Thursday, 11 March 2004

Questions (8, 9)

Pat Rabbitte

Question:

9 Mr. Rabbitte asked the Tánaiste and Minister for Enterprise, Trade and Employment if, in regard to her statement of 2 March 2004, she will outline any steps she intends to take to secure alternative employment for the Donegal area, following the announcement by Unifi Europe that it is to close its spinning operations in Letterkenny; and if she will make a statement on the matter. [8073/04]

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Dinny McGinley

Question:

37 Mr. McGinley asked the Tánaiste and Minister for Enterprise, Trade and Employment the action that has been taken secure replacement jobs in Donegal following the recent spate of job losses in the county; and if she will make a statement on the matter. [8010/04]

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Oral answers (8 contributions) (Question to Minister for Enterprise)

I propose to take Questions Nos. 9 and 37 together.

It was with deep regret that I learned earlier this month of the decision by Unifi Europe to shut down its polymer and spinning operations, with the loss of 120 jobs. IDA Ireland is in the process of setting up a meeting with the company to discuss its future plans. FÁS has already been in contact with Unifi Europe and has outlined the full range of services available. It is proposed to hold interviews for the workers being made redundant, commencing next month.

The Tánaiste recently had meetings with delegations from IBEC north west and the Donegal County Development Board to discuss the employment situation in the area. The key to enhancing employment in the north west is the development of infrastructure in the area, in particular roads, water, electricity and gas, air access and broadband communications. Recent developments include the provision of funding for the Letterkenny water supply scheme and the approval of a feasibility study grant for the extension of the natural gas pipeline from Derry to Letterkenny.

IDA Ireland continues to strive to secure new investment for Donegal and is committed to the development of the north-west region by maintaining the maximum level of existing jobs in overseas industry and by attracting new foreign direct investment into the region. Efforts to secure investment include working with Invest Northern Ireland on a virtual cross-Border park, which will improve telecommunications infrastructure on a cross-Border basis, the development of property in the region, and the completion of the Letterkenny business park, while work by Donegal County Council to extend the Letterkenny ring road to this park is well advanced. Work has now been completed on the provision of a second IDA advance factory at the park and planning permission has been granted for a third advance facility. Planning permission has been obtained also for new factory facilities at Ballyshannon and Buncrana.

As two oral questions have been taken together, 12 minutes, rather than six have been allotted to deal with them.

The Minister of State's response seems to fall into a category. As soon as there is an announcement of job losses and redundancies, the Tánaiste is in sympathy with the people, but that is about the size of it.

The Minister of State outlined the infrastructural works, which are not his Department's affair and are part of the national plan. What specifically is the Minister who is charged with responsibility for job maintenance doing in the job black-spots? Clearly, Donegal is a jobs black-spot now. What specific action will be taken in response to the loss of 120 jobs at Unifi Europe? In recent weeks job losses have occurred in Donegal, Portlaoise, Mayo and Cork — the litany goes on.

Last year we had the highest level of redundancies in 19 years and in February 2004 redundancy notifications rose by 13% with 2,353 redundancies, one of the highest levels of increase in redundancy notifications for a very long time. Figure provided in reply to a parliamentary question show a continuing haemorrhaging of industrial jobs from our economy in the past number of years. These job losses are being masked by the uptake of public employment directly by the State.

The declining manufacturing base is a real issue. What measures will the Minister's Department take to address unemployment black-spots such as Donegal? What strategies does he want to put in place to stop the decrease in manufacturing employment, which has become a feature of the past three years?

Unifi Europe announced that owing to the market for polyester yarn remaining extremely competitive, the company is restructuring in an effort to regain competitiveness. This involves the lay off of 120 staff. The company will shut its polymer and spinning operations and consolidate its texturing operations in a modern and cost effective plant. It will now fulfil its internal POY needs through world market purchases. The company has closed a dyeing facility in Manchester.

The IDA has been working closely with this company in the past two years to try to address some of the issues facing the company. It will continue to work closely with company in meeting its business needs in the new scenario, although all the issues facing the company are in the area of competitiveness and costs. However, the IDA will endeavour to ascertain what can be marketed as soon as Unifi Europe clarifies and outlines plans for the spinning plant and building and so on.

In the wider context, both the IDA and Enterprise Ireland are involved in a very intensive programme to give support to companies facing competitive pressures from Eastern Europe and the Far East. There is an ongoing programme of upskilling, research and development, of finding new products and processes in companies throughout the country. The three State agencies, IDA, Enterprise Ireland and FÁS, are taking a proactive approach to retraining and upskilling people, and to change in the manufacturing process and products. The Deputy can be assured that pressures from lower wage economies are being addressed in a proactive way.

It is probably a coincidence that on the day the Minister is replying to questions on Donegal, one of Donegal's flagship industries, Unifi Europe in Letterkenny, has announced a further 120 job cuts on top of the 250 job cuts last year, a loss of 375 jobs in less than a year. The same scenario is being repeated all over County Donegal. Is the Minister aware that the Central Statistics Office report of the last census shows that unemployment in County Donegal is the highest in the country at 15.6%?

The resources promised for the BMW region in the national development plan are falling far behind target. The report of the three year review of the national development plan shows that investment in these areas is 41% lower than the sum promised. This is one of the reasons for the devastation on the jobs front in the west and north west, in particular in County Donegal.

Can the Minister of State give any indication or hope to the thousands of people in question? In my parish, 1,000 jobs have been lost over the past three years while only 200 have been created. That is a net loss of 800 jobs. People are looking for alternatives and leaving the county in droves.

The IDA has been able to attract new investment in emerging sectors in Donegal including international services, medical technology, software and high-end engineering. The transition to a high skill, high technology regional economy will take time to achieve.

Unfortunately, the rate of job creation has not kept pace with the rate of job loss. Job gains in IDA supported companies in Donegal were 67 in 1999, 308 in 2000, 352 in 2001 and 179 in 2002. The IDA has radically changed its policy and is committed to delivering half of all new greenfield jobs in Objective One regions in the coming years. A number of positive initiatives have resulted and they will continue to be developed in 2004. As a result of its expansion, PacifiCare Health Systems Ireland continues to actively recruit, as does Prumerica Systems Ireland. The Keith Prowse project which was announced in 2002 represented a great achievement for the Buncrana area.

I have often raised these issues with the Tánaiste's office and I mean no disrespect to the Minister of State, Deputy Fahy, in expressing my disappointment that she is not here to answer questions. Despite working on the ground, the agencies are not being seen to deliver. I mean no disrespect to them either when I say that the necessary jobs are not being created.

An innovative approach must be taken in Donegal. I have watched the haemorrhaging of jobs from the textile industry and there has been enough time to examine their replacement. We could diversify into marine tourism, but the Department of Marine and Natural Resources says it cannot involve itself in tourism policy. The dredging needed to allow ferry navigation cannot be carried out because the Department only dredges in respect of fisheries. It is ridiculous.

While I do not underestimate the extent to which action is being taken on job creation and the infrastructural development referred to by the Minister of State, it must be co-ordinated across Departments. If the Derry-Coleraine train service closes — and it is under threat — another link to the north-west will be gone. That is what happened in the 1960s and it must be prevented.

Someone has to sell our message. We have an international port, an airport, ferry links, third level colleges and a great environment, yet people are emigrating to find jobs. At the same time, people are receiving work permits to take up jobs which cannot be filled in certain parts of Donegal. There are two sides to the equation. I ask that some effort be made. The Minister of State spoke about a virtual park, but why can we not have a real cross-Border park also? According to the national spatial strategy, Letterkenny and Derry should be treated as a unit.

The Tánaiste is not here as she is chairing a European Council meeting in Brussels. I accept the opinion of Deputies that circumstances in Donegal are not good. Every effort must be made to prioritise the county and to ensure that agencies promote overseas visits in particular. It is my understanding that the IDA is operating in that manner. Enterprise Ireland is engaged in an intensive effort to create more opportunities and jobs in Donegal.

While infrastructure is a cause of concern, I have outlined some of the developments which are taking place in that regard. I accept Deputy Keaveney's point that there is a need for a greater degree of cross-departmental co-operation in terms of job creation measures. Certainly, I will bring that to the attention of the Tánaiste and the Taoiseach.

Written answers follow Adjournment Debate.