I wish to give one minute of my time to Fine Gael.
Adjournment Debate. - Irish Steel.
I am sure that is satisfactory and agreed.
I wish to share one minute of my time with Deputy Michael Ahern.
Agreed.
The deepening crisis in Irish Steel has cast a shadow of despair over the Cork region and in particular over the town of Cobh. What is at stake here is not just the 560 jobs directly involved in the industry, with an annual wage bill of £12 million, but also the additional 500 jobs in downstream industry. A total of 1,000 jobs are now at risk and it is estimated that the Irish Steel plant is worth approximately £7 million annually to the town of Cobh. It is not necessary to stress that the loss of this industry would be a mortal blow to the economy of Cork. It would turn Cobh into a ghost town and would have catastrophic consequences for the workforce and their families.
For those reasons I appeal to the Minister at this late hour to be more flexible in his approach to the issue. Specifically, I am asking him to extend the deadline. As we speak there is evidence that talks are under way and there is much hope that we may achieve a breakthrough. I appeal to the Minister to extend the 30 June deadline and I warn him that there is a real feeling in the Cork region that the level of Government attention, urgency and flexibility accorded to the issue of TEAM Aer Lingus has not been given to the crisis in Irish Steel. That should not be allowed to happen. The Minister demonstrated a new found flexibility on TEAM Aer Lingus last night by asking the chairman of the Labour Relations Commission to invite both sides for talks. I appeal to the Minister to show the same degree of openness and flexibility in the case of Irish Steel.
I fully accept that steel manufacturing here as in Europe, faces difficulties but the grim reality of what the closure of Irish Steel would mean to those concerned leaves us no alternative but to ensure that no stone is left unturned in trying to reach agreement. There must be openness and commitment and mindful of the tragic consequences of closure I earnestly appeal to the Minister for renewed flexibility on time. I appeal to him to agree to meet with and listen to the unions. As he is willing to open up new dialogue for both sides in TEAM I ask him to do likewise in an effort to resolve the crisis in Irish Steel and defer today's closure deadline to ensure the retention of the industry in Haulbowline.
I thank the Deputy for affording me an opportunity to speak in this debate. There is no time to lose as far as Irish Steel is concerned. I recognise the difficulties faced by the Minister and although progress has been slow to date it is better than no progress. Any hope offered over the past 24 hours must be matched by a degree of flexibility on the part of the Minister. I concur with Deputy Quill's appeal to allow an extension of the deadline and use every opportunity to open new avenues to fresh talks and I hope a new beginning for Irish Steel.
I, too, thank Deputy Quill. Will the Minister be more flexible about the deadline as today is D-Day and could be disaster day? Will he explore every possible avenue? Could the Joint Oireachtas Committee on Commercial State-sponsored Bodies hold an emergency meeting to hear both the management and unions in the company? If Irish Steel closes, it will be a disaster for the region. Every family, including my own, will be affected. I ask the Minister to make efforts to stave off a regional disaster.
I spoke to a number of Irish Steel employees today and they are extremely worried. They want the Minister to clarify what he stated yesterday that if there is a breakthrough in the talks between unions and management or light at the end of the tunnel, extra time will be given to them to reach a conclusion. Will the Minister confirm that for the benefit of those in Irish Steel and their families?
In the House yesterday we discussed Irish Steel and I set out why it is vital that agreement be reached between management and unions on net cost savings of £8.4 million per annum. This is a basic minimum and there is no room for compromise on it. These are the management and unions figures.
There are a few inescapable facts about Irish Steel. It is losing money on every tonne of steel it produces and sells. There are two ways to address that problem, it either increases its selling price or it reduces its input costs. As Irish Steel is such a small producer it has no control over its selling price. That leaves only one avenue open to it; it must reduce its input costs and that is what the cost savings plan is about.
Cost reductions was the solution recommended by the consultants I engaged at the request of the unions to look at the company and it is the solution put forward by management in its viability plan. I am not, for one moment, saying that is an easy solution, but it is the only solution. We cannot get away from that no matter how long we spend discussing the problem. Extra time will not change the facts. Previous Ministers who dealt with Irish Steel faced difficulties just as I do now. Unfortunately, they did not solve the problem.
I said from the beginning that the deadline of 30 June set by the Government last April for the conclusion of negotiations on the survival of the company is not an arbitrary one which can be indefinitely extended. With the company losing over £1 million a month it would be downright foolhardy to extend it unless there is a good prospect that an extension of time would lead to a successful conclusion of negotiations. I also made clear that, while it would be better if agreement could be reached by today, I would be reasonable and respond positively if a little more time would produce the required results. That was my position yesterday and it remains my position today.
Losses are running at over £12 million a year. What does £12 million mean in job creation terms? For that investment, given the present level of IDA activity, the industrial agencies both IDA Ireland and Forbairt could expect a project to create at least 600 high quality jobs. This illustrates why we cannot bear losses continually.
As I understand it, negotiations are still in progress between management and unions as we speak. This is welcome to the extent that if people are at the table negotiating there is still the prospect of reaching agreement. However, deadlines are not set just to concentrate minds, they must mean something. Postponing the deadline will not change the figure of £8.4 million savings that must be achieved. However, it will change the figures in the tab the taxpayer will have to pick up if Irish Steel closes because each day Irish Steel stays in business as a loss making operation the greater the losses it runs up. Given this stark fact, the taxpayer will not thank me for extending the deadline unless there is a good prospect of keeping Irish Steel open and saving 400 jobs there.
Right now I am not in a position to make that judgement because, even as I speak, discussions are still going on between management and unions and the board of the company is still discussing the problem. I will review the position when I get a report from the board. I am not prepared to make any specific promises until I have the report and have had an opportunity to examine its contents. I am sure Deputies agree that the seriousness of the situation demands no less. However, I will give careful consideration to the points made by the Cork Deputies this evening. I share their concern and understand the effect the closure would have on the vicinity of Cork and the lower harbour. The solution is in the hands of the people and the workforce in Cork. The viability plan was drawn up by a number of consultants and worked through with management. It is on the table and I salute the fact that the people concerned are talking in a constructive manner. The solution does not lie in Dublin. It lies in Cork with the people directly and indirectly affected by it.
The Dáil adjourned at 5.20 p.m. until 10.30 a.m. on Friday, 1 July 1994.