Seanad Éireann debate -
Thursday, 11 Jun 1987

Vol. 116 No. 8

Closure of Dublin Plant: Motion.

Mr. Manning

I move:

That Seanad Éireann, expresses its grave concern at the sudden closure of the Hyster Plant in Blanchardstown, Dublin 15 and in view of the consequent 250 job losses and the substantial State investment in the plant, calls on the Government to take immediate action to ensure the continuance of the industry and that all facts leading to the closure are made public.

May I place on record my appreciation of the Leader of the House for making time available this morning for a discussion on a matter of great public concern and interest? The closure of the Hyster plant at Blanchardstown is a bitter blow for many people. First of all, it is a bitter blow for those whose jobs are gone almost literally overnight and in such a brutal way. It is a bitter blow for the IDA which had invested so much hope and so much of the taxpayers' money in this venture. It is a sad blow to the Government's job creation programme and also a bitter blow to our overall economy and our morale at this point in our history.

The whole episode is one which raises some very serious questions and which invites, in the words of The Irish Times this morning, the most rigorous post mortem. The questions which must be asked, and which we will be asking this morning, are ones which the Government will want to answer fully and openly. I say this not in any sense of party or political recrimination. Questions concerning jobs and peoples' livelihoods are of far greater importance than any political differences in this House. Nobody in any party will want to make any capital out of this catastrophe.

The way in which the closure was effected leaves a very bad taste all around. The idea that people should arrive, first thing in the morning, to find the gates locked against them, without explanation, without any plans worked out for redundancy, without even the courtesy of an explanation is something which flies in the face of any standards of decent industrial relations. The Hyster firm has not done itself, or the image of multinational companies in this country, any service whatsoever by the way in which it so brutally effected the closure of this plant. I wonder if the Government were aware in 1982 of the reputation of Hyster for sudden closures and sudden pull-outs of this kind when it finalised the original deal?

The immediate priority for the Government and the IDA — and it is not going to be an easy one — is to try to ensure that alternative industry is found for the Blanchardstown area and in particular for use of the plant in question. Apparently, Hyster are simply getting up and walking away from the whole mess. The plight of those who are thrown out of work is not so simple unless some similar "hi-tech" industry can be found. The fact is that these people may never work in this country again. Many of these are young people who invested their hopes in this new plant, who have taken out mortgages, who are in debt, who began to build up their families on the basis of the future held out for them and the expectation that they had a secure future. These people will now find themselves saddled with debt and may well find that the only path open to them is to emigrate. We cannot afford to lose these highly skilled people. We owe it to them to make every effort to find some sort of alternative employment of a similar kind. I know that this will be the priority of the Minister and of the Government in this matter.

Serious questions must be asked as far as the IDA are concerned in all of this. I hope that the IDA will come forward with full and open answers to these questions, some of which were raised in the other House yesterday. Since Hyster began operations in 1982 in this country the IDA have pumped in a total of over £15 million in capital, in employment training and research and development grants to the Hyster company. It is not known how much Hyster itself put in, but it is believed that the ratio is small, certainly far smaller than could be expected in a joint venture of this kind. It is also believed that the IDA were preparing to invest almost £40 million of taxpayers' money in the project — £28.9 million in capital employment and other grants and a further £11.3 million in research and development grants. Fortunately, that money has not been invested. The question which people will want to know the answer to is how much, if any, of the £15 million of taxpayers' money we are likely to get back. The answer would seem to be little, if any, of that money.

The sheer scale of the loss itself raises enormous questions about how the plant came into existence. It was conceived in a blaze of publicity five short years ago. At that time we were told — and I am afraid when it comes to hyping up possible successes in advance the IDA are rarely found wanting, and the coming into existence of this project was surrounded by a blaze of publicity — that eventually there would be 1,500 jobs. There are many of us who, from experience over the years, are very sceptical of the job promises made by the IDA, because these promises are of jobs when the plant is in full production. It is something less than fully honest to assure a community that 1,500 jobs will be available almost as a certainty when that promise is dependent on so many other factors. Experience would seem to indicate that the IDA have rarely succeeded in fulfilling the full allocation of jobs promised at the beginning of many of the plants which they succeeded in bringing to this country. A more realistic less highkey approach by the IDA in terms of promises of this kind might be a welcome departure in their policy. It would be welcomed all round, in which case the impact of the losses might not be so great.

In 1982 it was believed that the IDA had pulled off one of the great coups of the decade by swiping the Hyster plant virtually from under the noses of the Northern Ireland Development Authority. We must now ask if in the zeal to pull off this coup the whole project was rushed through without being subjected to proper critical evaluation and whether the need of the IDA to get the plant at any cost meant the suspension of proper critical judgment. It must be asked whether the Government and/or the IDA, or both, entered into a venture with a very high degree of risk, without properly safeguarding the public investment involved.

We are told in The Irish Press today that a special Cabinet meeting was held on a Sunday, 19 May 1982, to rush through the deal and have it announced in time for the by-election which was taking place in Dublin west at that time. I would like to have an assurance from the Minister that at that Sunday Cabinet meeting, held suddenly, all the proper assurances were given and received that the taxpayers' money would not be put at risk as part of a venture which was unlikely to succeed. I would like to have an assurance from the Minister that all of the proper procedures were carried out, that the advice of the Department of Finance was fully listened to and that all attempts were made to ensure that this was a prudent venture which would not put at risk huge amounts of taxpayers' money. There are many people who believe that this may not have been the case. I would like a detailed assurance from the Minister that all the proper steps were taken, that the risks were not inordinate and that the whole deal was not arrived at in a game of high stakes poker, where Hyster simply hawked their wares around from one country to the other, playing one country's bid off against the other, so that in the end it was capable of getting a deal here which perhaps no other country would accept.

There are other more fundamental problems. The Hyster collapse raises a fundamental problem about the whole overall thrust of IDA policy. Over the years — probably the whole country, the IDA, different Governments and political parties — we have all relied on overseas investment to do much of the work of job creation for us at the expense and to the detriment of the development of many of our indigenous industries. Heavy reliance on overseas investment is fine when it works. Much of the time it has worked in this country. What happens when, as apparently happened in this case, international markets suddenly change? We find then that international companies not surprisingly owe us no loyalty. Their first imperative is to defend their own interests and they will act accordingly. That has happened here. It may happen again. Unfortunately, in the current economic uncertainty it probably will happen again. That particular eventuality does not seem to have been guarded against in the general thrust of IDA policy and in Government policy over the years in their attempt to base so much of our job creation and our industrial development on an over-reliance on investment in international companies.

It is clear now that this over-dependence on this strategy, and not putting enough emphasis on the development of our own indigenous industries, may well have been a mistake and may be at the root of the problems which we are talking about here today. I would like to recall in conclusion one further point about the Hyster operation. It may be remembered that a couple of years ago the then Minister responsible, Deputy John Bruton, refused to accede to a request by the IDA for further State investment in Hyster. The Minister was not happy that the Hyster plant at that stage had a healthy long-term future. What also may be remembered is the extent to which the Minister was virtually taken on by the IDA on that occasion when he was first publicly challenged to state who made industrial policy in this country. He was asked was it the IDA or was it the Government of the day?

I believe that in some ways the IDA, because of their undoubted successes, but also because of the tremendous success they have had in presenting their own image as the great success story, have to a certain extent created an immunity from proper public scrutiny both of their policy and of their operations. I am not just talking about the huge amounts of public money needlessly invested in the elaborate and luxurious new IDA head offices. I am talking about the capacity they have to create the impression that they know best as far as industrial policy is concerned. That particular instance did not show the IDA in a good light. They were prepared to use their undoubted muscle in the areas of media and public relations to try to reverse a Government decision.

We can see with hindsight that, unfortunately, in that particular case the Minister was right. We were safeguarded from further huge losses of public investment in that company because no matter what had happened the shifting international markets probably would have meant that that money would have been further good money going after bad. It is time that we in this House and in the Oireachtas as a whole made a very searching examination of the role and functions of the IDA, their strategies and the scope of their policy. The whole area of industrial policy should be given much greater time and attention here in this House and not simply be the preserve of any State company, however good they may be. I look forward to hearing from the Minister a full reply to the questions I have raised.

Mr. Mulroy

At the outset I should like, as the Minister for Finance did yesterday in Dáil Éireann on behalf of the Government, to express my profound regret that the Hyster project at Blanchardstown has not prospered and that as a consequence some 225 people will lose their employment. I also regret that the company's efforts and the significant State investment have not proved successful. However, it is necessary despite our deep disappointment and concern that we should be objective and restrained in our approach to the public debate on this matter. In my view we should refrain from any extreme comment which would undermine the work being undertaken by our development agencies in their endeavour to create employment opportunities for our unemployed. There are regrettably all too many of these. We must build up our economic strength through the development of new, export-oriented industries. Nothing ventured, nothing gained.

Investment in industry, either by the private entrepreneur or by the State, is a risk business. It would be unrealistic to expect that there will not be shortcomings and failures. We should not, in my view, over-dramatise these setbacks. By all means we should try to learn from them, modify our procedures, try to identify at an earlier stage that they are not developing properly, and minimise the costs and losses that can arise. I am confident that the IDA and the Minister in Government are only too well aware of the necessity to benefit from their experiences in this regard.

The Hyster project was an ambitious one involving, as it did, the establishment in Ireland of an integrated stand alone "high-tech" industry incorporating, as the Minister informed the Dáil yesterday, research and development, specialised training, production and marketing within the Irish location. I understand that the company was successful in the area of research and development. Many Irish graduates gained experience and found employment in it in that it developed the "state of the art" product. The failure, I understand, was rooted in the marke place. The failure occurred because of a drop in the demand for one of the products. The demand failed to develop as strongly as expected because of changes that have taken place in industry's requirements and the large scale warehousing of industrial products. There was failure in the case of a second product to achieve significant sales against strong competition from other companies in the marketplace. Such failures and setbacks of new products are not uncommon. Senators will, I am sure, be able to recall from their own experience many such instances. Such setbacks have been encountered by large companies which are household names both here and abroad. Consequently, I wish to express my support for the IDA and the Government in their continued efforts to foster overseas industrial development and to urge that they should not be deterred by the occasional setback.

I call on this House to so express its support and to give every encouragement possible to the finding of an alternative project to fill the void left by this closure. I should like to conclude by addressing myself to the part of the motion calling for the continuance of the industry, given that the IDA have for months been in discussion with the company trying to achieve this and that the parent company has, as the Dáil was informed yesterday, advised that the closure decision is irrevocable. I consider that all our efforts should be concentrated on finding alternative employment.

While I very much appreciate the action of the workers in the immediate aftermath of the company's closure announcement, nevertheless I appeal to them to exercise restraint and to do nothing that would lessen the opportunity of attracting an alternative industry into this area. The lessons of the past in this regard will, I hope, not be forgotten. I hope the company will meet its full obligation to its workforce and that they, in turn, will not allow themselves to be misguided into doing anything that would frustrate the efforts — which are ongoing — to find the best possible solution to their problem. In fairness to the IDA I should say that they have made every possible effort to avert this closure. However, there is a great sadness and tragedy in that the vast majority of the workforce are young people in their mid-twenties with young families and very high mortgage repayments to meet.

I welcome the Minister's commitment yesterday in Dáil Éireann when he said every effort would be made to locate alternative industry in the Blanchardstown area. As an earlier speaker said — and my own personal opinion is — one of the best ways of tackling our serious unemployment problem is to identify home-based, viable, small industry. Small industry, by its very diversification of product and process, avoids mass redundancies in the event of the closure or the failure of any particular product. Small Irish industries must be clearly identified and given the "state of the art" technology and machinery which will enable them to manufacture a competitively priced product which will sell on the European market. I would like to see in the future more effort being made in this area.

As I said earlier small industry will go a long way to solving our unemployment. There is a vast market of 320 million people which, as yet, has not been tapped. We regret very much the sad closure and the heartbreak of these people employed in Hyster. I am confident that the company, together with the IDA, will in the short term find an alternative industry for that area.

Mr. Harte

I should like to offer my sympathy to the people who are losing their jobs. I am certainly sorry to see the business going out of existence. I hope that the rescue efforts will be successful. That is not much consolation to the people who will be outside the door. I heard the appeal Senator Mulroy made just now. I have heard such an appeal in this House on quite a number of occasions, not in the same words but in exactly the same tone. It referred to giving the IDA a chance and an opportunity because they are doing a good job. I am not arguing because I do not have enough facts at my fingertips. The general public are entitled to know a lot more about the functions of the IDA and how they go about their business. We cannot continually come to this Chamber, and the other Chamber, and listen to the story of Ferenka, Fieldcrest, Mostek and Hyster. Although AIB and the ICI have nothing to do with the IDA, nevertheless they are still relevant to the debate. We cannot keep coming in here when there are millions of taxpayers' money at stake saying: "Look, the IDA are doing a good job. We have lost 225 jobs here. That is not the full story. We are trying to get them back."

The full story is that we do not really know whether, in fact, the IDA are just a bunch of bureaucrats who have not got sufficient grasp of the situation. We have not got sufficient knowledge about them and whether, in fact, they have done a detailed investigation into the Telesis report. We have no knowledge as to whether they paid any attention to Charles Carroll's summation of the Telesis report in 1983. Charles Carroll was a senior marketing specialist at the IMI and the director of the PIMS programmes. We know they are a crowd of fairly clever people who are motivated in a certain way and who will go out to try to encourage employment. We do not really know exactly whether they have sufficient "know how" to protect the taxpayer. We are entitled to know that. The director general should tell the nation. He has been on "Morning Ireland" telling us about the problems with regard to specific industries. We want to know what the problems are with regard to the IDA. It is not a new problem. I have not got the names of my fingertips, but we can go back some years in other parts of the country — not in Dublin — to where factories were opened up by the IDA and suddenly went out of business. The next stage was that people were being retrained. There were many rescue operations. You could pick up a lot of people around the country who are trained in about five or six skills.

If a company cannot stand the pace and suddenly the rescue situation must be started up very rapidly, there must be something wrong with the investigative process. For example, let us take the situation now. Our economy is a small economy. We cannot make comparisons with the American or the Japanese economies. It must have been well known that the Japanese were "big" into the question of the type of trucks being manufactured and that to try to compete with that sort of thing was not feasible in Ireland. We have got to know what exactly the situation is, how far the position was investigated, what was foreseen and what was not foreseen. I am not levelling accusations but do not forget that this firm seemed to be set up rather hastily coming up to an election. I wonder if, in fact, it was not rushed through without detailed study.

There is roughly over £20 million in question in total. Let us take the figure of £15 million, £12 million of which the IDA explained as "people-related". It has gone into training and employment incentives. That £12 million is not recoverable for the Irish taxpayer so we are entitled to know all about it. They go on to tell us that the incentives were unusually complicated. What was unusual about the incentives? What made them complicated? Who complicated them?

I am calling now for a statement from the IDA as soon as possible on this whole question. A sum of £20.6 million of taxpayers' money is at stake. They were looking for more from the Coalition Government last year but they did not get it. We are entitled to know, on behalf of the public, the level of ineptitude which is in existence or what the problem is. Was that displayed by management, or is it actually the fault of the IDA? Who is at fault? Who is at the root of the insolvency? Were the proper financial implications examined? Were the IDA given the fullest possible information when they were setting up the deal? Quite frankly, it is very hard, even for an ordinary punter like myself, to accept that insolvent situations just emerge in a couple of weeks.

The IDA have been telling us that they have been trying to rescue the plant. The fact of the matter is that such a problem does not crop up overnight. It happens over a very long period. The danger signals must be evident to the principals. If they showed themselves to the principals then they must have shown themselves to the IDA. They must have had some indication beforehand that this type of problem was liable to crop up. Was any sort of consideration given to this? Frankly, I am a little bit upset about this whole thing. Most of the time of the trade union movement is taken up with dealing with the question of people being laid off. In this case they certainly cannot blame the trade unions, or strikes or anything else because the company would not hear tell of a trade union. Trade unions were not encouraged at all. It brings out the cynicism in people like me who believe that unemployment is not a mere accidental blemish in this economy. It seems to me that, if we are not prepared to delve into matters like this very deeply, and be more investigative about it, we can suggest — and society is no different now from what it was in the 19th century — that unemployment is an essential mechanism of the system and that it has a definite function, that is, to maintain the authority of the master over the man. That cynicism is bound to grow if we do not get to the root problem of redundancy, unemployment, lack of competitiveness, etc.

That is one argument. There is another argument about being able to absorb the people being taken off the land and so on. Then there is the argument about the creation of unemployment because of the new technological age. I am not talking about that. I am talking about the number of jobs actually lost through bad management. We had to sit down and listen to the whole business of the PMPA. We had a very sorry period over that. We saw the disastrous waste of money in Dublin Gas and we can see its effects to the present day in Dublin Gas. Where are all the investigators? Where are the people with the brains and the knowhow, the entrepreneurs who can see the pitfalls? Are they in the IDA? Why is there such a magnitude of failure? The company do not lose money. In most cases it is the taxpayer who is ultimately caught. It is a bit late now to ask the question whether better expertise would have helped, whether it was a question of organisation or whether new management was needed.

It is puzzling for the ordinary Joe to understand this: all these people with all these brains come out of colleges and institutions and are given high salaried jobs and facilities to protect the taxpayers of this nation, yet we are not certain if the job is being done right. I was called on one occasion to fill in as a substitute where a factory had gone bust in Athy. I do not know whether I took the discussion up wrongly or not — it is quite possible — but I do not think I did. I cannot even think of the name of the place now; it is a good few years ago. Part of the deal was that one of the IDA people would be a director and that meant that they would have knowledge of something. But, through some communication breakdown or some difficulty, there were goods from this place in Athy lying in the docks in Waterford for about three or four weeks and the shipping company would not put it on board because the parent company in Germany had gone bust. What sort of situation is that, if that is accurate? I am not pointing the finger at people in the IDA for being dishonest or anything else. But I am entitled to know, the same as everybody, whether they are handling the matter competently on behalf of the Irish taxpayer? That is what we are after.

Mr. S. Haughey

At the outset I very much welcome this debate as it demonstrates very clearly that the Seanad is aware and is deeply concerned about the serious unemployment and economic situation which exists in Ireland and indeed in Dublin today. The first thing I would like to do is to offer my sincere sympathy to the workers at Hyster, who will now unfortunately lose their jobs and also to their families. It is surely a very traumatic thing to be told that you now face life on the dole and the bleak future that that involves. I would appeal to the management of Hyster, to the IDA and indeed to the Minister to do everything possible to try to save these jobs. However, if that is not possible, it is vital that a very satisfactory redundancy package be negotiated for these workers and that alternative employment be sought for them.

The latest closure in Blanchardstown highlights very clearly the serious jobs crisis which now exist in the Dublin area — our capital city of one million people. A report issued last week by the Dublin Chamber of Commerce regarding the employment situation in Dublin makes frightening reading. There are now 98,893 people out of work in the eastern region. The unemployment rate in Dublin is now 19.2 per cent of the labour force. This is above the national average. The report also concluded that the level of manufacturing employment in Dublin city has declined by over one-third since 1971. Indeed, in the country as a whole we have a quarter of a million people unemployed. We are losing 6,000 industrial jobs a year. We have zero economic growth in our economy.

These facts and this latest Hyster closure must raise serious questions regarding our industrial policy. The taxpayer cannot be happy with the fact that £17 million of their money is now lost on a factory which was only set up in 1982. Nobody can be happy with a situation where a relatively minor decision taken in Portland, Oregon, can have such serious consequences regarding our employment situation in Dublin. The wisdom of depending so heavily on the foreign multinational company to meet our employment needs now needs to be seriously questioned. This closure is but one of a series of pull-outs by multinational companies in recent years. A radical review of our industrial policy is now called for. In 1980, some 240,000 people were employed in manufacturing industry in the Republic of Ireland. Of this, 80,000, or one-third, were employed in new IDA overseas firms. Dermot McAleese has estimated that 50 per cent of Irish industry is controlled by foreign interests. These are startling facts.

Ireland has been very successful in attracting foreign firms. The Telesis report states that, of every five foreign investments in Europe in the seventies, Ireland attracted four of them. Capital grants, fiscal incentives and our industrial policy ensured they came here. There have, of course, been a number of advantages to this success. Initial employment effects were good and it had a very favourable effect on our balance of payments as our exports continued to grow. However, experience has shown that these jobs were not stable. In addition, these new foreign industries had very few linkages with other sectors of the Irish economy. The Telesis report suggests that we are paying far too much for these firms and are not being selective enough.

These criticisms must now be given serious consideration. What we need to do now and what the IDA must do now is to encourage in every way indigenous manufacturing industry. They must promote the exporting native industry. Our economy will never develop fully until we have a strong native industrial base. This we have lacked since the foundation of the State. Our new industrial policy must promote this.

Finally, I would appeal to the Government to proceed without delay with their programme for economic recovery. I welcome very much the establishment of the Custom House Docks Authority to develop the 27 acre site at the Custom House docks and we all hope this will play a major role in providing much needed employment in our capital city. The Hyster closure, as I have said, now raises serious questions regarding the operations of the IDA and regarding our industrial policy. I believe that the time has now come for the Minister to undertake a radical review of the role, function and policy of the IDA. Having said that, however, I take this opportunity of wishing the IDA continued success in their endeavours in providing employment.

Mr. O'Callaghan

I too would also like to be associated with the expressions of concern in relation to the unfortunate people who have lost their jobs in the Hyster closure, but I would like to address myself to the more general situation with regard to our industrial policy.

Tragically from a national point of view from time to time when we hear of closures like the one we are discussing here this afternoon, we tend to take up the position of shooting the messenger because we do not like the message. Surely our industrial policy which endeavours to attract multinational companies to come here is, by its very nature, a high risk business. Nobody has ever come before this House, or the other House, and said he could give a categorical assurance that this industry would be in existence, ten, 15 or 20 years hence. Obviously we are entitled to presume that the company have sufficient confidence in their product and in their general organisational abilities to ensure that they will be in a position to continue manufacturing here over that period.

By the very nature of any business today, not necessarily in a manufacturing scenario but in any facet of industry or of employment that we wish to examine in our present economic climate, or in the worldwide economic climate, can we give categorical undertakings that such business will be in existence ten or 15 years down the road? One only has to look at the business Senator Daly, the Acting Chairman, is in, its volatile nature and its deterioration in a very short time. My own business is a similar case. It was booming ten years ago, yet it is in disarray today. Who would have said ten or 15 years ago that the tourism industry, or the motor trade for example, would be in a shambles today? We, as politicians, must take a fair amount of the blame for this because the demise of the multinational has been on the cards for quite some time. We, as politicians, have been overly preoccupied by the razzmatazz end of the industry. We are all there on the day the factory is being opened. We are all very happy to get our names in the paper if there is even a suggestion of a factory coming to our home towns.

Over the past decade we have not availed of the opportunity in this House or in the Dáil to pursue any kind of an indepth appraisal of the performance of the IDA. There is a definite tendency in that organisation to build empires. They tend towards elitism in the sence that they feel they know more than everybody else about the provision of industry and its well being. Senator Harte made that point. We are paying them to be the experts and we expect them to have the expertise but that does not give them a total corner on the market of intelligence or understanding of how industry works. Quite often it is felt, by virtue of the demise within a short period of some of the industries the IDA brought in, that they do not cast a jaundiced eye on any of the industries they are bringing in. They tend to bring them in on the chance that they will succeed in the long term as was well as in the short term. The activities of the IDA vis-a-vis Hyster need some examination. There must have been a tendency to respond to a degree of political pressure. Perhaps the reference to the by-election is valid. Certainly that Government were not different from any other Government in office at the time of a by-election. The need to expedite the consideration of an industry for a particular constituency is nothing new. Let us not suggest for a moment that that did not happen today or yesterday.

We are talking about £16 million or £17 million of taxpayers' money at the end of the day. We as active politicians, must accept some degree of responsibility in that we have not taken it upon ourselves to appraise on a regular basis, not just every decade or every now and again, the performance of the IDA or to examine their level of accountability which is really what we are talking about here today. Senator Manning touched on that throughout his contribution this afternoon. There needs to be a more efficient mechanism for accountability than we have at present. He commented on the confrontational response to Deputy Bruton's inquiries two or three years ago which was totally unacceptable to me. That sliver of almost contempt for the Houses of the Oireachtas in relation to any query we raise with that organisation is not acceptable. We wrung our hands, for example, when Fords closed.

There are two aspects of that to which I should like to refer. First we got a total commitment from the Minister of the day that Fords would not be let walk away with 1,400 jobs. Three years later they are still walking and the site is still vacant. In fact, it is being dismantled at present. It was a traumatic time for Cork; in fact, 22 per cent of the population of that city and county are now unemployed. The kind of commitments the people of Blanchardstown will get in the next couple of days will need to be examined very carefully because they will be as hollow as the one the people of Cork got three years ago. They would not necessarily want to be too confident about the assurances they will get about a replacement industry.

One aspect of the debate we should focus on is that the commitment should he honoured. A serious vacuum is created by the problem of Mostek and Hyster in that area of Dublin. A commitment should not only be made but should be honoured and be seen to be honoured at the behest of this House and the Dáil. It should not be a pious undertaking on the day of the debate in the House that we will replace that industry with something else. The fact is that it rarely is replaced. We should review the activities of the IDA. I hope the Minister will refer to this because I am aware that, in certain Government policy documents published prior to the last election, a commitment was made to a sizeable review of the activities of the IDA.

Let us be quite honest. They are carrying out the brief we have given them quite well. However, there is a distinct danger, in the discussions on the collapse of a multinational here today, that we will take up the position that we do not want any more multinational companies. I come from a constituency that would take a couple of dozen multinationals if we got them. I will continue to exhort the IDA to strive might and main to provide them. Nobody in this House is saying that.

I get a bit annoyed from time to time. All of a sudden now, "small is beautiful." I accept that there was a time when we had great difficulty in getting the IDA to look at any small industry. They had no interest in small industry. They were only concerned with thousands of jobs, but now they had a death bed conversion on that one as well. Even if we achieve total success in filling the small industry and the native manufacturing industry vacuum, we must never lose sight of the absolute necessity to continue to strive to get sizeable multinationals to set up here. There are extremely successful multinational companies operating here at present, giving good employment, giving good conditions of employment, producing a good product and doing well for this country. We should never lose sight of that fact.

I am aware of a debate that took place in another forum a few years ago on the departure of a multinational from my own region. Some companies felt we made them very welcome. They received assurances from local communities that nothing was impossible. We promised to provide them with any form of assistance we could. We have done that very successfully in every community in this country. We must not lose sight of the commitment the IDA give on our behalf when they go to Oregon, or Washington, or any other part of the US or, indeed, in Europe.

One of the IDA'S primary attractions in the IDA'S armoury of attractions to bring people into this country, is the level of welcome for that industry and its principals in an Irish town, city, or village. It is significantly different from the type of welcome they get when they go anywhere else. When the IDA are endeavouring to induce sizeable industries to go down the country, for example, to the west, the south-west or the north-west, the community acceptance and the general aura of good feeling towards these industrialists induce them to come here instead of going to Scotland, or Holland, or Belgium where considerable inducements are being provided nowadays. We must not lose sight of that fact either in the teeth of Hyster's unfortunate demise.

In conclusion, we should certainly avail of the opportunity as a matter of priority to examine the terms of reference and the accountability of the IDA. That is the most important thing that needs to be said here this morning. I would also like to sound a word of caution that we should continue to create the correct climate and to ensure that any efforts the IDA are making at present to induce industrialists to come in here are not inhibited in any way by anything that may be said or done in the Houses of the Oireachtas during these debates.

Minister of State at the Department of Industry and Commerce (Dr. McCarthy)

As the Senators will be aware from the various press reports and the replies given in the Dáil yesterday by the Minister for Finance, Deputy Ray MacSharry, the announcement by Hyster Automated Handling Limited that they were ceasing operations at Blanchardstown came as a great surprise not only to the Government but to the Industrial Development Authority also, who, up to the very eve of the announcement, had been in ongoing discussions with Hyster on proposals to restructure the Irish operation. I would like, therefore, to commence by reiterating the regret expressed in the Dáil yesterday by the Minister for Finance at the development and to join with him in expressing my sympathy to the workers who so suddenly found themselves faced with the prospect of unemployment.

This news is particularly regrettable in so far as the operations at Blanchardstown represented the establishment of an integrated stand-alone operation incorporating research and development, training, production and marketing in this country. In this respect it met the industrial policy criteria followed by successive Governments and enshrined in the 1983 White Paper on Industrial Policy. Senators will, I am sure, recall that it has been a frequent criticism of overseas promotion policy that it has failed to attract projects which incorporated these desirable features. I think it appropriate also to mention that both Telesis and NESC advocated that there should be positive discrimination in favour of new or expansion projects with desirable characteristics such as key business functions, stand-alone projects, and significant potential for service supply linkages — characteristics all of which applied to HAHL as originally envisaged.

HAHL, a subsidiary of the US-based Hyster Group, was established in Blanchardstown in 1982 to develop, manufacture and market a range of automated materials handling equipment destined mainly for Western Europe and the United States. The Hyster company was long recognised as a world leader in lift trucks. Established in 1929, Hyster manufactured industrial trucks, construction equipment, tractor attachments, personnel work platforms and other materials handling equipment. In 1981 Hyster had sales of $584 million and was among the 500 listing of top US companies. Employing 6,700 people worldwide, the company had seven manufacturing bases in the United States at that time. The totally integrated Irish project — incorporating research and development, manufacturing and marketing elements — was to provide a high level of employment for graduates and skilled workers. The integrated advanced technology "new generation" nature of the project made it particularly attractive for Ireland. It was to be the world headquarters for Hyster's automated materials handling systems and it was hoped that the project would create substantial spin-off opportunities in terms of linkages with universities and other third level education centres.

In 1982, the Industrial Development Authority agreed a significant support package for the Hyster project for Ireland. A breakdown of the cash grants paid to Hyster is as follows: capital grants (machinery and equipment), £2.9 million; training grants, £6.2 million; employment grants, £3.5 million; and research and development grants, £2.5 million.

In addition, the IDA provided Hyster with a custom built factory costing £6 million. As can be seen from these figures the cash grants of £15.1 million paid out to Hyster by the IDA were mainly "people orientated", consisting in the main of training and research and development grants. While much criticism is now being made in retrospect of the level of grants paid to the project, it should be borne in mind that the IDA faced very stiff worldwide competition in their efforts to attract Hyster to Ireland. Evidence of this fact can be found in the expressions of regret by the then Northern Secretary of State for Northern Ireland, Mr. James Prior, when it became known that Hyster proposed locating in Dublin despite the very attractive package of incentives offered by the Northern Ireland Development Agency.

The Hyster operation in Blanchardstown planned to provide jobs for 450 people within five years. The products involved were as follows:—

1. Automated Storage and Retrieval Equipment (ASR);

2. Automated Guided Vehicles (AGVs) and

3. Conventional Warehouse Equipment (High Rackers, Pallet Trucks).

In relation to the grant aiding of the Hyster operation at Blanchardstown all normal procedures were followed. The Industrial Development Authority, as is usual, made proposals to the Government. The Government and the Department of Finance examined these in the normal way and the grants were approved in line with normal established criteria. It is interesting that in the 1984-85 period the Coalition Government at the time — many of those who are now making cheap political capital out of the unfortunate closure of the factory — were prepared to approve a project involving State funds of £14 million as against a £1 million up front from Hyster. This project was to be located at Annacotty, County Limerick. Fourteen million pounds would have been put up by the State if Hyster were prepared to put up £1 million. However, unfortunately or fortunately, whichever it was — I am not prepared to suggest what might have happened had the project gone ahead — the company did not put up the £1 million. It is rather unusual that Ministers of an administration who were quite prepared to agree to that type of grant aiding should at present be making a lot of political capital out of the tragedy that has taken place.

Allegations have also been made that the IDA are not responsible to anyone. The Government took on board the findings of the Telesis and NESC reports, and the White Paper on Industrial Policy in 1983 incorporates the main findings of these reports. The White Paper now sets out clear guidelines for the IDA on how they must operate. The Government set the policy and the IDA carry it out. I regret that some Members of the Opposition have sought to make cheap political capital out of the closure of Hyster. We all regret the event and sympathise with the workforce and their families. Innuendo has been made that the decision to grant aid the project was related to the Dublin West by-election in 1982. This is not so. The decision was made after a full and proper investigation into the viability of the project. It was a policy decision and not a political decision at that time. It is easy when a project fails to throw blame irresponsibily all round.

IDA bashing at this point in time is becoming fashionable. This is unjustified. The IDA have done and are doing an excellent job in marketing Ireland as an ideal centre on the periphery of Europe with easy access to the vast European marketplace. However, we rarely hear anyone compliment them on their successes. Opposition politicians who go for the easy option of crying when failures occur and silence at success stories should analyse the lack of balance in their own expressions, which too often are totally one-sided. It is important to note that in the first three years of the project, from 1982 to 1985, sales and employment targets were met and in fact actual employment levels exceeded target levels for each of those years as follows:

Year	Employment target	Employment level
1983	79	103
1984	174	226
1985	268	289

However, during the course of an IDA review of the project, in early 1986, it emerged that significant shortfalls would occur in sales and profitability targets for that year. The project was failing to develop as planned for a number of reasons. The principal ones were as follows:

There was a downturn in the world market for the company's major product category — Automated Storage and Retrieval Equipment (ASRs) failed to develop as envisaged because of the effects of "just-in-time" stock management techniques. This particular management approach is a fairly new phenomenon and as a consequence of this the market predicted for ASRs worldwide did not develop on the scale expected.

Sales of Hyster's second major product category — Automated Guided Vehicles (AGVs) proved insufficient to absorb the overheads of the Irish plant and a longer than planned for time was taken to perfect the new product.

It must be borne in mind that the project was a major departure for Hyster into sophisticated products which had to be developed, manufactured and sold into totally new markets for the company. The plan was that the Irish operation, being fully integrated, would have sole responsibility for all stages of the operation from concept through to design and manufacture and subsequently for marketing worldwide. By its very nature the type of operation is high risk because of the amount of R&D which must be carried out. Nevertheless successive Governments have appreciated that this type of fully integrated, stand alone overseas operation is the kind we wish to attract to these shores and this is set out clearly in the White Paper on Industrial Policy.

At the peak stages of the project, towards the end of last year, 289 people were employed and a range of new products had been developed at the plant for markets worldwide. The IDA had paid £15 million to Hyster mainly in relation to the people-related activities of the investment. The most significant proportion of grants paid related to the comprehensive advanced training programmes, the research and development activities and employment grants. Some £2.9 million of IDA grants related to capital investment by the company. In addition the Authority provided a custom built factory at a cost of some £6 million. This factory was to be purchased by the company in the period 1988-92. The company was also the recipient of grant assistance from Córas Tráchtála of £0.553 million. When it became apparent during the course of the 1986 review of the project that it was not developing on course, the company undertook a review of the whole business operation with the IDA. This indicated a need for a restructuring of the company's plans, particularly in the light of its failure to achieve targets.

The Hyster company was up until Tuesday of this week in discussion with the Industrial Development Authority on a modified business plan for the company, concentrating on those elements which might have potential for providing the basis of a viable business over the long term. Any such plan would have involved a fundamental restructuring of the Dublin plant, involving the transfer of its AGV production to one of Hyster's US plants while at the same time introducing certain new products and activities in order to increase the volume of throughput at the Irish plant. In the event, however, the company informed the IDA of their decision to close the Irish operation entirely with the subsequent loss of all jobs at the plant. The IDA have advised that the company's decision is irrevocable.

While the loss of this operation has come as a great disappointment, the immediate priority for the Industrial Development Authority will be to pursue every avenue open to them in order to provide new opportunities for employment of the Blanchardstown workforce. This House can be assured that no effort will be spared to achieve that goal.

Notwithstanding this setback, however, the Industrial Development Authority's foreign industry programme continues to sustain 80,000 jobs in Ireland with a growing proportion of companies incorporating research and development, marketing and other key responsibilities into their operations. The Industrial Development Authority strategy, as dictated by the White Paper on Industrial Policy, to have these key elements located here in Ireland, continues to be the best way forward towards establishing a solid industrial base for this country.

I might point out here, because it has received very little attention from the media, that in the Hyster case the company invested around £4 million of their money in the project, money which is now lost to the company and which can only be seen as an indication of the company's belief that the Irish operation would prove viable in the long term. As I have said previously, it was only in 1986 that results began to fall seriously short of targets resulting in serious losses at the plant, a situation which has continued and has ultimately led to the most unfortunate decision now taken by Hyster to close the Blanchardstown plant.

With regard to the question of repayment of grants, the Industrial Development Authority are, I understand, entering into discussions with the company on this particular point and expect to issue a statement today dealing with this aspect of the matter.

With regard to the question of the continuance of the industry at Blanchardstown, the Industrial Development Authority were working directly with the company over the past three months towards achieving that very aim. It had been hoped that a modified operation would continue at the Blanchardstown plant but the company themselves ultimately took the decision to close down the operation entirely. If this decision remains irrevocable, then, as I have already said, the Industrial Development Authority will leave no stone unturned in their efforts to attract an alternative industry to Blanchardstown.

Mr. Manning

I will be very brief in my reply. I wonder if the Minister was here for the same debate as I was. I deeply regret the tone of his reply. The four or five speakers who contributed were extremely well balanced, informed and moderate.

Dr. McCarthy

Not the Members of this House.

Mr. Manning

Senator Harte and I are annoyed at the tone the Minister adopted because we raised certain fundamental questions which we were entitled to raise about the disbursement of public funds. We raised questions about the way in which the whole question was processed. We have had some information from the Minister today, but I certainly take great exception to any suggestion that we indulged in IDA bashing in this House. The questions raised by Senator O'Callaghan, Senator Harte and myself, among others, were of a very fundamental nature: whether the IDA have been too insulated from public scrutiny of their policies, whether the IDA have too strong or too dominant a role in the shaping of industrial policy and, most of all whether there has been an imbalance between large multinationals and indigenous local industries and whether we are at some risk. The Minister has, to some extent, answered some of these questions. I certainly believe it is our public duty at this stage to raise these questions. I regret the tone the Minister adopted in his reply and the suggestion that Senator Harte and I were making political capital, cheap or otherwise, out of the plight of the lost jobs and the loss to Blanchardstown which has occurred.

In conclusion, however, I hope, and I think everybody in this House sincerely hopes, that the efforts of the IDA and of the Minister's Department to secure an alternative industry for Blanchardstown will be successful because at the end of the day that is what really counts.

Question put and agreed to.

Sitting suspended at 1.45 p.m. and resumed at 3 p.m.