I call on the Deputies who tabled questions to the Minister for Enterprise, Trade and Employment in the order in which they submitted their questions to my office.
Private Notice Questions.
Job Losses.
Willie Penrose
Question:Deputy Willie Penrose asked the Minister for Enterprise, Trade and Employment if he is aware of the serious implications for employment and the general economy in the midlands of the appointment of a liquidator to Iralco Limited, Collinstown, County Westmeath on 14 April 2008 and the consequent threat to 420 jobs; his views on the importance of keeping the plant operating as a going concern; and if he will request the industrial development agencies to support all possible steps being taken by the liquidator in its discussions with employees, suppliers, customers and the company itself to keep the plant open and secure the maximum number of jobs.
Johnny Brady
Question:Deputy Johnny Brady asked the Minister for Enterprise, Trade and Employment if he will take every possible action to ensure the jobs of the 420 employees at Iralco Limited, Collinstown, County Westmeath are secured, given that the company provides employment not only in County Westmeath but also in counties Meath, Longford and Cavan.
James Bannon
Question:Deputy James Bannon asked the Minister for Enterprise, Trade and Employment the reason the Government failed to increase competitiveness and reduce the cost base to attract and retain foreign investment and stem the escalating closure and movement abroad of existing businesses; if he is aware that this is adversely affecting the nationwide employment profile, with the publication of the live register for March 2008 showing a rise in unemployment levels, particularly in the midlands, and Longford-Westmeath having lost 683 jobs in recent weeks; and if he will make a statement on the matter.
I propose to take all the questions together.
I fully share the Deputies' concern regarding the announcement by the company in question that it is facing liquidation and the impact of that decision on its employees. The company announced the appointment of liquidators in a press statement on Monday, 12 April. I understand that the liquidators are carrying out an initial assessment and will speak with employees, suppliers and customers in the coming days. The Government and the State development agencies await the outcome of the meetings between the company, union representatives and the liquidator. The efforts of the agencies will be geared towards saving as many jobs as possible, including any possible assistance in the event of any management buy-out options.
This company has been a significant employer in County Westmeath since 1964. It would be extremely disappointing were operations to cease at Collinstown and particularly devastating for the workers and families directly affected. I understand the company had incurred losses for the last three years and, although some strategic investment was under way, had projected losses for 2008 and 2009. The company's business plan projected a turnaround in 2010. The success of this business plan would have secured employment in Collinstown for the medium term, albeit at a reduced level.
The company recently informed the Industrial Development Authority, IDA, that jobs were at risk if specific industrial relations issues in regard to pay increases could not be resolved. Additional funding was also needed to proceed with the investment it had planned in the Ukraine, which was crucial to the future of its Irish operation. The timeframe on this decision was immediate. The IDA was already engaging with the company and had offered to assist by lending its support to resolve the industrial relations situation through discussions with the union at senior level and discussions with shareholders.
Subject to the resolution of the industrial relations and funding issues, the IDA had confirmed to the company that it would consider support for training, consultancy and research and development, based on its future business plan in Collinstown. The IDA also offered to assist if the company decided to seek investment from equity or industrial partners and to work with Enterprise Ireland in the case of an indigenous shareholding investment. However, despite the input of the Labour Relations Commission and IDA Ireland, which made every effort to avert this development by negotiating with the company on a package of incentives geared towards trying to maintain the business for the future, this approach has unfortunately not borne fruit. When the Minister, Deputy Martin, contacted the company directly, he reiterated that the Government agencies remain available and willing to provide any assistance or take any steps to ensure the company remains in production on terms satisfactory to the management, unions and employees. Deputies O'Rourke, Johnny Brady, Penrose and Bannon have been in continuous contact with the Minister on this issue since the bad news broke. Senator Cassidy raised the matter this morning in the Seanad.
I assure the House that IDA Ireland is in ongoing contact with the company and will continue to work closely with its representatives during this challenging period. IDA Ireland will meet members of the family that owns the company tomorrow to discuss this issue further. The Minister, Deputy Martin, has said he is also available to meet the owners of the company to discuss the matter. While I am conscious of the effect job losses have on the workers involved and their families, as well as the local community, I assure them that the Government will make every possible support available to develop new employment opportunities. The role of FÁS, which is the State training agency, will be particularly important in assisting people if jobs are lost. FÁS will be available to provide advice and training opportunities for the Iralco workforce. The agency will make its full range of support services available to the workers. It will work on reaching top-level agreement with the company on responsibilities and actions. It will engage in intensive interviews, individually or in groups, with affected workers to outline the range of supports and services available. FÁS will prepare a skills analysis report based on the identified needs of workers and local opportunities. It will refer the affected workers to jobs, training courses and other options. It will establish special or customised training courses, where necessary. It will offer ongoing support and action to keep redundant workers in touch with the labour market.
The Government, through the State development agencies and other interested parties, adopts a co-ordinated approach in dealing with job losses. Such bodies work together to make the employees aware of the supports available to assist in finding new employment or starting their own businesses. The Minister for Enterprise, Trade and Employment has pointed out on a number of occasions that there has been, and continues to be, a significant churn in employment. The effects of globalisation are felt in the smallest markets and global competition will intensify and extend its reach. The Government has recognised the inevitable changes taking place across the world in the areas of trade and investment. Enterprise policies that equip companies with the ability to better compete in world markets, capture the opportunities presented by globalisation and build a competitive advantage in innovation and knowledge have been central to policy development. The best response to globalisation is to ensure Ireland remains attractive for investment and enterprise growth.
As the economy has matured, foreign direct investment incentives have been tailored to match our strengths. As low wage costs are no longer an enticement, they have been replaced by other attractions, including a competitive tax and regulatory environment, a better educated workforce, an improving infrastructure and a commitment to world-class standards of research, development and innovation. Maintaining and improving upon these standards is vital to sustaining Ireland's competitiveness.
IDA Ireland is working to develop the knowledge economy in the midlands region, which was mentioned by Deputy Bannon, so it can compete nationally and internationally for foreign direct investment. In the past five years, the agency has been promoting counties Longford and Westmeath as part of an integrated midlands region with a population base of more than 310,000 people. The counties have traditionally been a centre of manufacturing for foreign direct investment but, like other counties, they have seen a number of closures within the multinational sector as global investment shifts to low cost destinations. In response, IDA Ireland is marketing the midlands gateway of Athlone, Tullamore and Mullingar as a key location for investment in medical technologies, international financial services and ICT, in line with the national spatial strategy and as part of the process of repositioning the region to facilitate a more knowledge-based economy.
Some progress is evident in the midlands region. Companies like Kinetic Concepts, Teleflex Medical, AXA Assistance, Elan Corporation and Alienware Corporation are establishing or expanding their operations in the county. When I was in Savannah, Georgia, recently, I visited the offices of Georgia Tech Research Institute, which has linked up with Athlone Institute of Technology as part of a very interesting concept. The 21 IDA Ireland-supported companies in County Westmeath employ 2,298 people. Enterprise Ireland has 119 companies, which employ over 3,000 people, in the county. The Government is not complacent — it is well aware of the challenges ahead not only in a global context but also in County Westmeath. The Government is investing in the infrastructure needed to attract foreign direct investment to County Westmeath. It is investing €3.5 million in a quality flagship business park in Athlone, which is an integral part of the agency's international marketing programme. IDA Ireland has purchased 70 acres of land at Ardmore in Mullingar. The site has been master-planned and phase 1 construction is complete.
Enterprise Ireland has a number of programmes in place to assist indigenous companies to grow and export. It has invested heavily in Athlone Institute of Technology, which is a key infrastructure element for the attraction and development of enterprise. In February of this year, the Minister, Deputy Martin, announced a €50 million boost to regional economic development. Athlone Institute of Technology is set to benefit directly from this investment, which will support enterprise focused activity in the midlands by funding the purchase of industry-relevant research equipment, providing more incubation space for start-up companies and establishing additional market focused research groups.
The manufacturing sector has been vital to the economic success this country has enjoyed in the past 15 years. The Minister for Enterprise, Trade and Employment recently launched the report of the high level group on manufacturing. The group, which was set up under the Towards 2016 agreement, spent 12 months examining the challenges facing the manufacturing sector in Ireland. It concluded that manufacturing will continue to play an important role in Ireland's economic development, as it has done in the past. Manufacturing is evolving and will be different in the future. It will be even more technologically advanced, knowledge intensive, capital intensive and skills intensive, led by an understanding of markets and customer needs.
We need to ensure that firms are making the changes necessary to be at the leading edge in terms of production processes, global business models, organisational structures and human resources practices. In effect, this means firms need to invest in innovation and mechanisms to increase productivity, reskilling and upskilling their workforces and building a world class management capability that is relevant to an innovative firm operating in a global context. The Government, which established Skillsnet to oversee its strategy of upskilling the whole labour force, is investing in various training programmes. Future successful manufacturing firms will have a participative culture, where management and staff work collectively to ensure the success and long-term sustainability of the firm for the benefit of all. This will involve evolutionary change for some firms, while for others it will mean fundamentally transforming how they do business and organise themselves.
The report acknowledges that a range of policies have been developed to enhance Ireland's business environment so it continues to be a good place to do business. The report calls on the Government to take steps to address the rising costs which have been facing the sector for some time. Energy costs, waste charges, professional services and local authority development charges, for example, have a negative impact on the sustainability of the manufacturing sector. I welcome the recommendation that we should continue to focus on collective action through the establishment of a manufacturing forum. We know what needs to be done. Everyone needs to play a part in making it happen. Manufacturing matters to Ireland's economy and will continue to matter as we move into the next decade.
I am confident that the strategies and policies being pursued by the State development agencies will continue to support enterprise development and job creation in the midlands area. I reaffirm that the State agencies will continue to work closely with each other and with local interests to assist an integrated approach to investment and enterprise development in counties Westmeath and Longford and the adjoining areas. The Government is committed to using all the State agencies to secure as many jobs as possible at Iralco Limited. There has been high level contact with the unions, management and owners of the company. We have to deal with the challenges associated with the competitive global market. We understand the impact job losses can have on families and the broader community.
I thank the Minister of State. Perhaps it was a Freudian slip when he referred to "Monday, 12 April", given that last Monday was 14 April. Did somebody know more than their prayers on Saturday, 12 April? I am sure the Minister of State is aware of the huge devastation that was visited on the 430 employees of Iralco Limited and their families last Monday when they were informed, without prior notice, that their place of employment was to go into liquidation. It was a devastating bombshell, as Deputy Johnny Brady said, to learn that the liquidators had been appointed earlier that day. It will be a terrible blow for north Westmeath and the north midlands as a whole if a factory that has been a bedrock of employment since 1964 has to close. This week's news is a bitter blow for many families who have worked for Iralco Limited over the years. The factory has provided employment to three generations of some families — the parents and grandparents of some current workers are former employees of the company. I know of an extended family that has eight people working there. Other families have been working there for years. Such people are very worried.
Is the Minister of State aware that, on top of the 430 likely job losses, many ancillary industries will be affected? I refer to companies which supply parts, services and goods to this long-standing factory. Is the Minister of State aware that it is estimated that the 430 job losses will have an impact on approximately 2,000 people? That is how the impact of the closure of this factory can be gauged. That shops and other businesses in Collinstown will be affected was made clear by the comments of Mr. Bernie Conaty of the local post office the other night. When one considers that the company has been employing large numbers of people for the best part of five decades, it is clear that last Monday's announcement represents a black day for County Westmeath and the north midlands in general. When the loss of 66 jobs at Kimball Electronics in Longford and the loss of a further 100 jobs at Nexans Ireland in Athlone are taken into account, it is evident that over 600 jobs have been lost in the midlands over the past week. Will the Minister of State establish a dedicated task force to confront the serious problems being encountered in the manufacturing sector? This would focus absolute priority on the search for replacement industries.
Is the Minister of State aware that the magnitude of the impact of the loss of 420 jobs in a rural area such as Collinstown is the equivalent of the loss of 8,000 to 10,000 jobs in a large city such as Cork or Galway? Collinstown is home to the Collinstown Glenidon hurling club and the late Jobber McGrath. It is a great hurling area and the people are very resilient.
Iralco has been a bedrock of employment for families. Will the Minister of State take steps to ensure that every assistance is given to the liquidator, Mr. John McStay, whom we met, the managing director, the shareholders, Mr. John Bolger and Mr. Peter Kenny who are negotiating, the suppliers, customers and, most importantly, the employees, who are carrying out ongoing assessments? All shoulders must be to the wheel with no excuses to secure as many jobs as possible, if not all, of the 420.
Does the Minister of State accept a talented and skilled workforce is available? Their skills were utilised by the company to manufacture high-quality motor components for some of the largest manufacturers in the world, including Ford, Bentley, Volvo and Volkswagen. Families have been devastated as five, six or seven members of the same family are involved. Will the Minister of State ensure that upskilling, training and education facilities are made available? People have indicated to me that if this cannot be secured they will not be able to find alternative employment.
Has the Minister of State ascertained from the company why it abruptly applied for a liquidator to be appointed? Is it because of the cost of energy or the strength of the euro? The employees have not received an increase since 2005. They have forgone increases. Admittedly, an industrial relations issue arose. Will all agencies such as the IDA, Enterprise Ireland and FÁS get involved through a focused taskforce to ensure an all-out effort is made, with no obstacles, to help the workers and their families secure the maximum amount of employment?
I am aware of the importance of the company in providing employment for many years. Iralco was a strong employer in the area. We acknowledge that the loss of 420 jobs in an area such as Collinstown in Westmeath has an immediate impact on the community and environment with the embryonic and ancillary spin-offs to other job creation, investment in shops and hurling teams. It has a devastating impact.
The IDA is in negotiations. It is trying to rescue the company and it will meet with the family which owns it tomorrow evening. An investment plan existed to establish a plant in the Ukraine and coating and painting was being shipped over there. Primarily, we are trying to ensure the IDA is in there putting together a rescue package. This has been ongoing for some time. The Labour Relations Commission was involved previously and discussions took place between the unions and management. They could not agree to pay the national pay deal. Discussions took place to see whether the wage level could be reduced. Unfortunately, for whatever reasons, this did not come to fruition.
We are in a competitive global market and this company has sustained loses for some time. The IDA approached it some time ago in the context of grant assistance for research and development in conjunction with it forwarding a business plan. It is still involved.
I wish to state to the workers that we acknowledge that generations of the same families have been employed by Iralco and have raised families. The company has been a good and responsible employer for many years and this must be acknowledged. The reasons for the announcement to go into liquidation can be ascertained at a later date. At present, we want to rescue as many jobs as possible.
I thank the Minister of State for coming to the House to respond to this issue. As Deputy Penrose stated, the announcement of the appointment of a liquidator to Iralco is a major blow to the region. With 420 jobs, it was the largest employer in the region. It is a rural area and it is estimated that Iralco contributes €8 million to the economy. People from not only north Westmeath were employed but also people from my town of Oldtown in the new constituency of Meath West and from up as far as Kells, Oldcastle and Moylagh. Deputy Penrose knows this area well——
Very well.
——as does Deputy English.
It covers four counties, and is in the heartland of Westmeath, Longford, Meath and Cavan. People from all areas are employed. I am glad substantial orders are on the books which remain to be filled. As we speak, some employees are working, deliveries are being accepted and representatives are with the liquidator. I hope contracts can be kept in place and terms can be arranged with the unions for the factory to reopen.
I appreciate other Members wish to speak. I know the Minister, the Department and the Minister of State will do everything that can be done. It is a vital cog in the area and the employees affected will not get other jobs in the area. As Deputy Penrose stated, some of the employees have worked there for 44 years with eight or ten people from the same family working there. In some cases, husbands and wives are working there. We saw on the television people who work there and are expecting their first child after building a new house. I know the Minister of State will not be found wanting and I appeal to him to do everything in his power to ensure most of the jobs will be saved if they cannot all be saved.
Contracts and orders were placed by Volkswagen, Volvo and Bentley. Unfortunately, the company has been sustaining losses for a number of years. It tried to put together a business plan. The IDA has been in discussion with the company for some time to see whether it could assist in industrial relations, a business plan and support aids.
I saw the news and I acknowledge it has a harrowing and devastating impact on a community, primarily on people with investments in houses, mortgages and rearing families in the hope the company would be an employer for years to come. Unfortunately, the company has appointed a liquidator. We are where we are and we are trying to ensure the IDA, at this late stage, can in some way assist in saving as many jobs as possible. It will meet with the family which owns the company and is in discussion with management and the unions. We will see whether we can rescue the company.
During recent years, this business has become more competitive internationally and the company has been sustaining losses. FÁS is doing a skills audit to see whether jobs are available elsewhere for people who have worked in Iralco for a number of years. It is important to deal with the company in the situation in which we find it.
In his speech, the Minister of State referred to Deputies O'Rourke and Kelly. Where are they this evening? Their insincerity and hypocrisy is noted by their absence from the Chamber. They should be here to discuss this important issue concerning the constituency of Longford-Westmeath.
The Deputy should not disparage Members who are not present.
Announcements of job losses have become too common an event. What investors in business seek is the right environment to create and maintain jobs. High business costs and tax levies are driving businesses elsewhere such as to Eastern Europe and China. This is regrettable at this time. The Government has imposed a series of massive stealth taxes in recent years.
The Deputy must ask a question.
The large amount of job losses in the midlands was brought home to us in recent months. Deputy Penrose referred to the loss of almost 500 jobs at Iralco. We also had the loss of 100 jobs at Nexans, 60 jobs at Kimball Electrics and the announcement that more than 20 jobs will be lost at B3 Cable in Longford, which has gone unnoticed by the media.
The Deputy must ask a question.
I offer my heartfelt sympathies to the workers and their families. Will the Minister of State put in place the necessary measures to stop the job drain from the midlands which is threatening the economic development of the area? We need a high level of intervention by the Minister of State to save those jobs. Sadly, for the workers of Longford-Westmeath this did not happen. I would like to know if the Government has done everything possible.
Deputy Bannon——
This Government is lacking an industrial strategy.
Deputy——
We have not had a strategy on unemployment since Alan Dukes produced the Tallaght strategy.
The Chair will not be ignored.
I am entitled to five minutes.
The Deputy is not entitled to five minutes. He must ask a question. This is not an Adjournment Debate; it is Question Time.
I thought we had half an hour to debate it.
Half an hour has been allocated to the debate. I am anxious to allow a number of other Deputies——
May I speak again?
The Deputy may not speak again. The issue is——
It is very important to my constituency and to the people of Longford-Westmeath who are disgusted with the behaviour of the Government on this issue.
The Deputy will not disparage the Chair.
No disrespect to the Chair but I stand here for the people of Longford-Westmeath and I am disappointed at the way they have been let down by the Government.
The Deputy will know that I allowed a Private Notice Question on this matter because the Chair felt it was an important one.
I thank the Leas-Cheann Comhairle for that.
It would be appropriate to allow a number of other Deputies, who also wish to ask a question on this important topic, to speak. In the meantime, the Deputy should have some regard to the Chair when being addressed.
Deputies have been in contact with the office and others have used the Private Notice Question to highlight this very serious issue in the midlands. I agree with Deputy Bannon that this is a very emotive issue which has an immediate impact on families and people working in Iralco. The Government is trying to do everything possible. The IDA is there at present, is in discussions and is to meet the owners tomorrow. It has been in discussions previously in terms of providing assistance and support for research and development in the context of a business plan because the company has been losing substantial amounts of money for a number of years. As I pointed out, this has been an ongoing process.
The Labour Relations Commission was involved previously in discussions with the management and the workers to secure a pay deal which could rescue the company. Unfortunately, events have moved on and a liquidator was appointed over the weekend. We very much acknowledge the pain and frustration of the families directly affected and of the broader area.
Deputy Bannon is doing himself an injustice by talking down Longford-Westmeath as an area for potential investment.
We are disappointed by the Government attempts to maintain jobs in the midlands.
It is important that we——
I am not talking down my county. I am talking about people who have lost their jobs in Longford-Westmeath.
I am trying to make the point that it is important that we do not talk down the whole area because we have a difficulty with this company. There is investment in Longford-Westmeath. The IDA is marketing the midlands area for the high and innovative-type skills which I outlined earlier. It is investing in infrastructure as well.
I am anxious to allow Deputies English and Ó Snodaigh to ask brief questions.
I thank the Minister of State for his understanding of the importance of this issue which is devastating for those concerned, but I will not go into that because we are short of time. Some important meetings were held yesterday and today. I am conscious that the Minister of State's reply has been worked on since this morning. Is there any update on yesterday's meetings, mainly with the employees? What information are they getting? We hope many of these jobs can be saved.
I urge the Minister of State and the Minister to meet the family. I know the IDA is doing that but I urge the Minister to do so to prove how important these jobs are to the country, the area and the Government.
I believe the factory in Ukraine is unable to function without the Collinstown plant working. Will the Minister of State confirm that? Is there a danger that things are moving quietly along? The employees understand that one cannot work without the other and we would not like to find out further down the line that this is not the case.
The factory in Collinstown is similar to NEC in Ballivor. Such factories are very important and are the heart of villages in Westmeath and south Meath, which are not built up. There is a danger that some of these jobs might be permanently lost. We must try to replace them with new jobs. I am conscious that many of the IDA visits are to bigger areas such as Mullingar, Dundalk and Drogheda. If there are existing factories and premises and if jobs are being lost, a real effort should be made by the IDA to replace these jobs in those locations to give villages, small shops and post offices a chance to survive. NEC did not receive any visits from the IDA last year. I do not want that to happen in Collinstown. If any of these jobs are lost, we will need a strategy to replace them or to locate a new enterprise there.
When did the Minister become aware that the company was in trouble? If he was aware, why was a task force not put in place to try to ensure workers had alternatives? Has the liquidator been informed that the Government would support either a worker or a State buy-out of the company to ensure workers in that region would not be affected in the wway they will be if the company closes? It would be appropriate for the State to say it will buy-out this company initially to ensure workers have continuation of employment and orders are filled. Workers could then try to look towards the future.
On the question of Ukraine, the two factories are interdependent. That has been brought to the attention of the IDA. It is important to reiterate that the IDA had already been engaging with the company and had offered assistance by lending its support to resolve the industrial relations situation through discussions with unions at senior level and with shareholders. That has been happening for some time. Subject to the resolution of the industrial relations and funding issues in the company, the IDA had confirmed to the company that it would look at supporting training, consultancy and research and development based on its future business plans in Collinstown. The IDA also offered to assist if the company decided to seek investment from equity or industrial partners and to work with Enterprise Ireland in the case of an indigenous shareholding investment. It has been in negotiations and in contact with the company for some time. A liquidator was appointed over the weekend, which was a very regrettable decision.
The IDA is there at present. If jobs are lost, or if the company can be saved and only a certain number of jobs are retained, FÁS will be available to do a skills audit to ensure there are opportunities for people to undertake courses, upskill or train or to be pointed towards other enterprises which might need the skills of workers heretofore employed in Iralco.
The Government is very committed. The Minister said he is available to meet the family. However, this is a very complex issue. The company is now in liquidation. The company in Ukraine is dependent on the one in Collinstown and vice versa. It was clearly explained some time ago that it needed immediate investment to speed up the Ukraine development which would have an impact on Collinstown.