asked the Minister for Enterprise and Employment if he will intervene even at this late stage to ensure that the Silverlea factories in Athlone and Athy are not closed and if he will use some of the £22 million announced yesterday to secure these jobs.
Private Notice Question. - Proposed Closure of Athlone and Athy Plants.
I thought this matter was to be raised on the Adjourment and, therefore, I have not had an opportunity to do some of the preparatory work I would like to have done.
The proposed phased closure of Silverlea is a great disappointment to me and to all those who have made trojan efforts over the part four weeks to find a suitable purchaser. I very much regret the loss of the 220 jobs in Athlone and Athy. My powers do not stretch as far as the Deputy thinks in that I cannot control the role of the receiver. During my reply to an Adjournment debate on 7 February last I outlined the reasons a receiver had been appointed to Silverlea. I wish to outline details of the efforts which have been made to help secure the future of the Silverlea operation.
Following a series of discussions with interested parties, the receiver agreed to allow the Silverlea operation to continue manufacturing for a further four weeks. The purpose of this extension was to allow the IDA and Forbairt time to find a prospective investor for Silverlea. I and my Department have been actively involved in efforts to save the Silverlea operation which have included regular contacts with the IDA, Forbairt and the receiver. I have been active on a daily basis in monitoring progress and arranging meetings to deal with issues as they arise. The Deputy is aware of this, and I had the opportunity to outline the position in the course of a number of meetings which I had with public representatives.
During the four week extension the IDA and Forbairt have continued to work very closely with the receiver to sell the company as a going concern. However, despite their intensive efforts they have been unable to find a buyer. The many parties who expressed an interest and made detailed inquiries did not follow them further. These efforts will be continued and even after the closure the receiver will be in a position to entertain any buyers who may come forward within the next two weeks. At this stage I have to be very blunt — if nobody wants to buy the plant as a going concern there is nothing I or anyone else can do.
I am aware that the possibility of an employee buy-out is under consideration. The feasibility study which has been completed and which identified the key issues to be addressed is the beginning of the process. This is to be followed by the preparation of a detailed proposal and plan of action covering such issues as finance, management structures, nature of employee involvement etc. Both FÁS and Forbairt will continue to provide every assistance possible to the employee buy-out team but in the final analysis the terms of the proposal are a matter for agreement and decision by the employees.
The receiver has been asked to give a further extension to enable the employee buy-out proposal to be progressed. I have spoken to the receiver on the matter but given the circumstances I have just outlined and his statutory obligations he was not disposed to keeping the plant in production for a further period. Again I have to be blunt; if the receiver takes this decision there is nothing I or anybody else can do. However, I would stress that the closure of the plants will not prevent the workers from continuing to pursue the employee buy-out proposal. For an employee buy-out proposal to succeed, they would have to make a fresh start and could not take over the existing company as a going concern.
The receiver has also pointed out that the assets will be in situ for some time and a closure now does not rule out the possibility of an employee buy-out going ahead if it is seen as a viable proposition. I am disappointed at the fate facing the employees in Athlone and Athy and no stone will be left unturned in finding replacement industries for the two towns.
It is not true to say that nobody is interested in the firm. A feasible employee purchase proposal has been put forward. The workers have been very committed and courageous in putting their money where their mouths are by putting forward this proposal. It is not correct to say that this proposal will have as good a chance to find its mark if the firm closes. It would have a much better chance of being implemented if the firm remained open. It is mere common sense that a firm in production has a better chance of remaining in production and, more importantly, of keeping its valued customers than one which is closed. Silverlea has some very valued and well known customers, such as Dunnes Stores and Next. Dunnes Stores have been very supportive of Silverlea and its workers and I wish to express my appreciation to them.
Soft words will not help. Last night in a very incongruous and insensitive manner the Minister announced the allocation of £22 million to help industries, such as textiles, facing interim difficulties. I cited earlier the impassioned request I received from a worker in Sunbeam who wanted to know if she could have a little of that £22 million to keep her job. Can Silverlea in Athlone and Athy, with its 220 workers, get a slice of the £22 million being provided for rainbow jobs to keep real jobs in place? The Athlone firm is an excellent one with no adversarial tactics between management and workers and its order books are full, but it has interim cash difficulties. The Minister and the Minister of State, Deputy Rabbitte, worked day and night to save the jobs in Packard. Many public representatives have worked day and night to save the jobs in Athlone and Athy, and we want real backing, not soft words. We want ministerial intervention and a cash injection to save the jobs in question. The Minister of State, Deputy Mitchell, announced hundreds of jobs for the future but the jobs in Silverlea are tangible. I appeal to the Minister to save those 220 jobs. We can do it.
The Deputy must be aware of the position. The viability plan emanating from the employee buy-out proposal has not reached a stage where Forbairt would be in a position to provide a full package of support for the firm, but if that option develops to a viable stage, it could be supported.
The markets will have gone by then.
I have already indicated that Forbairt stands ready to support the option if necessary. As a going concern the company carries debts of enormous proportions, which the receiver is legally responsible to collect. It is up to the receiver, not the Minister, to decide what to do about the execution of the receivership. It is not open to me to provide money to keep in operation a loss-making company which is in receivership. That is not within my remit. I do not, on behalf of the taxpayer, put money into receiverships to keep companies operational. My job is to create an environment in which companies can flourish, but that does not mean I can support companies with huge losses or that have gone into receivership. However, I stand ready to support an employee buy-out if the proposal is viable.
While the firm has many orders on its books, the Deputy will be aware that part of the financial difficulty resulted from a loss of orders. The sudden deterioration in Silverlea's fortunes in the middle of last year was due to a loss of business and substantial associated financial losses. The Deputy is painting a misleading picture of the position.
Tell that to the workers.
The company has suffered severe losses and incurred serious debts and it is in receivership. The Deputy should recognise the limitations on a Minister, but she is unwilling to do so. I cannot support every company that gets into difficulties. I can provide support for a viable plan to create an alternative. We sought purchasers to provide that viability for Silverlea. The agencies under my control went to enormous lengths to find a purchaser for the company but were not successful. I cannot make water run up a hill.
The buy-out proposal has been put forward by a well known firm, Farrell Grant Sparks which has connections with one of the parties in Government. It has produced an authorative and well based plan, not one merely written off the top of somebody's head. Two to three weeks are required to ascertain if it can be implemented. I fail to understand how the closure of the firm will allow the plan to be assessed and put into action. There are many firms in the jeans market already waiting in the wings — who can blame them? — with offers to supply jeans to the reputable firms who have been consistent buyers of Silverlea jeans in Athlone and Athy.
Is it any wonder I am outspoken on this matter when one considers that I come from a town which has managed to weather most of the economic difficulties which have beset other industries and other towns? I feel very affronted that this fine firm is being let go. That is what will happen if more time is not given to the workers, who are proposing to put in their money to keep the firm operational. I am not satisfied that every avenue has been teased out and every ounce of effort made by the Minister in an emphatic manner to keep the firm operational.
I will make a final appeal to the Minister, and not one from a wild impassioned stance. As a representative from Athlone, I do not want 170 jobs lost when at the same time I read about £22 million being given to prop up firms and enable them cope with transitional difficulties.
The £22 million is not being used to prop up any company.
That is what was reported in the papers.
None of that money will be assigned to companies in receivership. It will be made available for preventive measures to foresee difficulties that companies may face in the future and provided only when a company presents a sensible proposal for the repositioning of the design and marketing of its product to shore up the company against competitive challenge.
I share the Deputy's disappointment in this regard because I have taken a keen interest in the matter. I spoke to the receiver about a extension of time, but he is not willing to make that time available and that is not something I can alter.
I am quite happy to provide any possible support to the employee buy-out and the receiver has indicated that the plant will be available for some time. Also, part of the employee buy-out is considering whether this is the most appropriate location or if alternative locations would be better. We will work with the employee buy-out and if sensible and viable proposals emerge the State agencies will not be found wanting. The Deputy cannot ask me to do things which she knows in her heart of hearts are not open to me, to put money into companies in receivership to keep them limping along.
I thank the Minister, Deputy Bruton, for his interest in this company since it got into difficulty. He has always been accessible in regard to the difficulties that arose on a daily basis.
Has the Minister had access to the feasibility study and, if so, what is his assessment of it? Is there a real possibility that this company could survive? Has Forbairt had a chance to review the feasibility study and is it happy that this company would be viable with a scaled down workforce of 130? Is it necessary that the company should close first, for legal reasons, before a workers' buy-out can be arranged?
It is too early to say whether the feasibility study will ultimately materialise into a viable proposal. However, the support of both FÁS and Forbairt will be available to assist in transforming the early structure into a solid proposal. The Deputy asked if taking over the company as a going concern was an option. The reality is that the company is in receivership and has substantial debts which the receiver is under a legal obligation to deliver upon to the creditors. That means that anybody taking the company on as a going concern would, in the first instance, have to provide finance to the receiver of such dimensions as to satisfy the claims of the creditors. That is not something that an employee buy-out would be in a position to do. The best future for the employee buy-out will be in the alternative of using the resources for some time and, perhaps, looking at other suitable locations for an ongoing concern. It would be premature at this stage to identify those. The employee buy-out must first be brought to a stage where they can make a decision on whether it is a visable proposal that would secure their future.
I understand the legal constraints under which a receiver works, but has the receiver examined the feasibility study commissioned by SIPTU and undertaken by Farrell Grant and Sparks? The study was presented to the workers yesterday, I made contact with the receiver and put to him the possibility of trying to secure another two weeks to allow the matter to be explored in full.
He just wants to close it.
It is up to the receiver to say what assessment he has done of the feasibility study. When I spoke to him he was aware of it but, notwithstanding my request, he was not in a position to grant an extension of time. It would be only honest to say that there would be substantial difficulties for an employee buy-out in buying this company as a going concern, encumbered as it would be with substantial debts owed to creditors which the receiver would have an obligation to honour.