Deputy Des mond applied for and received permis sion to raise on the Adjournment the subject matter of the closure of the Carrigaline factory in County Cork which has gone into liquidation.
Adjournment Debate. - Carrigaline Pottery Closure.
I should like to express my gratitude to the Ceann Comhairle for allowing me to raise this matter. It is one of particular importance to me. Unemployment is a very serious matter wherever it occurs. When it occurs in one's own neighbourhood and affects one's neighbours and personal friends we realise more fully the tragedy of unemployment and the impact it makes on the lives of the unemployed and their families.
The Carrigaline pottery was founded in 1928 and since then a tradition has been built up and skills developed. Whole families were involved — fathers, mothers, sons and daughters. In the case of many friends of mine the total income into the household came from the Carrigaline pottery. That company was wound up in 1980 and taken over shortly afterwards by a German owner and became known as Cork Art Pottery Limited. That was the focal point of this expanding town. There was great jubilation when the industry was saved and hopes were high. However, these high hopes were not justified from an early stage. Relations between the owner and staff were never good. There was little consultation with workers. They were never taken into the confidence of the owner or manager of the firm. This practice is all too common. The involvement of the workers and the amount of information given to them was all too little.
The workers were proud of their skill and of their factory. They were only too willing to make whatever sacrifices were required of them from time to time to keep the industry going. As difficulties arose they agreed to forego part of the national wage agreement to help the industry. They worked diligently. The position deteriorated and as it did rumour was rife. From day to day they did not know where they stood.
At the time of the liquidation last week the firm owed £1 million to the Inland Revenue, £235,000 to the banks and about £200,000 to other creditors. The stock on hand at the factory amounted to £200,000. The workers were owed three days' wages. A few workers were issued with cheques which subsequently bounced. Workers were owed holiday pay which averaged about nine days per worker for the 210 workers in the factory. They got no pay in lieu of notice and there is no money available to pay them redundancy. This will be borne by the State.
Liquidation in this case was brought about when the Revenue Commissioners got a court order for a sum of £841,000 due to them in respect of PRSI and other charges which were deducted from the workers' wages but not paid to the Revenue Commissioners. Action by the sheriff to recover this money was imminent. For two and a half years no PRSI was returned in respect of these workers. I am not in a position to say what steps the Revenue Commissioners took during those years to recover the money but I and the employees in the industry are amazed that this time elapsed before any action was taken. The action taken unfortunately resulted in the closure of the factory but the workers were concerned that deductions were made from their wage packets and not returned to the Revenue Commissioners. Such action places a burden on the State to meet the commitments of employers in respect of these payments. Employers such as this one often used the recession and the deductions made from their workers' wages for their own advantage.
When the factory closed approximately £100,000 worth of orders were incomplete. Orders were plentiful. The liquidation provided for the completion and delivery of these orders within a period of three weeks. Tomorrow morning in the High Court an application will be made for money to finish and deliver these orders. Workers in Carrigaline use the factory as a meeting place where they wait for news of their future. This has been termed as a sit-in but they do not obstruct the work of the factory. Nobody would be more pleased than the workers if somebody took over the factory. They cannot easily give up their jobs. They are trained in this skill and it is the only one they know. They will do everything possible to ensure that the factory remains open.
I mentioned the fact that lack of consultation was at the root of the trouble in this factory. The workers were suspicious and their suspicions grew as the fortunes of industry declined. One cause of suspicion which should have been investigated and which I ask the Minister to investigate now was that quite recently a shipment valued at £27,500 of unfinished products was exported from the factory to one of the owners of the other factories in Germany. It was at a discount of 85 per cent netting Carrigaline £4,000. I do not know much about pottery but those who do estimate that about 85 per cent of the work was done in Carrigaline. I cannot prove that, but it is something which could be proved. The Minister knows company law better than I do and if it is proved that 80 per cent of the work was done in Carrigaline and the company received only £4,000 there must have been fraudulent practice. Certainly this matter should be investigated and I ask the Minister to see that this is done.
There seems to have been little or no monitoring of State aid given to Carrigaline and there was no way of finding out what was happening. State aid was given to this industralist who bought the factory for £800,000 two and a half years ago. He was able to get the industry off the ground and employ about two-thirds of the work force. There were about 300 people employed there before the change-over and there were 210 at the time of closure. No accounts were kept within the industry and this obviously made those who depended on it for a livelihood very suspicious. There has been a great deal of suspicion surrounding this whole industry.
I am happy to say that efforts are being made by the IDA, the workers' representatives and all concerned to save this enterprise which is the focal point in my native town. I urge the Minister to give every possible assistance because this is what the workers deserve. I would favour some type of co-operative effort because the necessary skills and equipment are there but I understand the difficulties that would be involved. The main thing is to ensure that the industry is saved for the town of Carrigaline. I feel confident that the Minister will give the matter every consideration and put his weight behind every effort to save those jobs.
The workers in this industry, all of whom I know personally, have a total commitment to it. They have made sacrifices in the past and they have not been treated very fairly in recent times. Their skills are undoubted and they must be given every help. One must look ahead in a matter like this and in case the worst happens and I am very glad that the State will safeguard their benefits, though the employer has not been paying contributions in respect of each person. There are probably people in the same category as this employer who are taking advantage of the recession not to submit to the Revenue Commissioners the deductions they make from employees' wages. The main concern is that there should be no undue hardship. I do not look forward to the time when it will be necessary to draw those benefits because I believe it should not happen. All the advice I can get — perhaps it is prejudiced or one-sided; perhaps it is the advice I am looking for — leads me to believe that with proper management and proper commitment this industry is viable and can be made to work.
I know there are limits to what the Minister can do but nevertheless he has some responsibility and influence. I know his influence will be used to save the 210 jobs in Carrigaline for which I am appealing.
I share Deputy Eileen Desmond's concern in this matter. I know how much the closure of Cork Art Pottery must mean to her as a person not only representing the area but living there. It is a very great blow to Carrigaline, felt very deeply by the Deputy who has raised the matter. She and I feel this all the more by virtue of the fact that it is the second time in two-and-a-half years that the manufacture of pottery at Carrigaline and the employment of the workers has been in serious jeopardy.
Everybody had hoped that the package worked out in 1980 would work successfully for a time at least and this appeared to be the case. However, the early prospect of satisfactory trading never actually materialised and was blighted by difficulties in the market place caused by the contraction in sales due to the recession and the pressure in the German market of low-cost imports from elsewhere.
Some months ago when the IDA became aware for the first time of the reality of the company's financial situation, they initiated efforts to have the company's affairs put on a sound footing, either through existing management or by securing a take-over. As regards a financial reconstruction under existing ownership, substantial loan facilities were sought by the company from Fóir Teoranta. I understand that Fóir Teoranta were not prepared to provide money for the company in its existing circumstances. The Deputy and the House will be aware first of all that Fóir Teoranta are not under my Ministry but under the Minister for Finance and also that in judging loan applications they must abide by strict statutory criteria.
As to the IDA, they did seek in parallel to bring about a take-over of the company by other interests — in this case American — but they appear for the moment at least to have withdrawn. The IDA are continuing in other directions to try to interest suitable purchasers in acquiring the assets of the company on a going concern basis with a view to resumption of production and employment. In the meantime I understand that it is the intention of the liquidator to meet all outstanding orders and a certain number of workers will be re-employed for that purpose.
Reference has been made to the amount which the company owed to the Revenue Commissioners in respect of PAYE, PRSI and VAT. In their tax collection function the Revenue Commissioners have to use their own judgment as to how far and when to press companies for payment. Obviously there has to be a question of balance between maximising returns and not putting the company and its employees in jeopardy. Nevertheless the extent of the indebtedness which built up here in a relatively short time must be a cause of concern to us all and I will bring to the attention of the Minister for Finance the comments made by the Deputy. From my experience here, more as an Opposition Deputy than as a Government Minister, the Revenue Commissioners try to assist a company, within the limits of the discretion available to them, to continue trading and they do not act hastily, prudently realising that they could be cutting their nose to spite their face because if the company were to close there would be no revenue coming in. They are bound by statute and by the rather rigorous interpretation of statute placed by the Committee of Public Accounts. That is a factor that the Revenue Commissioners take into account.
The Deputy referred to the shipment to other factories within the same group. As far as I know — speaking without recourse to the law books — there is nothing illegal in what the Deputy is mentioning but I can see that it is a cause for some concern particularly as we are relying to a great extent on multi-nationals with components in other parts of Europe. We should give some attention to this. If it was to become a pattern it could cause serious problems for our industrial strategy. I am glad the Deputy has raised this matter and I will have it investigated. The Deputy made a general reference to the lack of monitoring, as she saw it, by the IDA of the operation. I am sure the Deputy will have seen from what I said earlier that the IDA took action some months ago when it came to their notice that problems were reemerging in pottery manufacturing in Carrigaline. I concede that there are problems here as far as the organisational structure of the IDA is concerned in regard to keeping in touch with particular industries on a regular basis. Some proposals are being considered for the reorganisation of the IDA which will enable them to keep in close touch on a day-to-day basis with particular sectors or firms rather than having different officials dealing with the same firm for different purposes. The idea might be to have one official dealing all the time for all purposes with a firm or group of firms. That matter is under consideration and it would go some distance to meet the type of situation referred to by the Deputy.
I have noted what the Deputy has said about the efforts to restart the industry and I am sure she is aware that I will do all I can, in conjunction with the IDA, to assist any efforts to start the industry again on a financially viable basis. We will check the position in regard to holiday pay and the other entitlements mentioned by the Deputy. I will communicate with the Deputy about the matter and if I have to get information from the Minister for Labour or Social Welfare for this purpose I will obtain it and convey it to the Deputy. I appreciate how serious a problem this is, particularly for Deputy Desmond. I can assure the Deputy, and the people directly concerned in Carrigaline, that as far as we can we will do everything possible to get the industry started again.
The Dáil adjourned at 8.55 p.m. until 10.30 a.m. on Wednesday, 9 February 1983.