asked the Minister for Agriculture and Fisheries if he will make a comprehensive statement concerning the withdrawal of a firm (name supplied) from operating their factory in Letterkenny, County Donegal; what measures were considered by his Department in an effort to persuade that company to continue manufacturing; and what proposals he now has for the re-employment of the staff who have become redundant.
Ceisteanna—Questions. Oral Answers. - County Donegal Factory.
37.
I was advised by the foreign-based firm concerned that its decision to cease milk processing operations at Letterkenny was in pursuance of a policy to cease or reduce such operations in a number of countries. For a considerable time before it ceased operations at Letterkenny, I was in constant touch with the firm with a view to ensuring that the interests of the milk producers in the area and the workers at the factory would be safeguarded. The firm was not prepared to reverse its decision to cease operations at Letterkenny at the end of 1969, but subject to certain conditions it would have been prepared to continue for a few years as a sleeping partner in a milk processing enterprise there. The conditions proposed were not, however, acceptable to the local co-operative societies.
Towards the end of 1969 the firm agreed to sell the factory to the co-operative societies. They made it clear that the relatively favourable sale terms offered by them were intended as a gesture to the Donegal milk producers and they expressed the hope that the societies would retain the permanent workers. The societies are now in possession of the factory but, so far as I am aware, they have not yet formulated definite long-term plans. I offered to arrange for the Dairy Disposal Company to participate in the development of milk processing in the area but this offer has not so far been accepted by the co-operative interests.
Am I right in saying the Minister ignored the Nestle company when they made certain proposals to his Department in December, 1968, and Nestle made repeated representations to the Minister and his Department between that date and July, 1969, when the Department stated they were prepared to consider the proposals? It was then too late and Nestle told the Department that the policy of the firm at that stage was to withdraw. Is the Minister further aware that there are now no proposals whatsoever for this factory in 1970 and is he prepared to accept full responsibility for treating this matter with complete indifference, disregarding the claims of the men who had been employed there for 14 or 15 years and not concerning himself in the least with that side of the Border, where he should have been concentrating his attention, something for which he is paid and keeping his nose out of something for which he is not paid?
Everything concerns me.
This should concern the Minister most. There are 14 people out of employment.
For the Deputy's benefit, I want to tell him——
The Minister did nothing.
—— I have here four pages of what I have been doing and I propose, with the permission of the Ceann Comhairle, to read them for the benefit of the Deputy and for the benefit of the House. This is a synopsis. There is no filling-in of other things that took place.
I could write what the Minister has done on the back of a postage stamp.
When it comes to election time, as the Deputy well knows——
That is a sticky wicket for the Minister nowadays.
The Deputy knows who turns his back on whom and he knows how nearly backs were turned on him. If there had not been a few charity Fianna Fáil votes thrown in his direction he would not be sitting over there now.
We had the Minister in his bare feet for three weeks. We kept the Minister in his box during the campaign.
This is what the Deputy thought but, mark you, I got a fair distance and made a fair impression as well.
The Minister is not just as welcome now.
Do not be codding yourselves. Wait until you hear this and I shall be welcome all over the place.
The Minister is a small boy in the constituency.
He beat you in your own town.
On 9th March, 1967 — I presume that is going back far enough for the Deputy; he talked about 1969 — the Letterkenny Co-op wrote to the Department complaining that while Nestle would handle the full 1967 Donegal milk supply they were not prepared to give an undertaking to handle the extra production of milk anticipated in 1968 and onwards. Nestle had suggested that the co-ops should become more independent in relation to disposal of surplus milk.
"On 30th May, 1967, Minister discussed matter with Mr. Manahan"— that is the boss-man of the United Kingdom end of the entire international Nestle's operations as perhaps Deputy Harte is aware — but at any rate on 30th May I discussed the consequences for milk production in Donegal if producers had to endure a long period of uncertainty about the handling arrangements for their milk. Mr. Manahan explained that additional capacity being installed at Letterkenny would suffice for 1967 and probably also for 1968. To deal with any further increase in production a whole new factory would be needed and the Swiss headquarters of Nestle were undecided at the time as to what their future overall policy in relation to processing should be.
"On 19th October, 1967 Department invited Mr. Sanderson (Nestle) in to discuss future arrangements for dealing with the Donegal milk supply, arrangements for 1967 having proved relatively satisfactory."
We know all that——
Wait for it, Deputy. You want to be fully alert as to what you are discussing before you go back blathering again as you did last week-end.
On 21st November, 1967, Mr. Sanderson of Nestle (Belfast) informed the Department that having successfully handled the 1967 supply they proposed to instal a further roller powder unit at Letterkenny and intended also to instal a pre-condensing unit, to deal with increasing supplies in 1968 and 1969.
On 12th January, 1968, Minister wrote to Mr. Manahan pointing out the inadequate nature of the handling arrangements at Letterkenny and expressing doubts as to the adequacy of the arrangements the company had in mind for 1968 and 1969. He invited the company to say whether they had any further proposals in mind.
On 7th February, 1968, Minister met Mr. Manahan who stated that Nestle were examining the possibility of setting up a new plant at Letterkenny for making skim powder and butter-oil at an estimated cost of nearly £600,000. Possible participation in this venture by the Dairy Disposal Company was offered.
In early April, 1968, Mr. Manahan submitted memo to the Minister outlining 4 possible ways (including that mentioned at meeting of 7/2/1968) of dealing with the Letterkenny processing problem.
On 3rd May, 1968, Minister replied furnishing comments on each of the four possible ways suggested, indicating that he would welcome a meeting with Nestles on the suggestions particularly that for skim powder cum butter oil production.
On 8th May, 1968, Messrs Manahan and Lester of Nestle had meeting in the Department and indicated that Nestle had just closed a factory in Scotland and that it would be useless to approach Swiss headquarters for further capital for Donegal. If, however, the existing assets at Letterkenny were to be contributed as Nestles share of a joint enterprise with Irish interests (the D.D. Co. and possibly local co-ops) a skim powder cum butter oil factory might still be possible.
On 9th July and 14th October, 1968, the Department had talks with Nestle representatives at which it became clear that Nestle's participation would be confined to its Letterkenny assets (which they appeared to overvalue) and also to their know-how and some help on marketing.
On 2nd December, 1966, Department wrote to Mr. Manahan indicating the Minister's disappointment at the limited effort of Nestle and the high valuation it placed on its premises.
On 9th December, 1968, Minister met Messrs Manahan and Sanderson and expressed his disappointment with their earlier efforts to get a spray powder-butter oil factory established. They said that in view of closures elsewhere by Nestle there was no hope of further investment by them in Donegal. If the skim-powder cum butter oil project went ahead, the products could be sold through Nestle at world prices.
On 12th February, 1969, at meeting in Department Messrs Lester and Sanderson of Nestle handed in for consideration outlines prepared by the company of two alternative schemes for the provision of a skim powder-butter-oil factory in Letterkenny. No investment other than the existing premises at Letterkenny would be forthcoming from Nestle and they would hope that the necessary cash would be provided by the D.D. Co. and the local co-ops together with an IDA grant.
On 21st March, 1969, at meeting in Department Mr. Deignan, Manager, Letterkenny Co-op, stated that he was not enamoured of the latest Nestle proposals for a skim powder cum butter-oil factory. His own personal view was that the co-ops should go ahead and provide their own central churning and skim condensing facilities and allow Nestles to carry on as they have ben doing. The value of their Letterkenny premises had been grossly overrated by Nestle, Mr. Deignan added.
On 22nd May, 1969, at meeting in Department Mr. Manahan of Nestle stated that their Letterkenny factory would have to cease operations at the end of 1969 in accordance with decision taken by the Nestle Board in Switzerland. Mr. Manahan was informed that the Nestle proposals for a skim powder cum butter-oil factory were not entirely attractive and that the question of setting up central churning facilities in Donegal was being considered by the co-operatives as an alternative approach.
On 10th July, 1969, at meeting in the Department Mr. Deignan (Letterkenny Co-op) and Mr. Reid (Finn Valley Co-op) were informed of the Nestle decision to cease operations at Letterkenny at the end of 1969. They expressed the desire to have new outlet that would use the whole milk, as butter churning and skim condensing would employ considerably fewer personnel than did the Nestle factory. It was suggested to them that as no acceptable ready-made proposal for using whole milk was available they might consult Nestle about using the Letterkenny facilities for condensing and also McCormac Products about suitable arrangements for disposal of condensed skim.
On 31st July, 1969, Mr. Manahan phoned the Department and, referring to the Minister's expressed disappointment at the earlier Nestle proposal to establish a skim-powder cum butter-oil factory, inquired whether the proposal might go ahead if Nestle were to agree to invest cash in the project as well as their Letterkenny premises.
On 23rd August, 1969, Minister discussed with Mr. Manahan the latter's recent proposal involving cash investment by Nestle in the proposed new factory for Donegal in which the Dairy Disposal Company and the local co-ops would also be asked to participate. The Minister asked Mr. Manahan to approach his Swiss authorities in the matter.
On 28th August, 1969, at meeting in Department Messrs. Deignan and Reid were informed of Mr. Manahan's latest tentative proposal and asked to consider it urgently.
On 9th September, 1969, at meeting in Department Messrs. Deignan and Reid said that the proposed butter-oil cum spray powder factory would mean a reduction of 2d. per gallon in the price of milk, which would cause a serious decline in milk production. In any event, in Mr. Reid's opinion, the small scale of operation would hardly be economic. The proposal would also need to include provision for dealing with the 1970 supply. While they inclined to the view that they would be better off to embark on butter production for local roll trade and condense the skim, they would prefer to await whatever concrete proposal Nestle might put forward before coming to final decision.
On 19th September, 1969, Department officials went to the Nestle group's headquarters at Vevay, Switzerland. They expressed disappointment at the news of the coming closure of the factory in Letterkenny and emphasised the moral obligation the company had incurred towards the milk producers in Donegal who had expanded production to meet the factory's needs. They also stressed the fact that through the Dairy Disposal Company the Government would be partners in the type of proposal Mr. Manahan had put forward and pointed to the prospects for our milk industry in the EEC. The Nestle representatives stated they would reexamine the whole matter closely and submit shortly a firm proposition for consideration. They would also include some proposals for dealing with the 1970 supply. However, they made it quite clear that they could only consider continuing as a sleeping partner and that they would have to recover within five years at most any further cash they might invest plus the value of the factory.
On 3rd October, 1969, at meeting in Department Messrs. Deignan and Reid were informed of the discussions with the Swiss Nestle authorities. It was indicated to them that the hopes of getting a worthwhile proposal from Nestle were not very good and that it would be advisable for the co-ops to consider urgently what alternative course they should adopt. They appeared to consider that butter production cum skim condensing would be the best alternative.
On 28th October, 1969, concrete proposals obtained from the Swiss Nestle authorities. They put the cost of a skim powder cum butter-oil plant at £250,000, of which £150,000 was assured to be met by IDA grant. The £100,000 balance would be met as to £45,000 each by Nestle and the Dairy Disposal Company and £10,000 by the co-ops. The factory would be valued at £35,000 —their present premises—and so Nestle's share would be £80,000 out of £135,000. They would require this £80,000 to be repaid over five years, interest being reckoned at 9 per cent, that is a total return to Nestle of about £20,000 per annum.
On 5th November, 1969, Mr. Deignan informed the Department that the latest Nestle proposal (copy of which he had received from the Department) was completely unacceptable. The co-ops would be interested in buying the Nestle factory as agents for McCormac Products if the price was reduced to about £10,000-£12,000.
On 14th November, 1969, Department informed Nestle that their proposal was unacceptable to the co-ops, but that the co-ops would be interested in purchasing the factory at an appreciably lower price than the £35,000 already mentioned by Nestle.
On 1st December, 1969, following discussions between Nestle and the co-ops in November, Nestle now informed the co-ops that they could have the factory for £10,000, this price being a gesture towards the Donegal producers and workers. Nestle hoped that the co-ops would retain the permanent employees.
On 6th and 8th December, 1969, Department contacted Nestles about threatened laying off of workers before Christmas. Assurances obtained that no precipitate action would be taken.
On 19th December, 1969, Mr. Deignan informed the Department that Nestle would not sell the factory to the co-ops for £10,000 if as they proposed it were to be handed over to McCormac Products. The proposed deal was therefore off.
On 22nd December, 1969, meeting in Department with Mr. Deignan who said co-ops committees had decided that they would not buy the factory unless they could resell to McCormac Products. He said they could churn the butterfat (possibly at Leckpatrick in the Six Counties until their own churning facilities would be ready) and condense the skim for McCormac Products. The Department stressed the position of the employees and said that the Dairy Disposal Company could perhaps move into the area.
Mr. Lester of Nestle informed the Department that they would be prepared to sell the factory to the Dairy Disposal Company at the £10,000 figure provided it would be in the interests of the milk producers and the factory employees.
On 23rd December, 1969, Mr. Deignan informed the Department that the co-ops had decided to buy the factory for themselves and not to tie themselves to McCormac Products.
Immediately before and after Christmas there was continuous contact with Nestle and the co-ops about the situation, in particular about the position of the workers.
On 30th December, 1969, Mr. Deignan informed the Department that the co-ops had now paid the full £10,000 for the factory.
On 31st December, 1969, Nestle ceased operations and the factory passed to the co-ops.
On 13th January, 1970, meeting in the Department with Messrs Deignan and Reid. Churning facilities at Lagan will not handle all the cream available after March and until new facilities are provided at Letterkenny they would wish to have cream churned at Leckpatrick in the Six Counties. They are selling skim to McCormac but would prefer to have the whole milk utilised at Letterkenny, namely, in cheese or some such product. They would not wish to have the Dairy Disposal Company involved in any project for cheese or any other product. They indicated that the Nestle staff are on a month's notice and have received redundancy payments.
That is as clear as I can make the situation in Letterkenny running from 1967 right up to the present time. When the Deputy has had time to digest what I have put on the record here he will, I think, change his mind, at least somewhat, around to a recognition that anything that could have been done by my Department was done and indeed the record will show a great deal more than might be expected to be done was attempted to be done, and if we have not succeeded it is not our fault. Perhaps the Deputy would turn his gaze in some other direction to try and get some fire into the people who could make this thing go. I would be delighted if he would.
I thank the Minister for his reply because he has confirmed the rumour which has been circulating in the area and to which I subscribe, that is, that Mr. Deignan and Mr. Reid have done more to try to solve this problem than the Minister has done. The Minister has repeatedly brought those two men's names into it and confirmed beyond doubt in the minds of the 30 people who have been laid off, including the 14 people who have been there for the last 16 years, and indeed the milk producers, that the Minister has been going slow on this until he has reached a dead stop. No amount of talk, even if the Minister read for the next ten pages of his brief speech, would convince the producers, the workers and anybody else associated with them——
Would the Minister read the reply again?
From the word "go" the Minister has made a hames of the whole matter.
The Deputy should go home, and when this has been recorded I hope in some newspapers, local if not national, and the people down there have read it, he should consult——
The Minister was sending out Christmas cards——
The Deputy should consult with the workers in Letterkenny as to whether or not I did my job. He will find that I have been doing my job and will continue to do it.
He was sending out Christmas cards at 3s 4d each.
We know the type of guttersnipe tactics of which the Deputy is capable.
Some of his best supporters were receiving Christmas cards from him costing 3s 4d each.
I have been continuously interrupted by the Deputy but I intend to have my say.
I will expose the Minister for what he is.
Would the Deputy allow the Minister to reply?
He has been replying for the last 20 minutes trying to get himself out of a corner. Thirty people are out of work.
Would Deputy Harte allow the Minister to make his reply.
It is 18 months too late.
Even at this stage would the Deputy allow the Minister to answer?
The question is 18 months too late.
The Deputy only came in on this——
I do not want to——
If the Deputy wants to hear the reply he should let the Minister speak.
The only time I had confidence in him, he let me down.
We should like to hear the replies to the other questions.
The Deputy knows I dragged him in by the backside of his trousers and he has never forgotten it. What I want the Deputy to know is that I have done everything possible to secure the interests of the producers and the workers in so far as it was possible for me to do.
Thirty people are out of work and the Minister cannot get away from that fact.
When the record is read and if the Deputy is capable of understanding it, then he will find that my Department did go in and do the job.
Lock the door when the horse has bolted.
Not at all, the horse has not bolted.
What proposals has the Minister for 1970?
The Deputy knows that some of his friends who should and could secure the 1970 situation are not playing the game.
Tell me who they are?
The Chair would impress on the House that there are many Deputies waiting for answers to questions. If the Deputy would cease interrupting and allow the Minister to finish we might make some progress with the remaining questions.
I am sorry for interrupting but people have been laid off work due to the indifference of the Minister for Agriculture. I would be failing in my duty if I did not expose the Minister for what he is.
The Deputy seems to have made his point. Questions should proceed.
I have asked the Minister what proposals he has for 1970. He has not told me.
The job was to stir up trouble and, having failed to do so, and the record being there to prove that, the Deputy is trying something else. It will not work.
The Minister has to defend his own failure here.
Over my term in public life I have found that so long as one is honest one can never be caught out. That is something the Deputy should learn.
The Minister is a fair judge of honesty.
May I request that Question Time does not descend to what we had before the Christmas Recess? We all have questions to be answered and, while this is very interesting, it could be discussed elsewhere.
I do not intend to be blackguarded in this House by anyone.
(Interruptions.)
The Chair is insisting that Questions will proceed without further interruptions.
I have attended to the 30 workers to the best of my ability. The redundancy pay they have received is better than anything available under our State services or under the State services on the other side of the Border. It is still my hope — and I am in a position to insist — that these workers who became unemployed will in fact be employed again in whatever operation commences in Letterkenny.
(Interruptions.)
What proposal has the Minister for the re-employment of the workers in Letterkenny?
Would the Minister take Question No. 38?
I have put a question to the Minister relating to my question.
The Chair has called Question No. 38.
The Minister has not given me an answer.
The Chair has called Questions No. 38 and we are not going to have further discussion on Question No. 37. The Chair has called on the Deputy to resume his seat.
(Interruptions.)