I have had questions submitted to me from Deputies Bernard Allen, Pat Rabbitte, Joe Sherlock and Dick Spring appertaining to the need to safeguard jobs at Cork and Tralee in Sunbeam. I will call Deputies in the order in which they submitted their questions to me. I call first Deputy Bernard Allen to put his question.
Private Notice Questions. - Textile Industry Jobs Threat.
Bernard Allen
Ceist:Mr. Allen asked the Minister for Industry and Commerce the urgent steps he is taking to safeguard the 450 jobs in Cork and the 200 jobs in Tralee as a result of Sunbeam plc and Kerry Fashions going into receivership.
Pat Rabbitte
Ceist:Mr. Rabbitte and Mr. Sherlock asked the Minister for Industry and Commerce if, in light of the appointment last night of a receiver to the Sunbeam Group of companies and the consequent threat to the jobs of almost 1,000 workers in plants in Dublin, Cork and Kerry, the steps, if any, he intends to take to prevent the loss of these jobs; if he intends to seek a meeting with the receiver, if he intends to request the IDA to intervene, and if he will make a statement on the matter.
Dick Spring
Ceist:Mr. Spring asked the Minister for Industry and Commerce if he will make a statement on the appointment of a receiver to Sunbeam in Cork and Kerry Fashions in Tralee; and, in particular, the action he is taking to prevent the imminent threat to 600 jobs in areas already badly hit by unemployment.
I propose to take all the questions together.
I share the concern of the Deputies about the appointment of a receiver to Sunbeam plc and Kerry Fashions and about the possible threat to jobs in these companies.
There are about 1,000 jobs in the various companies concerned. There are reasonable grounds for hoping that the majority of these jobs can be saved. The companies based in Dublin and Bandon have performed profitably and it should be possible to secure their future.
The Sunbeam plant has had mixed fortunes. Some of it at least has been profitable and efforts must now be concentrated on saving as much as possible of it. I am particularly conscious of the jobs in question in Cork.
The Kerry Fashions plant in Tralee has established markets in Europe and the US and is certainly potentially viable.
I have asked the State agencies concerned to meet with the receiver as soon as possible and to work with him in making every effort to safeguard the jobs in these companies. I understand that the two agencies concerned have already met with the receiver today.
Does the Minister agree that the loss of 450 jobs on the north side of Cork city, an area already devastated by high unemployment, would be a mortal blow to the area, and will the Minister give assurances now that all jobs will be maintained, pending discussions between the receiver and the IDA?
I am well aware of the difficulties on the north side of Cork city which have been ongoing for some time and I agree that if these jobs were to go it would be an extremely serious matter. I cannot give a unilateral assurance but certainly everything possible will be done. It is my belief and hope that the majority of those jobs can be safeguarded in the longer term.
Does the Minister agree in view of the fact that many aspects of the Cork and Kerry companies are profitable and that the IDA suggested that they will try to find profitable markets for the knitwear section of the industry in Cork, that his Department should combine with the IDA to help to save the jobs in Cork and Tralee?
My information is that the knitwear sections have not been profitable. Notwithstanding that, it may be possible, in conjunction with the various interests concerned and as a result of the discussions now taking place between the agencies and the receiver, to devise a means of selling these factories as a going concern. The Bandon and Dublin factories are profitable and the IDA advise me that there are good prospects they can successfully be sold as going concerns.
Given my understanding that the main financial difficulties with the parent company were in relation to the UK plant and not the Irish plants, will the Minister take steps to ensure that the plants in Dublin, Cork, Tralee and Bandon will be allowed to continue trading? If they cease to trade there will be further serious difficulties. Given that there are two State agencies involved, the IDA and SFADCo, will the Minister outline what steps he has taken to coordinate the activities of both of those agencies?
A receiver has been appointed, as I understand it, only in respect of two of the companies, Sunbeam and Kerry Fashions, and a receiver has not been appointed in respect of the other two. Obviously the IDA and SFADCo are already in touch with each other with regard to the matter, as clearly they should approach the problem jointly. Their combined resources will be of considerable assistance in trying to resolve the difficulties.
With regard to the Sunbeam plant at Cork, would the Minister agree that an essential element of any rescue package must include the maintenance of production at this plant? Is the Minister having this aspect examined and can he give an assurance that production will be maintained pending the putting in place of any rescue package?
It is my earnest desire that production will be maintained. The receiver who has gone into the Cork and the Tralee plants this morning has decided to continue production there for the moment and I hope he will continue to do that because it makes the possible sale of the undertakings as going concerns much easier if they are in production rather than if they are closed down.
Can the Minister tell the House to what extent the exchange rate and the interest rates have contributed to this problem?
I would imagine that so far as some of the companies are concerned, the exchange rate in recent times has not been terribly helpful but the Deputy should bear in mind that this problem essentially arises from the difficulties of the holding company of the group in Britain on the financial side, more than on the trading side. This group was the subject of a buy-out which was highly leveraged in the past 18 months or so, which was financed by extremely heavy borrowings from banks in Britain. The holding company found themselves unable to meet the commitments they had agreed with the banks in Britain and, as a result, the banks put in a receiver to the holding company. The trading record of the subsidiaries in Ireland has not been at all bad and most of the divisions of the various subsidiaries here have been able to trade profitably.