Company Closures.

I wish to share a minute of my time with Senator Camillus Glynn.

I call on the Minister for Enterprise, Trade and Employment to request the appropriate State agencies to take all necessary steps to ensure that Iralco in Collinstown, County Westmeath, remains in production on terms satisfactory to the management, the unions and the employees. The liquidation of Iralco has been, to say the least, a body blow to the community in north Westmeath, north Meath, Cavan and Longford, for which to company, a major manufacturer of motor components of high quality, has provided substantial employment since 1964. Iralco has been the biggest employer in our area over the past 44 years, producing high-quality products. The skilled and experienced staff were preceded in their positions by their fathers and mothers and by yet another generation, the pioneers of the 1960s.

There is no other employment in north Westmeath, with the exception of Mergon in Castlepollard, the HSE and the local county council, which at present employs ten to 12 people. To say that 420 job losses is a body blow to the area is an understatement. The shock announcement this week of the company's liquidation represents the taking away of the life blood of our area. From an urgent meeting I arranged last Monday evening with colleagues from political parties and our county manager, Mr. Danny McLoughlin, I understand that the closure is due to the high cost of energy, which has escalated over the last two years in particular, the strength of the euro, which is not helping the cause, and the rejection of a cost-cutting plan in a ballot of the workers. The latter is understandable as workers have not had an increase in wages since 2006. Ultimately, however, jobs are more important, and the survival of this company is of the utmost importance.

The company's order book, which is substantial, was the subject of attempts at confirmation yesterday and today by the liquidator appointed by the High Court. It contains the names of some of the biggest motor manufacturers in the world, including Ford, Volvo, Volkswagen and Bentley. All the major manufacturers are supplied with components by this factory. With 420 workers in Ireland and 100 in the Ukraine, Iralco has been a major employer, with a turnover of more then €25 million per year and a wage bill of €8 million per annum. There is nothing that can be done to compensate the people who are to lose their jobs except to do everything we can to keep this factory alive and running.

For the last 44 years we have had a high-quality, skilled and dedicated workforce. The Government now has an opportunity to engage in upskilling and training it. I welcome to the House the new Minister of State with responsibility for innovation, Deputy Michael Ahern. The amount of funding available for research and development, which represents the jobs of the future, means that this is an area that could be of crucial assistance to the liquidator and the company as they consider what can be done to retain the jobs in the Collinstown area.

Although I only have four minutes, I could speak for much longer about the difficulties faced by those living in the area. The loss of 420 jobs in one fell swoop is a major blow to an already fragile economy. The north Westmeath region, as the Minister will realise, is reeling. The workers went to work on a Monday morning and were told later in the morning that a liquidator had been appointed, their jobs were gone, there would not be any pay packet on Friday, and they were to go home. This is the worst possible news any worker could imagine in their wildest dreams.

I ask the Minister of State whether it is possible for the Department and the agencies to come together to fulfil the orders in the excellent order book and save the 400 highly skilled staff who have a track record in this specialised area of manufacturing. I want to be assured, as the local Oireachtas Member in the Meath West constituency — which includes north Westmeath, in which Iralco is by far the largest employer — that the Minister will assist in whatever way the Government can. This is not a fly-by-night company, but one that has made an immeasurable contribution to our area for three generations. I look forward to doing anything I possibly can with regard to working with the Department and the agencies to assist in the plight of the Iralco workers, the management of Iralco, and everyone affected by this in the communities of north Westmeath.

I welcome the Minister of State to the House and thank my colleague for allowing me to speak on this important issue. This has been a crushing blow to the area by any standards. It is the stuff that nightmares are made of. Young people with mortgages and other financial commitments have found themselves with a job today but out of work tomorrow. This area has seen its population decline in the past, but there were positive signs of a renaissance, which was in no small measure due to Iralco and the important employment outlet it provided. I have more than a passing interest in this factory for the simple reason that my sister-in-law works there, her son is health and safety officer in it and her husband worked there for many years, as did another son. The CLÁR programme covers 90% of that area so that of itself speaks volumes.

The knock-on adverse implications of this decision will have a detrimental effect not alone on the many young people employed there who have mortgages and other financial commitments but also on the many service jobs that the employment of 420 people has provided. As my colleague has said, €8 million of an annual wage spend in an area is a substantial sum of money. This closure would have a serious effect on a large town or even a city. In a mainly rural area it is absolutely detrimental.

I ask that no effort be spared, no stone left unturned to ensure replacement employment is found and the very strong, skilled talents of the workforce are brought into re-employment as soon as possible. We are talking not only about Collinstown but also Delvin, Castlepollard, Fore, my own parish of Killucan-Maharney and parts of west Kildare. We are not talking about a particular area in north Westmeath but also about Longford and Cavan, a very large area which saw major benefits from this important employment outlet.

I express my gratitude for being allowed to speak on this matter. I wish the county manager and all the players who are trying to resolve this major difficulty the very best of luck. I hope a replacement employer can be found. People will travel a long way before they find the skills levels of those who have lost their jobs. The best day's work the Minister of State's Department can do is to ensure a replacement industry is found or that someone takes over the present company. As my colleague has said, the order book is quite full and I believe the enterprise could be taken over as an ongoing concern.

I thank Senators Cassidy and Glynn for speaking on this very important matter. On Monday, 12 April, the company issued a press statement to say it was closing down and that liquidators had been appointed. I understand the liquidators are carrying out an initial assessment and will speak to employees, suppliers and customers in the coming days and weeks. The Government and development agencies await the outcome of the meetings between the company, union representatives and the liquidator. All efforts will be geared to saving as many as possible, if not all, of the jobs.

As the Senators have stated, this company has been a significant employer in County Westmeath since 1964 and if it is to close its operations in Collinstown, this would be very disappointing. The loss of these jobs would be especially devastating for the workers and families directly involved and, indeed, for the community.

I understand the company had incurred losses for the past three years and was projecting losses in 2008 and 2009, even though some strategic investment was under way. The company's business plan was projecting 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 informed IDA Ireland recently that jobs were at risk if specific industrial relations issues concerning pay increases could not be resolved. Extra funding was needed also to proceed with the investment it had planned for the Ukraine, which was crucial to the future of the Irish operation. The timeframe on this decision was immediate. The Government recognises that the closure of the company and the loss of some 400 jobs would be a serious blow for the region and the IDA is keen to work with the company to secure its future. The IDA has offered to assist the company by lending its support to resolve the industrial relations situation through discussions with the union at senior level and discussions with shareholders.

On resolution of the industrial relations and funding issues in the company the IDA has confirmed to the company that it would look at support for training, consultancy and research and development in Collinstown based on its future business plan. IDA Ireland 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. Despite the input of the Labour Relations Commission, however, and the IDA having 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 unfortunately has not borne fruit.

The Minister for Enterprise, Trade and Employment, Deputy Micheál Martin, has contacted the company directly and he reiterated that the Government agencies remain available and willing to provide any assistance or to take any steps possible to ensure the company remains in production on terms satisfactory to the management, unions and employees. I assure the Senators that IDA Ireland is in ongoing contact with the company and it will continue to work very closely with its representatives during this challenging period.

IDA Ireland is also working to develop the knowledge economy in the county in order that the region can compete nationally and internationally for foreign direct investment. In the past five years, the agency has promoted County Westmeath as part of an integrated midlands region with access to a population base of 310,127. Westmeath traditionally has been a centre of manufacturing for foreign direct investment but like other counties it has seen a number of closures within the multinational sector as global investment shifts to low cost destinations.

To respond to this situation and as part of the transition and re-positioning of the region to a more knowledge-based economy, the IDA is marketing the midlands gateway of Athlone, Tullamore and Mullingar as a key location for investment in medical technologies, international financial services and information and communications technology, ICT. Some progress is evident with companies such as Kinetic Concepts, Teleflex Medical, Georgia Tech Research Institute, AXA Assistance, Elan Corporation and Alienware Corporation establishing or expanding operations in the county. There are more than 21 IDA companies in County Westmeath employing more than 2,298 people. Enterprise Ireland has 119 companies that employ more than 3,000 people.

The Government is not complacent and is well aware of the challenges ahead, not only in a global context but especially in County Westmeath. The Government is investing in the physical infrastructure required to attract today's foreign direct investment to County Westmeath. This includes investing €3.5 million in a quality flagship business park in Athlone which is now an integral part of the agency's international marketing programme. The IDA also has purchased 70 acres of land at Ardmore, Mullingar. The site has been master-planned and phase 1 construction is complete.

The effects of globalisation are felt in even the smallest markets and global competition will intensify and extend its reach. The Government has recognised the inevitable changes taking place across world markets for both trade and investment. Enterprise policies that equip companies with the ability to compete better in world markets, capture the opportunities from globalisation and build 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. Low wage costs are no longer an enticement but have been replaced by other attractions. These include a competitive tax and regulatory environment, a better educated workforce, 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.

While I am conscious of the effect that any job losses will have on the workers involved and their families as well as on the local community, I assure any people affected that the Government will give every support it can to develop new employment opportunities. The role of FÁS, the State training agency, will be particularly important in assisting people should any jobs be lost. FÁS will be able to provide advice and training opportunities for the Iralco workforce. The agency will make its full range of support services available to the workers. When job losses occur, the Government, through the State development agencies and other interested parties, adopts a co-ordinated approach in dealing with the situation. They all work together in making the employees aware of the supports available to assist in finding new employment or to start their own businesses.

I am confident the strategies and policies being pursued by the State development agencies will continue to support enterprise development and job creation in the area. I wish to 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 County Westmeath.