Dáil Éireann debate -
Wednesday, 2 Jul 2003

Vol. 570 No. 3

Adjournment Debate. - Company Closures.

Mr. English

I appreciate this opportunity to discuss this serious issue in Navan regarding jobs in the carpet factory. Monday brought the most serious blow to employment in Navan for many years.

The liquidation of the internationally-renowned Navan Carpets was a dark day for the town. It was one of the largest employers in the town, employing over 220 people, many of them married couples, and brothers and sisters, people who have worked there for the last 20, 30 or 40 years. Many of these people are not retrainable, despite what the Minister, Deputy Harney, has said, and it will be very hard to find new jobs for them. Apart from the task force to find new jobs, I also want a task force to help to try to save Navan Carpets.

Navan Carpets is like one big family. Not only has it provided people with jobs, it has been their way of life. Some of those people have worked there for over 40 years. In some cases, families through three generations have held jobs there.

This closure has come about because of a combination of reasons, and the Government's economic policy has not helped. The reasons include the rise in the value of the euro and massive insurance costs. Navan Carpets paid just over €9,000 per week just for insurance cover. This is not good enough, and I blame this Government for that. These are crazy figures. A fall-off in the international and domestic markets for carpets is also one of the reasons for closure.

However, I believe this gives us the opportunity to look again at the operation of Navan Carpets and to make sure it does not close. I want this Government to do all in its power to keep alive the close association between Navan and carpets. Navan Carpets has been like an industrial ambassador for this country, providing a display of skill and craftsmanship all over the world. This is why I want a task force established to keep these people in jobs. I do not accept that Navan Carpets should be let close. I am shocked that that has been allowed happen and I am very interested in knowing what discussions have taken place with Enterprise Ireland over the last number of months to keep this factory in my home town open.

I not only want a task force, I want action, and it must be fast. The name of Navan Carpets must be kept alive, and its carpets kept in the stores and on the markets. I am asking that through the office of the Minister, all the various bodies enter meaningful discussions with the liquidator with the aim of retaining Navan Carpets, keeping it in production and saving as many jobs as possible. I accept, as do the staff, the need for some rationalisation and restructuring, but we must attempt to save the factory. It is not good enough to let it go down the Swanney. A bit of financial help will also be needed, though not a whole lot. This company made a profit of €500,000 million in 2001. It lost only €1.5 million last year, which is not a lot of money when it comes to creating jobs.

I also want this Government, through its contacts in the US and elsewhere, to find new markets for Navan Carpets. When buying a new house, it is everyone's aim to have Navan carpets in it, but people cannot afford that. That is because of the cost of living in this country. That will change, and if we can keep Navan Carpets open for another year or two the market will change, The tradition of carpet manufacture must be kept alive in this country. If we let it slip now, I fear that in years to come we will be grant aiding foreign companies to come here to produce carpets.

Navan Carpets has been in operation since 1938 and it cannot be let go like this. It has survived through thick and thin before, mainly thanks to the staff for accepting wage cuts, etc. With some clever intervention, I believe it can survive this crisis. Action and political will is needed. This tradition and our good name in the carpet industry must be kept alive regardless of the cost. There is no reason to let this slip and it is an ideal area to train young people in the manufacture of carpets. We should build up this industry in Ireland. We are crying out for other industries to come in.

The amount of money required would not be massive. The company made a profit in 2001. Its losses in 2002 only amount to approximately €6,000 per employee. If the records are checked I can guarantee that most of them paid more than €6,000 in tax that year. It would not cost the State a considerable amount to get involved here. I do not want to hear ten reasons why this cannot be done; I just want it done. If necessary, some of the State bodies should get involved in the running and management of Navan Carpets. We have hundreds of good staff in all these bodies, many of whom are able to talk the talk; now it is time to let them walk the walk. We should let them become involved to restructure Navan Carpets and make it viable.

I want a rescue plan to be put together that will work and save these jobs. I also want the Tánaiste, through her good offices, to establish a task force for jobs in Navan. We have always had very vulnerable industries in Navan. The Crannac furniture factory closed recently with the loss of 40 jobs. In one industrial park two other industries, Case New Holland and Plaut, have closed. More than 350 jobs have been lost in Navan resulting in a major unemployment problem. The population that has moved from Dublin has doubled the number of residents in Navan, but no jobs have come with that. We need to keep a close eye on Tara Mines, which is a vulnerable industry sensitive to the fluctuating dollar. We need to do all we can to keep this alive.

The name of Navan Carpets is known throughout the world and to let it go would be a great shame. It would be almost as bad as closing the railway lines in the 1960s. People have gone off wooden floors and in three or four years' time, they will be looking for carpets and will have to go abroad. What a shame it would be.

Mr. Morgan

The recent spate of job losses in various parts of the country, many of them in indigenous Irish enterprises, raises numerous questions about the Government's strategies and tactics for job retention and creation. Together with the loss of 230 jobs at Navan Carpets and the loss of 16 jobs at Laserform in Drogheda, which I will specifically address, there have also been job losses at Classic Catering in Drogheda, Powerscreen Limited in Kilbeggan and Flextronics in Cork, among others. According to statistics released by the CSO at the end of June, industrial employment has shrunk to levels recorded before the economic boom. A breakdown of those figures shows that employment levels are decreasing in almost all industrial sectors.

I was asked by Sinn Féin councillor, Joe Reilly, to raise the serious situation that has now arisen in Navan where an additional 300 people will be on the dole within a four-week period. The people of Navan are devastated by the closure of Navan Carpets, an indigenous industry and a world renowned name in carpet making, which has been an employer in the town for 65 years. The closure of Navan Carpets along with the recent closure of Case New Holland and Crannac have dealt a serious psychological and economic blow to that town. In the words of Councillor Reilly: "Navan has suffered at the hands of this Government and previous governments. The town has been passed over time and time again by successive Governments in recent years."

I call on the Minister to fast-track the plans for the development of the new business park for indigenous industries in Navan.

Workers at Laserform in Drogheda were equally shocked at the announcement that Laserform was to go into liquidation on Monday. Drogheda has been bypassed industrially for some 40 years in terms of attention from IDA Ireland. Any job losses in Drogheda will have an adverse effect on a town with a very small industrial base. The Minister should instruct IDA Ireland to focus on Drogheda and Navan before these two towns go into terminal industrial decline.

We need to see a real strategy from the Department of Enterprise Trade and Employment to deal with job losses, which goes beyond simply setting up a new task force each time a factory or business closes. Workers in places such as Drogheda and Navan must be provided with jobs in their own towns. There is a huge fear among the workers resident in these towns that the Government will ignore their plight because they are so-called commuter towns and that they will be forced to join the masses who currently travel to Dublin each day to work.

Increasingly, we see that multinational companies, which received inordinate amounts of grant aid from the State during the boom years, are uprooting and moving to developing countries where they can access cheap labour. There is a necessity to provide indigenous industries with the same quantity and quality of resources as are made available to foreign investors. We need an economic development strategy that creates a balance between inward and indigenous investment. We need to encourage both small and large-scale indigenous companies with a research and development anchor, while also recognising that some 80% of employment in our economy stems from small and medium-sized enterprises. Investment in indigenous companies will have a beneficial impact on ensuring job security for Irish workers.

An IDA Ireland official once said it would take time but he was confident he would achieve early progress in bringing employment to Navan. However, Councillor Reilly asks how, IDA Ireland could not do this in the good times, the people of Navan could have confidence in IDA Ireland or the Minister in the bad times?

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

I thank the Deputies for raising these matters on the adjournment and I share their regret and concern at the closure of this long-established company and the loss of their carpets with which we have been familiar for decades. Navan Carpets became a subsidiary of Youghal Carpet Holdings in the 1970s and I was familiar with it having carried out the audit in Navan on many occasions. It is regrettable that it has now come to this stage

The company has been experiencing particularly extreme trading difficulties over the past two years. Its major market, US hospitality, hotels and casinos, has cut back dramatically on investments. That also brought about the demise of Youghal Carpet Yarns in Carrigtwohill a number of months ago. While sales, profits and exports increased steadily until the end of 1999, the market became more competitive from 2000. Sales have declined over the past three years and profits have turned to losses in the same period.

Considerable losses have been incurred by the company over the past two years. The downturn in the US and domestic market and a weakening dollar are the major factors that contributed to the mounting losses in the company. Unfortunately, the market was not picking up and costs were continuing to increase. The position of the company was no longer sustainable.

Some time ago, the board of the company appointed an external consultant to report on the options open to it. The board decided at a recent meeting that as the company was insolvent there was no possibility of restructuring it to enable it to attain profitability. Accordingly, Navan Carpets did not have a viable manufacturing future and could no longer continue to trade. The board decided to initiate an orderly wind-up of the company. This led to an extraordinary general meeting of the company on Monday 30 June 2003, for the purpose of winding up Navan Carpets Limited and the appointment of a liquidator.

Arrangements have already been made for representatives of the company to meet representatives of FÁS. This meeting will take place tomorrow, Thursday, 3 July. I understand that the full services of FÁS, including re-skilling and suitable training and job placement opportunities, will be made available to the workforce.

As regards job losses at Laserform, the company manufactures steel rule dies and blanking tools and accessories for the box and carton making industry in Drogheda. The managing director of Laserform (Ireland) Limited has indicated that he hopes to sell the company as a going concern in spite of current trading difficulties. Enterprise Ireland will work, where appropriate, with any interested parties with a view to establishing the new company if there is a viable future for the business.

Currently, in Navan Business Park, IDA Ireland has 70 acres of serviced industrial lands available, and six projects are already located there. A number of IDA client companies are doing well in terms of employment in Navan, Kells and Dunboyne. Generali International in Navan is currently planning a 57-job expansion and this will see employment grow to more than 90 in its financial services project. There is also a new 60-acre business park under development in Drogheda.

Enterprise Ireland is continuing to work intensively with existing local industries to assist them in increasing their capability and international competitiveness and has recently launched a special €10 million competitiveness fund for this purpose. Enterprise Ireland has supported the development of community enterprise centres in the region. These facilities, which are developed in partnership with local communities, facilitate the growth of new enterprises.

As regards competitiveness, generally, the Government is already taking measures to improve our competitiveness which will play a critical role in the fight against inflation by strengthening competition across the economy and implementing specific measures to tackle cost pressures in key areas such as insurance. The Government is also increasing investment in research and development and in key infrastructure areas such as broadband telecommunications.

On the specific question of setting up a task force, the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, wishes to emphasise that the State development agencies are fully committed to the promotion of employment creation in the Navan area. The State agencies work closely with each other and with the development bodies in the area, including the Meath County Development Board and Meath County Council, as well as other local bodies and interests, in facilitating an integrated approach to enterprise development. This existing co-operative framework can be used effectively and efficiently to deal with job losses and job creation in the Navan area. Given the representation of the State agencies and the county council on the Meath County Development Board, it is considered that, should any further co-ordination be necessary, the county development board would be the most appropriate forum to fulfil this function. Accordingly, the establishment of a task force is not envisaged.

Mr. P. McGrath

I wish to share time with Deputy Enright. I thank the Ceann Comhairle for allowing me to raise this issue.

Kilbeggan is a small town located on the junction of the N52 and N56 with a population of 500 people. The loss of 118 jobs at Powerscreen Limited is a blow to that community. If one was to compare it to a city venture in Dublin or Galway, it is the equivalent to closing Intel or Hewlett Packard. I am disappointed that the Tánaiste and Minister for Enterprise, Trade and Employment is not present for this debate. There have been 118 jobs lost in Kilbeggan, 230 in Navan and 12 in Drogheda. Perhaps, she has a good reason for not being present. I hope the Minister of State will convey to her our concern for the jobs that have been lost.

I was disappointed at the end of the previous speech where it was stated that no task force would be established for Navan. It is pathetic to think that the Government is not interested enough to provide a task force to find replacement jobs. If there were jobs being announced we would have a glow of cameras in the place with photocalls and so on. However, now on a weekly, if not a daily, basis we have job losses with not a word about them.

Kilbeggan has two main employers with Powerscreen and its 118 jobs and Galtee Meats. I express my sympathy to the Powerscreen workers, who were let go at such short notice, their families and the wider community. I hope the Minister's office will intervene to ensure that there is a decent redundancy package for these workers. This is a lucrative multinational company which can put together a good package for the workers who have been so loyal to it. I am disappointed that no task force will be established.

Ms Enright

I want to highlight the significance of these job losses for County Offaly as Kilbeggan is only five miles from the county. This closure follows those of Flextronics, Leoni, Cybercable, Daiber and Lowe Alpine Systems in County Offaly over the last two years. Tomorrow is the second anniversary of the meeting of the delegation from Offaly County Council with the Tánaiste and Minister for Enterprise, Trade and Employment. We have yet to receive any response from her. The State agencies have failed us as well as the Government. We need an adequate response at this point in time.

Mr. Penrose

The closure of Powerscreen has had an impact on my colleagues' areas. It was an unanticipated closure. Was the early warning system that was supposed to be in place as part of the national agreements invoked? As Deputy Paul McGrath said, Kilbeggan is an important and strategic town located on the N52 and N6. These losses are coming on top of a number of other job losses in the midlands region as alluded to by Deputy Enright. County Westmeath has suffered significant losses from the closure of Tarkett and William Hill in Athlone with some losses at Ericsson.

The 118 employees have a wide array of skills and we must ensure that the State agencies get involved. The Kilbeggan Development Association has played a significant role in providing an industrial estate there. It is important that it is part of a task force. I would be disappointed if the establishment of a task force was not announced tonight. I hope the company gives its employees a reasonable redundancy package in September.

It is a bombshell to those employees and will have an impact on their families, many of whom have mortgages. That is at the micro level. However, for every direct job loss there is a wider impact on ancillary areas. It is important that we move quickly to ensure that alternative employment is secured. The Government says that it can only create the environment for job creation. However, it often claims credit for job creation with which it had nothing to do. The Minister of State has a role in resolving the unemployment situation in Kilbeggan and the other midland towns that have been impacted of late. He must move in co-operation with the IDA, the Kilbeggan Development Association and FÁS to secure this.

Mr. M. Ahern

At the outset I thank the Deputies for raising this matter on the adjournment. The Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, has been ill for the last few days and that is why she cannot be in the Chamber this evening.

The Minister learned with grave disappointment of the recent decision by Powerscreen Limited to cease production at its long-established Kilbeggan facility with the loss of 118 jobs. She is very conscious of the effect which the closure of this plant will have on Kilbeggan and most immediately on the employees and their families.

The Kilbeggan plant primarily manufactures mobile screening equipment for export and use in the recycling and construction industry. According to the company which is US owned, the decision to close was taken because of a combination of changes in the marketplace, product issues, increased manufacturing costs and exchange rate pressures. It is understood that redundancies will commence in August with final closure in late September.

In reaction to the closure announcement at Powerscreen, FÁS, the national training authority, contacted the company yesterday to discuss a detailed programme to assist those who are being made redundant 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. FÁS will also ensure ongoing support and action to keep redundant workers in touch with the labour market.

The State agencies continue to aggressively market the area, which forms part of the BMW region, as a priority location for jobs promotion by the agencies. Recent announcements which show that the strategy is having positive results in the midlands include Abbott Laboratories' announcement of a €70 million greenfield investment in Longford, creating 600 jobs.

This follows from announcements by Oakley to establish a 100-person prescription eye-wear facility in Mullingar and the expansion of the GMAC facility, also in Mullingar. In Tullamore, GeneMedix has established its European centre for the manufacture of generic bio-pharmaceutical products. Irish companies, Cement Roadstone Holdings and Century Homes recently announced expansions in the area, which will lead to some 200 additional jobs.

Additionally, IDA Ireland initiatives in the midlands include a comprehensive IDA property programme in place on the Athlone's Garrycastle business and technology park; two new technology buildings of approximately 25,000 sq. ft. are complete and are being actively marketed by IDA Ireland; and a further office unit of 14,000 sq. ft. is also complete and is currently being marketed. Tullamore business park is being upgraded and all infrastructural work will be complete by July 2003. The State agencies work closely with each other and with the development bodies in the area, including the Westmeath County Development Board and county council, as well as other local bodies and interests, in facilitating an integrated approach to enterprise development. This existing co-operative framework can be used effectively and efficiently to deal with job losses and job creation in the area and that, effectively, is the task force.

Given the representation of the State agencies and the county council on the Westmeath County Development Board, it is considered that, should any further co-ordination be necessary, the county development board would be the most appropriate forum to fulfil this function. The Minister and I would like to assure the Deputy that the State development agencies, under the aegis of the Department, will continue to market County Westmeath for investment and will make every effort to secure alternative employment for the workers affected by the Powerscreen Limited (Ireland) closure.