Dáil Éireann díospóireacht -
Thursday, 14 Nov 1985

Vol. 361 No. 10

Adjournment Debate. - Dundalk Engineering Works.

Mr. McGahon

I propose to give my constituency colleague, Deputy Kirk, some of my time to discuss a matter which is of mutual concern to us. I should like to thank the Chair for giving us the opportunity of raising the issue of another Dundalk company that has hit the deck. As a representative from a neighbouring county, the Chair can appreciate the trauma people in industries in Dundalk are going through. Yesterday's unhappy news that the Dundalk Engineering Works had foundered was a continuation of the tragic story of Dundalk industry. That story started in the late sixties with the emergence of the Ulster troubles, has continued unabated through the seventies and is gathering momentum in the eighties. I have often said here, and outside, that Dundalk has paid the full price for the tragic troubles in Ulster and compensatory measures have not been introduced by any Government, my own included.

Dundalk, with a population of 27,000 people, is the biggest town in Ireland and for many years it led the field in the area of industrial development. Now we are faced with extinction. It is a sad fact that there are more people employed in the public service in the town than there are in manufacturing industry. The Government should give some recognition quickly to the fact that Dundalk is a disaster area, a town that is crucified because of the lack of employment. In 1978 Thomas McArdle's engineering firm were employing up to 400 people but that concern has now disappeared into the folklore of Dundalk. It was not replaced. Their modern plant, standing on 20 acres, is evidence of the economic decay that surrounds Dundalk. Early this year Clarks (Ireland) Limited, a firm that was for 40 years the home of the Irish footwear industry, pulled out of Ireland. In 1980 that firm employed up to 800 people. Now the pride of Dundalk, the footwear industry, employs only 110 people.

Two months ago the oldest industry in Dundalk, Williamsons, foundered. That firm was a symbol of prosperity and Dundalk's economic well-being for 150 years. Now we have the news that a receiver has been placed in S & S. That firm, a subsidiary of the FRAM company of Brooklyn, gave gainful employment to 320 people. It made tremendous profits for the parent company but, due to the collapse of the company in Brooklyn, the future looks bleak for the 320 workers. That sizeable proportion of the Dundalk workforce do not know where they stand because they all received some type of notice yesterday.

I should like to acknowledge the help the Government, and their predecessors. Fianna Fáil, gave this company. I understand that £1.8 million was given over a period of years. I do not believe that management, or the workers, have any quibble about that. They all acknowledge that great help was given. I understand that Fóir Teoranta had a representative on the board and were fully conscious of the difficulties facing the parent company. As recently as last week that representative went to America. I accept that the difficulties for the parent company precluded the Government from making any significant impact on the deliberations that are taking place. I understand that there were banking difficulties in America.

I should like to plead with the Government to give every possible assistance to any bid that may emanate from the management of the Dundalk company. Without meaning any disrespect to my colleague, the Minister of State, Deputy Collins, I must confess that I was a little disappointed that the Minister, Deputy Bruton, was not present for the debate. The position in Dundalk is so grave as to require assistance from the Government. The town cannot take much more. The Dundalk region is withering away and requires a special package of assistance. The same assistance should be given to that devastated region, an unglamorous part of Ireland due to the Ulster troubles, as has been given to Cork, a more glamorous region with greater political clout, being the home of a former Taoiseach, the present deputy leader of my party, and other Deputies who, obviously, have more clout than I. Dundalk should get that attention and I ask the Government to build in compensatory measures and bolster economic activity in the town by creating a special task force for the area.

I should like to point out to the Minister that Dundalk, and County Louth, have an undeniable claim to being declared disadvantaged areas. Why is it that we have to wait until 1985 for that recognition? At the turn of the century Dundalk led the country in economic activity with textile and footwear industries but those industries proved vulnerable to new technology and other pressures. However, replacement industries were not sought for the region

The IDA who, I acknowledge, have a very difficult job, have not been successful until this year in attracting industry to Dundalk. It is an open secret that if Dundalk was included on the itinerary of visiting industrialists it was put at the end and the more glamorous regions such as Cork, Galway, Waterford and Limerick were visited by these industrialists and in some cases they did not come to Dundalk at all.

I am asking that Dundalk should be upgraded within the IDA system and I want more help for that region. A special task force must be set up. We must be designated a disadvantaged region. The neighbouring counties of Monaghan and Cavan have this designation. They are rural counties. In recent years they have been very successfully geared to the cooperative movement, with the result that their unemployment figure has decreased considerably. The percentage of the work force unemployed in Monaghan and Cavan is as low as 13 per cent while in my county it is as high as 24 per cent. Surely those figures cannot be ignored much longer by any Irish Government?

I want to emphasise most strongly and pungently that my area is the neglected area of the country. The pendulum of deprivation has swung from the west to the north east and because of the Border and the Ulster troubles we are withering almost to extinction. Successive Governments have failed to recognise what has been happening and, 17 years after the start of the Ulster troubles, it may now be too late. Immediate help is needed if we are to survive.

Mr. Kirk

I thank Deputy McGahon for sharing his time with me. I endorse his sentiments in relation to Dundalk. The fact that this is the second time that this region has figured on the Adjournment within the past nine months in regard to serious unemployment and industrial problems is an indication of the gravity of the situation in Dundalk. The town has been devastated by cross-Border trade, redundancies, liquidations, perhaps bankruptcies. It has been devastated by the leakage of funds across the Border which if expended at home would help to maintain jobs locally. Closures, rationalisation programmes and reduced work forces have been the story of Dundalk in the past couple of years. The firm ECCO had 1,800 employees and this peak work force has been considerably reduced to the level of 300 to 400. We had the closures of Clarks and the rationalisation programme in Carrolls, one of the soundest and best employers in the country, whose work force has also been considerably trimmed. We had problems with CRV who in their own way gave useful and valuable employment. This is in addition to the closing of Tommy McArdle's firm a couple of years ago with the loss of more than 400 jobs. That is the nature of the industrial history in the town over the past two to three years.

I take this opportunity to appeal to the Minister for Industry, Trade, Commerce and Tourism to contact the IDA immediately, set up a special unit to examine the present problems. Only last week I put down a Parliamentary Question in this House about the number of industrial itineraries that included Dundalk. I understand that approximately 54 visited the town in three years. The result of those visits was a mere couple of dozen jobs set up in the town. It was unfortunate that I had not an opportunity to ask, by way of supplementary question, why there was not a greater result from these visits. That is a sizeable number to pass through and, judging by the meagre return, there must be some basic problem. The time has come to examine the possibility of setting up a Border counties authority to tackle seriously the problems in towns like Dundalk. We have had the example of SFADCo which worked wonders for the mid-west. A similar type of arrangement will have to be made to help towns like Dundalk, Ardee and Drogheda which have been devastated by unemployment.

I have already described Dundalk in this House as an economic wasteland, but an economic and industrial desert might be a more accurate description. The latest closure of S & S means approximately 300 jobs gone by the board. Approximately 143 workers were laid off about six weeks ago but they were hopeful of being taken back some time into the work force. Unfortunately, that was not to be. The difficulties in the parent company in Brooklyn, where the Fram family, I understand, had a majority of shares, eventually brought down the Dundalk enterprise. This was an industry that gave very valuable employment with their product being exported to the United States. In the earlier years the industry had the ability to withstand the difficulties caused by the recession, and that ability may have stemmed from the involvement of Fóir Teoranta. It is unfortunate that we have to appeal tonight to the Minister to grapple with the problem in Dundalk.

I checked our unemployment figures today and in Dundalk it is heading for 4,000. The size of the town and its catchment area, the educational facilities there, the growth of population and the number of young people call for dramatic and urgent action to stem the tide which has engulfed the town. I appeal to the Minister to consider the possibility of setting up a special Border counties authority with special grant-aid available to encourage industrial development in towns like Dundalk.

An Ceann Comhairle

The Minister of State to reply.

Minister of State at the Department of Industry, Trade, Commerce and Tourism (Mr. E. Collins)

I am glad to have the opportunity to respond to Deputy McGahon and Deputy Kirk on this very serious matter. The appointment of a receiver to any manufacturing company is always a cause of disappointment and concern. I can quite readily understand the frustration of the Deputies in this matter. The disappointment and concern are particularly acute when, as in this instance the company are a long established operation providing substantial highly skilled employment in the manufacture of specialist heavy engineering products for the export market.

Up to the early eighties the performance of the Dundalk Engineering Works, which have been inextricably linked with their parent company in the United States was a notable success. However, in the early eighties the group began to suffer a dramatic reversal in their fortunes. While the recession obviously played a major part in this, the situation was aggravated by delays in carrying through the necessary reorganisation and streamlining of the group's activities. This reorganisation, when implemented, resulted in substantial redundancies and a considerable scaling down of operations at the group's headquarters in Brooklyn.

On the Irish front, substantial loan assistance was provided through Fóir Teoranta while the other State agencies, the IDA and CTT also worked very closely with Irish management to provide every assistance possible. However, serious problems, completely beyond the control of the Irish management or, for that matter, State agencies, continued to affect the group. One possible solution would have been if a take-over of the group as a whole could have been achieved. Talks in the United States towards this end and in relation to which Fóir Teroanta had responded in very positive terms, in so far as their involvement with Dundalk Engineering Works Limited was concerned, were initiated. Up to very recently it has been our hope that these would be brought to a successful conclusion. Regrettably, however, these hopes were not fulfilled. On 11 October 1985 the United States parent company, S & S Corrugated Paper Machinery Co. Ltd. filed in the United States for protection under chapter 11. As a consequence, this development critically exacerbated the situation of the Dundalk Engineering Works and resulted in the directors of that company requesting Fóir Teoranta to appoint a receiver to the company.

The receiver's most immediate task will be to assess the situation at the company with a view to ascertaining what precisely can be done to bring about an early resumption of activity. In this regard I understand that at the time of appointment of the receiver there were certain orders on hands from the parent company. I would expect that, as an initial step, the receiver would have discussions with S & S Corrugated Paper Machinery Company Limited and the eventual customers to ascertain if an arrangement could be arrived at which would permit completion of those orders. More importantly, however, the receiver's task will be to explore every possibility of achieving a takeover of acquisition of the Dundalk operation which would lead to a long term resumption of activity and re-employment of the workforce. I should like to assure the House, and the Deputies present, that, in this task, he will receive the fullest possible support and co-operation of the relevant State agencies.

The Dundalk Engineering Works Limited experience is an unfortunate example of a potentially viable Irish operation being pulled down by group problems completely outside its control and is further evidence, if such were needed, in support of the indication in the White Paper on Industrial Policy that in future IDA efforts will be concentrated, inter alia, on the securing of stand-alone projects which can survive without significant reliance on the parent company.

On a more general note I should stress that I am very conscious of the employment situation in the Dundalk area and of the various blows which industrial development in that area has suffered in recent years. However, I should like to assure the House that every effort is being made by State agencies to try to secure new projects for the area. I might draw attention to the announcement by the Minister for Industry, Trade, Commerce and Tourism in April last of the completion of negotiations with four companies in respect of new or expanded programmes which are projected to provide an additional 350 jobs in the area by 1988. These companies were mentioned by the Minister, Deputy Bruton, in his announcement. They are Key Tronic Corporation of Washington State, which is expected to give employment to approximately 150 people within the first two years; then there is Riverside Manufacturing Company, a United States clothing company, which is expected to give employment to 100 people within the first two years; C-Step Limited, which is being set up by two former executives of the Clarks company. It is expected that this new company will employ 60 people within the first two years of operation. Finally, there is Accuray Ltd., a United States electronics company which has been operating in Dundalk since 1981, which is expanding its plant and expects to create 45 new jobs within the first two years of operation.

In this debate I know that the closure of Dundalk Engineering Works Limited is a most unfortunate event. I can only hope that the efforts of the State agencies will be successful in reviving employment in the plant. I wish to assure the Deputies in the House that we recognise the very difficult employment situation which has arisen in the Dundalk area in recent years and that the IDA, in particular, are making every effort to bring new industries to the area. In conclusion I should re-emphasise that everything possible will be done to assist the receiver in his task of bringing about an early resumption of activity at Dundalk Engineering Works Limited which I hope will lead to continued long term employment opportunities for their present workforce.

Both Deputies raised the question of the possibility of a special task force being established, or a special Border counties agency. I shall bring these suggestions to the notice of the IDA and indeed raise the matter within my Department. In the context of our membership of the EC I should say it is quite a complex area. I will undertake to contact the Deputies when I have made the necessary inquiries, which I hope to do in the near future.

The Dáil adjourned at 5.30 p.m. until 2.30 p.m. on Tuesday, 19 November 1985.