hear, hear.

That is an outrageous charge.

If I could, I would, but I cannot do it.

It is outrageous.

When the recent negotiations were under way, the trade union movement was left in no doubt? It was told that it could not be retrospective.

The Minister gave a commitment to Deputy McGuinness in writing.

Sorry, Deputy—

I am not Deputy McGuinness. I know the commitments I make and I stand over them.

Is Deputy McGuinness wrong?

Allow the Minister to continue without interruption.

I know the commitments I make and I stand over them. I attended a meeting yesterday with both of the gentlemen mentioned by the Deputy and they certainly did not take issue with what I said when that matter arose.

We will return to it.

They were both at a meeting with me yesterday when this issue arose.

Deputy Howlin will have an opportunity to make his point next Friday.

The Labour Party did not double statutory redundancy payments or make many changes when it was in government some years ago.

That is beside the point.

Did the Minister make a commitment?

No, I did not make commitments I did not deliver. I did not do so.

Will the real Deputy McGuinness stand up?

I do not do that.

Was Deputy McGuinness not the devil?

In response to Deputy Hogan's question, it is important that we develop infrastructure, particularly in the peripheral regions? That is why it is a priority for the Government.

Written Answers follow Adjournment Debate.