asked the Minister for Enterprise and Employment and the Minister of State if they will give full details to Dáil Éireann of the crisis in Packard Electric.
Private Notice Questions. - Threatened Job Losses at Tallaght (Dublin) Plant.
asked the Minister for Enterprise and Employment, in view of the crisis in Packard Electric and the threat to 800 jobs, the steps, if any, he intends to take to avert the closure of this plant.
This is a very serious situation in regard to industrial relations. No third party can solve the dispute between the two parties, only they can do that. The State's industrial relations machinery can seek to help them, but only if there is a will to make progress. They each met the Labour Relations Commission — separately — this morning and we had hoped that the intervention could have assisted face to face discussions to commence. The two sides were well aware of the grave and imminent danger to the continuance of this plant if there was a breakdown in the process begun today under the auspices of the Labour Relations Commission. Good sense and flexibility was required on all sides.
Regrettably, no basis could be found in today's discussions that would enable negotiations to commence. To enable discussions to take place on the issues in dispute I had asked the unions in particular to rescind or, at any rate, delay the implementation of their threat to withdraw the 41 hour working week agreed last January and the threat of industrial action pending talks. Deputies will recall that it was only as a result of ministerial intervention that the company agreed to a third ballot of the workforce in January which saved the plant from closure. The fourth ballot last week reversing the decision of January is, as the unions are aware, a major obstacle to talks now. That is the reason I continue to appeal for flexibility from them as a matter of urgency. In turn, I continue to appeal to the company to show flexibility on the issues of concern to the workers.
The main issues represented to me and to the company are: the position of the 42 workers laid off last year; the steps to be taken to achieve competitiveness and, as a result of achieving that competitiveness, the scope for a return to full capacity operation following the proposed lay-off of 400 workers. Only the two parties can address these issues. I appeal to them to do so now in an open and co-operative spirit. If they do not I fear for the future of this plant.
I understand that discussions held this morning at the Labour Relations Commission did not lead to the opening of discussions between the two sides. I have no grounds for believing that either side is in a position to alter their stance at present. In these circumstances the Labour Relations Commission has been unable to find a basis for any form of conciliation between the parties. The Labour Relations Commission will remain available to them but in the present situation there are few grounds for hope.
As I am sure the Minister is aware, a document was issued today by the managing director of Packard, Mr. David Schramm, to the employees. This document makes it clear that the arrangement arrived at last December-January envisaged the lay-off of 400 workers. That is stated on page 1. As that document was signed by Mr. Schramm one assumes it is correct. Why were we and the workers, who agreed in good faith to work an extra two hours per week free on the basis that the level of lay offs, to use the Minister's words, would be minimal, misled as a result of political mismanagement?
It is clear from this document — perhaps the Minister will tell me that it is incorrect — that it was envisaged that there would be 400 lay-offs. This is written in black and white. In order to restore trust and confidence and it is necessary to do so — it would be helpful if the Minister and Minister of State clarified the arrangements which were worked out at that time. On their return from their mission they told us that agreement had been reached. Does the Minister accept that it is political mismanagement which has led to deep seated mistrust between workers and management on this serious issue?
At no stage did I or the Minister of State at my Department mislead anyone.
Will the Minister then condemn this statement?
It was made crystal clear at all times to everyone concerned that lay-offs were envisaged and that the loss of the J2900 Vectra contract implied that crucial business which the company needed to secure its future had been lost. When we travelled to Coventry a commitment was secured that the company would make every endeavour to secure as much of that contract as it could, although it had already been lost, and to secure extra business. The purpose of those commitments was to seek to keep the proposed number of lay-offs to a minimum. Everyone knew that there would be some lay-offs. I expressed the view, as reported by Jackie Gallagher, the former industrial correspondent of The Irish Times, that if the company was successful in winning contracts the level of lay-offs in the second half of this year could be minimal and temporary. The point was that the contract had been lost and the task was to try to win it back. I am disappointed at the scale——
Has the Minister seen this document?
——of the lay-offs which have emerged. No figures for prospective lay-offs were included in any agreement. There was agreement to make the best endeavour to secure business on the basis of agreement being reached between the unions and management. That remains the position.
It is disappointing that the company has not been able to win sufficient business to avoid temporary lay-offs. It is now proposed to lay-off 400 workers. These lay-offs will be made against a background where the company has stated that it has made significant progress in reducing its costs, expresses the hope that it can bring back business and that the lay-offs will only be temporary.
Does the Minister not believe what is in this document?
The present impasse has been created by intransigence on both sides in this issue. I repeat my appeal to both sides to enter into meaningful discussions. I have had discussions with the trade unions and the management side. As of now, the trade unions are returning to their members. I had hoped that they would be able to arrange a postponement but under their rules they must return to their members. It is now up to the members to decide whether they can suspend the action to allow discussions to take place. It is also up to the company to enter into negotiations in an open way to deal with the breakdown of trust between the workforce and management. I repeat my appeal to both sides to take the opportunities which exist. The Labour Relations Commission stands ready to assist. I hope that both sides will avail of the opportunity to do so.
The future of Packard is very bleak for a number of reasons. Does the Minister agree that the third ballot in January was successful only because assurances were given by him and the Minister of State? Was he told there could be up to 400 redundancies or is the management now telling a lie? Is management wrong in saying that it agreed in January there would be 400 redundancies this summer?
I wish to make it absolutely clear that the agreement we reached did not specify a scale of redundancies. It was all contingent on the efforts of the company in securing the competitiveness of the plant and business. A critical ingredient in securing the competitiveness of the plant was the agreement agreed in January between the workforce and management. The company did not succeed in winning back sufficient business to keep the level of lay-offs low. Instead it proposes to make 400 temporary lay-offs. These figures were not available to us in January and could not have been available to us because it was all contingent on what could be achieved in the intervening period.
They were the facts as I stated them on every occasion I was asked. We were creating an opportunity to secure the future of this plant, recognising at all times that when the votes were lost in December the critical J2900 contract had been lost and assigned to other plants within the group. That is the way GM does its business. There is internal competition between plants which have to be competitive in making bids for new projects. Unfortunately, the company missed the boat on a critical contract. The best endeavour was then made to try to retrieve some of the contract and to win other business. Unfortunately, the company has not retrieved sufficient of that contract or created sufficient new business to deliver a lower level of lay-offs but it continues to remain committed to seeking, and is actively pursuing, other business.
Are they telling lies?
Who is telling the truth?
There is no question of people telling lies. The situation was crystal clear when we negotiated and met with management. It had a problem; it had lost a critical contract but it also had two opportunities' to restore the competitiveness of the plant and to bid for new business. They committed themselves to working towards both of those objectives but it has transpired that they have not secured sufficient business to maintain the workforce and they are proposing 400 lay-offs. At all times lay-offs were envisaged. That was set down in black and white, but no figures were mentioned in the discussions with management. It was a question of endeavouring to win business. That is the way business is done. You do not forecast employment levels six, eight or ten months ahead, and it is misleading to suggest that is the case.
It is easy for a manufacturing industry such as Packard Electric to cost-in the effect of the loss of a contract. Bearing in mind the existing business committed to the factory from other sources, the plant would have been well able to forecast that by June they would have to lay off 400 workers. This figure may well have been mentioned privately in the negotiations involving the Ministers but it was not made public. If it was, and if that was taken into consideration by management and negotiators, there would have been a totally different scenario.
Are the Minister and Minister of State aware of the total devastation that will be caused to the greater Tallaght area by the temporary lay-off of 400 workers, bearing in mind — the Minister of State is especially aware of this — that 42 workers in the Tallaght area have been laid off for 18 months? That is a serious matter of contention between management and trade unions. Is the Minister aware that community leaders in Tallaght are calling on the Government to make urgent efforts to locate a major industry in Tallaght to allow for the 400 lay-offs which, due to the activities in the company and management's approach, many of us fear will be permanent? I do not want that to happen, nor do the community leaders in Tallaght, the trade union leaders and the workers. Bearing in mind the catastrophic consequences of these lay-offs, what efforts are being made by the Government to locate a major industry in the Tallaght area?
The issue of the 42 workers is central to the negotiations. There is clearly a lack of trust on the part of the workers which is founded on the way the 42 workers have been treated in the past 12 months. That is an issue that must be resolved if we are to find a way out of this problem. Bearing in mind the devastation the Deputy rightly points to in the Tallaght area from a closure of this scale both sides must take serious account of their actions. They must avoid intransigence in their position, avail of the opportunities to negotiate and suspend action to make room for talks. Tallaght will remain a high priority on our list for creating employment and that will be the case regardless of whether this plant runs into difficulties. My principal concern today is not with finding an alternative industry but trying to secure the future of more than 800 jobs in this plant.
The Minister's reply on the issue of the 42 workers who have been laid off for some time is that this is central to the negotiations. In the document issued today from Mr. Schramm he stated——
Quotations at Question Time are not in order.
He stated that the point about bringing back employees who have been laid off is an end but is not a negotiable start. That clearly gives the lie to what the Minister has stated. The facts that have emerged today show political mismanagement of this crisis as it developed last September and January. I do not doubt the loss of confidence on the part of the workers can be clearly laid at political mismanagement as well as mismanagement of the plant across the water. Even though there is great unease, tension and anxiety about this matter, I would ask all concerned to give the plant one last chance of survival for the sake of the 800 jobs which are vital to the area.
This is no time for cheap party political games plying. There has been absolutely no party political mismanagement in this issue and the workers know that, I have spared no effort in trying to deal with this problem. We engaged in discussions at home and abroad at the highest levels in the company, with unions, through the IDA, ICTU, IBEC, the Labour Relations Commission, the Labour Court, European management and further afield, and we have spared no effort in trying to bring about circumstances in which this issue could be resolved. The Deputy misunderstands the position of the 42 workers. It is not suggested that they should be brought back to the plant. There are other remedies to deal with that problem that would perhaps be satisfactory.
There must be trust in management so that people realise they are serious that these are temporary lay-offs. They must demonstrate in a tangible way what they will do to make the plant more competitive. They must show how they will re-engineer the plant and win back business. They must demonstrate their good faith, particularly to the 42 workers who have been laid off. That will prove to those who are being asked to accept temporary lay-offs that management is dedicated to providing a future for their staff. We must not use the time of one minute to midnight in political point scoring but must try to secure a future for this plant. I appeal to both sides to avail of the remaining time to draw back from intransigent positions and deal with the issues in open negotiations.
Since the Minister lays so much emphasis on the need to restore competitiveness to this plant, does he agree it is crazy that £5.5 million is taken out of the gross payroll bill of £15.5 million for that plant? It is uncompetitive because the Minister confiscates 35 per cent of gross employment costs every year in levies and taxes. The crucial lesson to be learned from this is that employment-intensive industries cannot survive as long as there is an anti-work tax system, which is destroying the Packard Electric plant in Tallaght. Would the Minister agree that if this plant was located in Newry it would be between £750,000 and £1 million more profitable than it is in Tallaght, solely because of taxes and levies?
I agree with the Deputy that this Government must deal with anti-employment taxes, and a start has been made in the budget in reducing the rate of employer's PRSI for persons on less than £12,000 and exempting the first £50 of employee's PRSI. We have to go further in regard to reform. It is a handicap to our labour intensive industries, but one which the Government is prepared to tackle.
Given the level of mistrust within the company and the apparent lack of clarity in its commitment to the development of the plant here, is it not time for the Minister of State, Deputy Rabbitte, to go to the headquarters of General Motors in the United States to ascertain its level of commitment to its Irish plant and what conditions it wishes to apply so that the Minister can establish if it is committed to the future of the plant? That would enable the Minister and his Department to establish what other measures they need to put in place to secure the future of that plant.
We want to get the correct story.
We want the truth.
The reality is I have left no stone unturned. I have been in touch on a number of occasions with senior management in the company during the past few days about many of the issues——
Was that here or in America?
Both here and in Europe where the decisions are ultimately decided. It is not a matter to be dealt with by taking a shuttle around the world, but one to be dealt with by the two sides. If they step back from intransigence, they have the resolution of this dispute within their hands. I am disturbed if, as Deputy O'Rourke said, letters are circulating, which I have not seen, which may be provocative regarding reaching a solution. That is not what we want.
The Minister is not up to date.
Who is in charge?
We need a calm atmosphere and people to use the services of the Labour Relations Commission to negotiate.