asked the Minister for Enterprise and Employment whether his Department had any early warning of the redundancies at Packard Electric, the action, if any, which was taken to protect these jobs and the plans, if any, he has to provide for a replacement industry in the Tallaght area of Dublin in the wake of yesterday's redundancies.
Private Notice Questions. - Tallaght (Dublin) Plant Threatened Redundancies.
asked the Minister for Enterprise and Employment if, in view of the announcement by Packard Electric, the major employer in the Tallaght region, that it is planning to shed 190 jobs he intends to intervene with the company or take any other steps to try to save the jobs in view of the potentially disastrous impact of such job losses for Tallaght and the surrounding area and if he will make a statement on the matter.
I propose to take the two questions together since they are on the same topic. Let me say at the outset that I fully share the concerns expressed at the proposed loss of 190 jobs at Packard Electric (Ireland) Limited from their plant in Tallaght and that I am keeping in close touch with the situation. Packard Electric (Ireland) Limited are a subsidiary of General Motors. It has an excellent track record in Ireland and has been manufacturing in Tallaght for the last 18 years. It currently employs over 1,000 people there.
Like many other auto component manufacturing companies, Packard have been affected by the ongoing recession in the automobile industry throughout Europe with predictions that sales and output of cars will be down in 1993 compared with 1992. A range of problems confront Packard today, the main two being the ongoing recession from which recovery is predicted to be slow and competition from low labour cost centres which can maximise profits on the kind of products which are made in Tallaght. In addition to these problems I understand that there are other factors at play which compound the difficulties at the Irish plant. These include demands for price reductions from customers, increasing labour and material costs and continuing difficulties due to currency fluctuation. Obviously, these difficulties must be confronted if the enterprise as a whole is to remain and the company's current plans designed to ensure that they are continuing.
Packard Electric has entered discussions with trade union representatives to agree the viability plan, which will, I understand, be implemented in the coming few months. Unfortunately, it is the case that the plan proposes a reduction in staff numbers by 190 over a four month period. It is proposed that those redundancies will be effected through a voluntary redundancy programme. The House will recognise that, as negotiations on this package are currently taking place, it would not be appropriate for me to comment in detail on particular aspects of the matter.
I am happy at a more general level that Packard Electric has and will continue to have a strong commitment to Ireland and, in particular, to Tallaght. The current plan is aimed at returning the company to a profit-making basis as soon as possible. It has been fully endorsed by the directors of Packard Electric Europe, who will support the Irish plant in every way possible. I am satisfied that what is now proposed by the company involves the best way forward for the company, the best way to secure the existing jobs of the very substantial numbers of employees remaining at Tallaght. I have no doubt that once the general slump in the motor industry is turned around — as no doubt it will be, because this is an industry with definite cyclical trends — the position in Tallaght will improve substantially.
The IDA has had a local presence in Tallaght for the past two and a half years. Working closely with community groups and other State agencies, it has brought a range of new foreign and Irish investment to the area. The IDA will continue to promote the town vigorously until it succeeds in securing a major new project.
Is the Minister saying that his Department did have earlier warning of this matter and did nothing to intervene, or is he saying that he did not know of the position evolving at Packard Electric in Tallaght? Where is the job protection unit, which is part of the Programme for a Partnership Government and is designed to try to head off problems such as this? Would the Minister urgently survey companies around Dublin in particular, which has lost one-third of its industrial base in the past ten years, to determine whether we are facing similar problems elsewhere? Would he arrange to have effective action put in place to find replacement industry in Tallaght, given that some parts of Tallaght have up to 70 per cent unemployment? Has the Minister specific targets and will the IDA report back to him on what has been achieved in targeting that area for replacement industry?
The Deputy asked several questions. First, I received very late notice of the Packard Electric decision — by that, I mean that I received notice in the past couple of days. Secondly, the employment protection unit is in the process of being established. The IDA does have an early warning system but that is essentially for companies in receipt of IDA type grants or assistance. Thirdly, as I indicated in my reply, the IDA has been in Tallaght for the past two and a half years and has a mandate from the previous administration, which I now confirm and repeat, to find a major project for the Tallaght region, having regard to the very high level of unemployment in the area as referred to by the Deputy.
I am bound to ask the Minister once again whether he is in a position to tell the House when the legislation that I understand will be necessary to establish the job protection unit will come before the House. I should also like to ask the Minister whether he understands the growing demoralisation in the Tallaght area? Directly, there are 7,000 people on the live register there, and indirectly there are another 5,000 on the live register in nearby Clondalkin. The company is the major employer in the region. Has the Minister yet had an opportunity to have work done to trace whether or not there might be any comparison between the position at Packard Electric and what happened with Digital in Galway in that in recent years the company has established a plant in England? Does the Minister recognise any prospect of the plant in England and the plant in Tallaght competing for a market share in Britain and, having regard to the devastating example of the position at Digital, could he assure the House from the information available to him that that is not a likely scenario in Tallaght? Finally, in the light of my understanding that the unions and the management are due to meet this afternoon, I ask the Minister whether he would be prepared to meet a delegation from the trade unions concerned who wish to discuss this and other aspects of the problem with him.
I shall reply to the questions as they were put to me. Legislation to give effect to the agency restructuring as recommended in the Culliton report is being formulated, as the Taoiseach said this morning. However, in advance of that legislation I intend to establish on a non-statutory basis the employment protection unit, drawing together the various components that exist at present and, it is to be hoped, tapping into the informal intelligence network that the trade union movement in particular has around the country.
In relation to the second question asked by the Deputy, that of a comparison between the plant in the UK and the plant in Ireland, I regret to say that there is now a 40 per cent negative cost differential in labour costs between Ireland and the UK. That is compounded in the Tallaght case by an absenteeism rate of between 8 per cent and 10 per cent that increases to 13 per cent on Fridays and Mondays. As the nature of the work in question is of a low-skilled, labour-intensive kind, the possible sources of competition from other areas within Europe is fairly high. Finally, as regards the last question raised by the Deputy, as the Deputy is himself a former trade union official he would realise that dragging Ministers into detailed negotiations between employers and workers can on occasions cause confusion rather than find results. I am quite ready to be available if my presence would be of assistance, but having regard to the skills of trade union officials and their ability to arrive at good solutions I would not dare to intervene unless formally requested to do so.
Deputies Barrett, Gregory and Harney rose.
Order. There are several Deputies offering. We have long since passed the time for dealing with questions, as the House will observe. I shall call the Deputies offering, but I insist on brevity.
Has the Minister any intention of bringing before Cabinet a paper to encourage his partners in Government to reverse the disastrous decision contained in the 1992 budget to impose benefit-in-kind tax on commercial travellers which has seriously affected the whole industry and has resulted in the loss of jobs in Tallaght?
I am not sure that this is relevant.
Representations have been received by me and by others. The matter is ongoing in the context of the debate on the budget. The proper place for such a reversal would, of course, be in the Finance Bill, which is yet to be finalised.
Would the Minister agree that he did not give the full picture and that the position is much more serious in that the issue has the possibility of being even more catastrophic than that of the Digital plant? There was a visit to the Packard Electric plant in Tallaght in February by three members of the head board of Packard Electric, including the finance director, and the company has been told that the whole plant in Ireland will go unless it achieves in 1993 cost savings of about £8.5 million, nearly 25 per cent of its turnover. In the light of that and in the light of the fact that all of the competition does not come from low labour cost countries — Packard Electric are not even able to compete, as the Minister knows, with high labour cost countries such as Austria because of work practices in Ireland — will the Minister assist the company by either funding——
I asked for brevity, please.
First, does the Minister agree with that analysis, is that what Packard Electric has been told and does the IDA know of it? Secondly, does the Minister have any plan to help the company to even fund the redundancy package, which will come to £2.5 million, to help it achieve the £8.5 million savings in 1993? Thirdly, is the Minister in a position to say whether or not he was aware of this matter before yesterday, and, if so, whether he had any discussions with the IDA? Finally, would the Minister agree that the high cost of employing labour in Ireland is making it more competitiveness for companies such as Packard International——
The Deputy is showing a flagrant disregard for the views of the Chair.
I am sorry, but these are among the reasons that the company cannot compete——
I am sorry, Deputy. I allow these questions and they are to come before the House——
As you know, Sir, I requested permission to raise this matter on the Adjournment debate this evening. These are the reasons that the company are in difficulty and there is no point in our saying otherwise.
Unless Members co-operate with me in dealing with such questions I shall be slow to entertain them at all in the future.
These are the real reasons that the company is not competing. The high cost of labour in Ireland——
I recognise what the Deputy is saying and I am anxious to facilitate Deputies. I did ask for brevity, however and I should like a response to that.
I understand that Deputy Harney, not having had a question tabled in her own name, is anxious to ensure that her supplementary questions are answered. I thought I had given a very specific reply to the supplementary question in respect of the negative labour costs relative to the UK, which are compounded by the figures for absenteeism for Monday to Friday. The resolution of the problems is in the hands of the Deputy's constituents and their trade union representatives. I do not know what a Cabinet Minister can do. I suspect that the Deputy has more influence than I have in that regard. I have already answered the question in relation to when I heard about the matter. I will certainly talk to the IDA. If we receive a request for assistance we will respond to it but the facts are outlined in my reply to the Private Notice Question, details of which were given to me at approximately 3.44 p.m.
With regard to the Minister's efforts to attract new replacement industries, in view of the huge and increasing unemployment problem in Dublin, will he agree it is a disgrace that there is no area in Dublin designated for the maximum IDA grants for new industries starting up? Will he do something about this, because it is a direct ministerial responsibility?
I accept that Dublin has lost out compared to other parts of the country in relation to the perception that unemployment in Dublin is not as bad as elsewhere in the country. However, in some respects it is worse and in certain isolated areas it is disastrous. No other part of the country is as bad as certain areas in Dublin. I fully accept what the Deputy said and I am currently looking at ways in which I can redress what has been a historical bias against the capital city in respect of employment.
That disposes of questions for today.
Deputy Rabbitte rose.
I am sorry, I am going on to information appertaining to Adjournment debates.