Will my colleagues allow me to speak on the matter for one minute at the end of their contributions?
Adjournment Debate. - Job Losses.
Yes.
I thank the Ceann Comhairle for selecting this matter for debate on the Adjournment tonight. The 116 redundancies announced yesterday by Penn Racquet Sports Company (Ireland) in Mullingar is part of a deeply worrying trend for the midlands. We must spur the Tánaiste and Minister for Enterprise, Trade and Employment into action to tackle the issue of employment in the BMW region. Yesterday evening, we heard a positive announcement on decentralisation, which has been advocated and for which we have agitated for many years. The joy and euphoria surrounding the announcement was tempered by the loss of 116 jobs at a company which has provided employment for many families over the past 30 years.
I will not engage in platitudes but I express my heartfelt sympathy to the 116 workers of the Penn company and their extended families who will also be affected. Some of the workers have given virtually a lifetime of service to the factory and they took great pride in the excellent skills required. They exhibited tremendous and deep loyalty to the company over the years and did everything possible to ensure its survival. As Deputy Paul McGrath will vouch, they adopted new work practices and technology and the workforce was reduced by approximately 25% while maintaining the same level of production.
The tennis balls manufactured in the company were produced to world-class standards. Those of us who have watched Wimbledon, the US Open in New York and other major tournaments will have seen them. The company's tennis balls represented something important in Mullingar and we were proud of them as a tremendous advertisement for the town. Coming at any time of the year, the announcement would be devastating news, but it is particularly devastating as we approach Christmas.
Securing alternative employment for these workers must be a major priority and efforts in this regard must begin immediately. Retraining and reskilling will be required and FÁS and all the agencies must quickly get their act together. County Westmeath has suffered a series of redundancies. Yesterday's announcement comes in the wake of recent lay-offs at MSL, Powerscreen, Elan and Eriksson and is a body blow. The direct loss to the economy will be approximately €3.5 million and could reach €4 million. A significant number of workers will be affected, including many from outside Mullingar in towns such as Rochfortbridge Ballinacarrigy, Delvin and Kilbeggan. The company stated it would relocate to the Far East where labour costs are cheaper.
We must offer opportunities to those affected. A strategic task force must be established to bring together business, trade unions and political representatives to devise a strategy to reverse the employment trend in the area. I call on the Tánaiste to come to the midlands and arrange for the establishment of a task force to address this issue and ensure the workers in question are given an opportunity to find employment. This must be done as a matter of urgency, particularly in view of the impact the job losses will have on workers and their wider families, who must pay mortgages. It will be particularly devastating for several married couples employed in the factory.
The closure could also lead to the loss of an indirect job for every direct job lost, which means the full impact of the closure could be as many as 250 redundancies, which would be a serious blow for Westmeath. We may be about to gain 300 new jobs, but we could also lose 250 others. I ask the Tánaiste to do everything possible to help those affected.
Thank you, a Cheann Comhairle, for allowing me to raise this important matter. The announcement that Penn Racquet Sports Company (Ireland) is to close and cease production in three or four weeks with the loss of 116 jobs is a sad day for a significant number of families in the Mullingar area. I sympathise with all the families involved. Many of the workforce now losing their jobs have been with the company from its first day in 1974 and have given it a lifetime of service. Unfortunately, they are receiving bad news today which will have a considerable impact on the economy. As Deputy Penrose pointed out, the closure will result in the loss of almost €4 million in direct payments annually in wages. In addition, a further 150 to 200 jobs in spin-off work could be lost in the wider community. The company was long established, did its business locally and made a significant input to the community. We were all proud of it, and its closure is a major loss to the town.
In 2001, the Penn Racquet Sports Company in Mullingar exported 23 million tennis balls throughout the world. These were of top standard and were proof of the quality work done in the midlands area. I am particularly disappointed with the closure, given that the company and its workforce worked in the past ten years to try to remain competitive.
Deputies tend not to realise the difficulties facing business. For example, the Penn company has not received an increase in the price of its tennis ball in the past eight years, yet it has had to absorb additional costs, such as insurance, electricity, wage increases and so forth, to try to remain competitive. The workforce was up to this challenge, improved its output and co-operated with the bosses on improving skills, productivity and the cost base. This extended to reducing the lighting in the factory to keep down costs. Unfortunately, the point has been reached where the company can no longer carry on. This is due to a shrinking market and over-capacity caused by competition in the Far East where tennis balls can be produced at a low standard.
With all due respect to the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Michael Ahern, I am particularly disappointed that the Tánaiste is not present. She met a deputation from the tennis ball sector six or eight months ago when, in the presence of the Leas-Cheann Comhairle, proposals were put to her on how the Department could help keep the sector afloat. The sector recognised at that stage that it faced difficulties and asked the Tánaiste to intervene. Realising now that she was aware of the problems and could have made an input at that time, it is disappointing she has not turned up to address the issue this evening. Members of the workforce and management will also be disappointed when they realise that having done their best and indicated in advance the difficulties facing the company, the Tánaiste has failed to respond. Perhaps she or the Minister of State will make up for this by announcing this evening that a task force will be established in the Mullingar area.
Deputy Penrose outlined the job losses we have experienced in recent times, which is a new phenomenon in Mullingar. Until recently, the town had not lost jobs, it had a good record of maintaining employment. The news is, therefore, disappointing. I hope the Tánaiste will move quickly to set up a task force to attract alternative industry to the factory, which is a fine and valuable plant in a prestigious location. Such a task force must bring together the various relevant sectors to try to ensure that alternative employment is found for those affected. As we approach Christmas, it is a sad time for them.
I thank the Ceann Comhairle and my colleagues for allowing me the opportunity to speak in this debate. I join forces with all sides of the House in highlighting the difficulties being experienced by the staff who have been loyal and dedicated to this factory. Both workers and management have been a great example to everyone involved in industry in Ireland. I am sure IDA Ireland, Enterprise Ireland and FÁS know that these people in Mullingar are losing their jobs because of low cost wages in the Far East. I call on the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Michael Ahern, the Tánaiste and everyone concerned to get together to do something for this tried and trusted workforce which has made many sacrifices. These people are loyal, dedicated and committed and can be trusted with whatever work they are given in future.
Yesterday was a great day in terms of decentralisation. Members from the county on all sides of both Houses made the case for that for many years. The news about this factory was heartbreaking. I support everything that was said. The darkest day may be close. Mullingar is a great location, as was stated by Deputies Paul McGrath and Penrose. These people are our priority, especially coming up to Christmas.
I thank Deputies Paul McGrath and Penrose for raising this matter on the Adjournment and Deputy Cassidy for his contribution.
It was with great disappointment that the Tánaiste and Minister for Enterprise, Trade and Employment learned of the decision by Penn Racquet Sports Company Ireland to close its plant in Mullingar with the loss of 116 staff. She is conscious of the effect the closure of the plant will have on Mullingar, especially on the workers and their families.
The company manufactures tennis balls mainly for the European market and competes with companies which have moved production to low cost locations such as the Philippines and Indonesia. Major European tennis ball manufacturing facilities have closed and moved to the Far East to source product. A depressed and extremely competitive marketplace, coupled with the growing strength of the euro against the dollar, were major factors behind the decision to close the Mullingar plant. In addition, the parent company has two under-utilised manufacturing plants and decided to close Mullingar and move worldwide tennis ball production to Phoenix in Arizona. The latter plant has the capacity to produce Penn's global tennis ball requirements at a cost substantially lower than in Mullingar and without substantial incremental investments. Unfortunately, it is expected that all staff will be made redundant at the plant by the end of March 2004.
IDA Ireland has been aware of the difficult market conditions being encountered by the company in recent years and has worked with the company on improving processes designed to cut production costs and research and development of new market specific products. FÁS will make immediate contact with the Mullingar company and offer its full range of services, including training, job placement and other services, with a view to facilitating the workers in finding alternative employment.
The Government's commitment to regional development is stronger than ever and it is determined to see the emergence of strong magnets of attraction, such as Mullingar. For its successful development, each region needs to have clear, competitive reasons why companies would wish to locate there rather than elsewhere. 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 cooperative framework can be used effectively and efficiently to deal with job losses and job creation in the area. These agencies have been efficient in my area which has lost a number of jobs in recent months.
Will a task force be set up?
The Minister of State, without interruption.
FÁS, Enterprise Ireland, IDA Ireland, the county development board and the county council will work together. There will not be an official task force, but these agencies will do the same job. The State development agencies, under the aegis of my Department, will continue to market Mullingar for investment and make every effort to secure alternative employment for the workers affected by the closure of Penn Racquet Sports Company Ireland.