Vol. 460 No. 5
8 Mrs. O'Rourke asked the Minister for Enterprise and Employment if the Task Force on Industry Adjustment will be offering assistance to the Farah clothing firm; and the action, if any, he is taking to secure the jobs at the company and in the clothing sector generally. [1562/96]
The Irish Farah operation with plants located in Kiltimagh, Ballyhaunis and Galway is owned by Farah Incorporated which is located in El Paso, Texas.
Farah's corporate management has, for some time, been carrying out a restructuring of its worldwide operations and this has now resulted in the present position whereby the company has sought around 100 voluntary redundancies. I understand that the workforce has rejected the redundancy package offered by the company and, while no overall agreement has been reached, there is an indication the workforce believes that short-time working may be a better alternative.
Over recent months IDA Ireland has been working intensively with Farah and other potential investors in its efforts to secure the future of the three Irish plants. IDA and Forbairt continue to vigorously pursue this objective and a number of different scenarios is being considered.
As regards the clothing industry generally, I recognise that this area is one of the most vulnerable sectors facing increasing competition on worldwide markets. Labour intensive sectors like clothing need to become more competitive and this Government has made a major commitment to facilitate this process by the changes in PRSI and income tax announced in the budget. These changes are part of the overall process of tax reform aimed at increasing both the incentive to work and take-home pay by reducing the tax wedge. Arising from my contacts with the industry I am confident that these improvements will continue to be of great help to the sector in tackling the competitiveness issue. The change programme referred to above should also be of considerable assistance to the sector.
My Department is continually looking at ways in which the clothing sector can be assisted in the repositioning and readjustment process which is necessary to adapt to the rapidly changing market-place. My Department, the State agencies and the industry representative associations continue to work in a co-ordinated and constructive manner in an effort to address the issues facing the industry.
Negotiations on all the options are at a particularly sensitive stage and I am anxious to ensure that these can proceed in a constructive and positive manner. I can assure the Deputy that IDA (Ireland) and Forbairt will continue to work closely with all interested parties in their efforts to minimise redundancies and to ensure a positive outcome from these discussions.
I would like to clarify the position in relation to the Task Force on Industry Adjustment. This group which comprises representatives from my Department, the industrial development agencies, the Labour Relations Commission and the social partners — IBEC and ICTU — provides the overall policy direction.
Under the measure a change programme for SMEs was introduced. As the Deputy is aware the measure which I launched on 18 December 1995, is designed to provide financial support and advice towards helping traditional manufacturing sectors adapt to the increasing levels of competition. Arising from the objective to help SMEs in traditional sectors like clothing, this particular programme is being administered by both Forbairt and Shannon Development. Assistance may be available under the programme to any revised structures which may emerge from the current negotiations in relation to Farah.
Is the Minister aware of the comments of the Irish Clothing Manufacturing Federation on the budget? It is obvious from his comments this afternoon that he is insulated, but these comments were made by a reputable organisation and reported in a reputable newspaper. It claims the budget will mean a paltry increase to that sector. Having taken PRSI and so on into account, it will mean £2,500 in one year to an employer, employing 50 people, in a clothing manufacturing business. They are the vaunted proposals for which the Minister has clapped himself on the back about 40 times. Is he aware of those comments and, if so, does he cast cold water on them or agree with them?
Employers in the clothing industry will benefit significantly from the PRSI reforms as well as from the general reforms in the budget. They will benefit in particular from the change programme. Under that programme companies who endeavour to improve their process of production can receive support for management development, training initiatives and partnership arrangements. That is merely part of a range of measures being devised for the clothing industry. Forbairt is currently working on new training initiatives, a number of which will be specifically designed for the clothing sector. These include the pilot innovation training schemes and the RETEX initiative. Several initiatives are designed specifically to assist this sector to reposition itself. There is no doubt that in order to thrive in the much more vigorous global competition, this sector will have to reposition its products and these measures are designed to assist them to do that.
I put it to the Minister that RETEX and many other measures which the Minister paraded today, have been here for years. RETEX did not materialise today when the Minister announced it; neither did other training measures when Deputy Quinn announced them. When Deputy Brennan and I were in the Department of Enterprise and Employment, the special training measures were introduced in response to a very real need, so the Minister is recycling old measures here. What I am referring to is the industry's response to the Minister's arrangements for them in the budget. It is necessary to clarify an earlier comment from the Minister. How many people does he propose to put on the £80 per week subsidy for 1996?
The change programme, to which the Deputy referred in her question, is a new programme introduced before Christmas and designed particularly to assist companies in the traditional sectors to reposition themselves. The Deputy asked about other measures. This scheme is new.
RETEX?
RETEX is not new. I am talking about the change programme to which the Deputy referred in her question. RETEX is still available to the sector; we are assisting this sector with a range of measures. I would be the first to acknowledge schemes that were put in place by previous Governments where they are worthwhile and beneficial, but I was asked to describe the role of the change programme which has been announced.
That very valuable programme will be built on the company development approach, it will involve a brief diagnostic type study of the needs of the company and will then allow the company to either improve its production process under the scheme, strengthen its management, develop new training initiatives, raise new funding for the business or enter into partnership arrangements; there will be a range of options.
It will also allow companies to avail of other programmes under Forbairt, for example, where they can draw down useful support for their company. It is a new approach and one that will be very worth while in its implementation. It responds to a genuine feeling that the last industrial programme overlooked the need of some of the traditional sectors found to be in difficulty. There was too much emphasis on job creation, new companies coming in. We needed to look also at the needs of traditional sectors.
