Private Notice Questions. - Tallaght (Dublin) Proposed Plant Closure Proposal.

I will call on the Deputies in the order in which they submitted their questions and I now call on Deputy O'Rourke to put her question. The names of Deputies Flood and Tom Kitt also appear on that question.

asked the Minister for Enterprise and Employment what steps he intends to take following the announcement of the proposed closure of the Packard Electric plant in Tallaght and the threatened loss of 800 jobs; his views on the manner in which staff were notified of the closure by Packard management and the Government; his further views on whether there has been a lack of disclosure over many months by the Government and by Packard management regarding the facts and the reason the Government did not push the implementation of the reports of the so-called Government-appointed three wise men.

asked the Minister for Enterprise and Employment the plans, if any, the Government has to secure a replacement industry for Packard Electric, Tallaght, Dublin 24 to provide real and sustainable jobs for the workers of the plant in view of the imminent closure in July next.

I propose to take the two questions together.

As I already informed the House on 14 March 1996, the Minister for Enterprise and Employment, Deputy Richard Bruton, and I had a meeting on that date with Packard management. At the meeting, the management indicated that, as business prospects for 1996 remained poor, a redundancy programme would have to be implemented and in accordance with the June 1995 agreement between the company and the unions, details of the programme, including its impact on the workers laid off, would be communicated to the employees by 15 April 1996.

For the information of Deputies, the company's agreement with the unions, covering the situation that arose last year when, on 23 June 1995, 400 employees were laid off, provided that:

The Company will advise the Unions by 15 March, 1996:

(a) of business prospects for 1996. If prospects are such that a majority of those laid off will be reengaged over the first half of 1996, no redundancies will take effect until June 1st, in accordance with previous practice.

(b) if business prospects at 15th March indicate that a majority will continue on layoff over the first half of 1996, then a phased redundancy programme, again in accordance with previous practice, will be on offer from 15th April for those on layoff for whom a return to work date has not been determined.

(c) in the case of either (a) or (b) above, the period of layoff will be included in reckonable service for redundancy calculation and minimum notice calculation purposes.

No further details of the likely programme were available at that stage. The company reiterated its commitment to increasing the competitive position of the Tallght plant with a view to winning new business. Indeed, that same day, 14 March the managing director, Mr. Ferreira wrote to all employees "to reiterate that we are all committed to increasing the competitiveness of the Tallaght plant".

On 2 April, I wrote to union officials stating inter alia:

We ...stressed the necessity for the June 1995 agreement to be scrupulously implemented. We further expressed puzzlement that nine months later there was no clear statement about the future direction of the Tallaght plant.

However, the company advised us on 4 April that, due to difficulties in obtaining final details of its future business, it would not be in a position to inform the workforce of the proposed redundancy programme by 15 April 1996 as agreed. Having regard to the position outlined by the company at the meeting with us on 14 March, the Minister, Deputy Bruton and I were extremely concerned at the failure of the company to honour its commitment on this issue.

Accordingly, apart from voicing serious disquiet at developments, we requested Packard management to meet the union representatives immediately in order to ensure there was no further breakdown in communication.

It was again impressed on the company that information and consultation are cornerstones of our industrial relations system and that the Labour Relations Commission was available to assist in promoting a resolution and to enhance productivity and performance in the Tallaght plant.

In response to our request the company met the unions on 12 April and indicated they expected to be in a position by the end of May 1996 to make an announcement about the redundancy programme and plans for the future of the plant. The unions were dissatisfied with that meeting and again sought a meeting with me which took place on 16 April. They said they could not get meaningful answers from the European or local management, that morale was low and sought my intervention with senior executives of the company. We discussed at some length the tactics of such an intervention and ultimately we agreed to the union request and accordingly wrote to the company setting out the dissatisfaction and urging the earliest meeting with the unions to provide the fullest possible information.

We did not receive a reply from the European or local management but contact was made with us from Delphi-Packard headquarters in the US. We responded immediately and on the same date, 19 April, Mr. Battenberg, President of Delphi and Vice-President of GM returned my call. He told me he was aware of our representations, that he had stark news for us but that he wanted to come to Ireland to meet me directly and asked if I could arrange for him to see the Taoiseach.

I wrote to him the following Monday and set out the dissatisfaction with the way the plant was functioning and reiterated our arguments for the future of the plant at Tallaght even after a redundancy programme.

I want to emphasise that in the history of industrial relations in Ireland Packard is unique. Since late 1994 there has been a continuous and constant involvement in the affairs of this private company by Ministers and civil servants. This was done not because we wished to be involved or that it was always necessarily considered a good idea that Government become involved; it was done due to an evident gap between the real managers of Tallaght based in Europe and Coventry and the employees at Tallaght. Indeed not only were the workers at Tallaght not informed of company plans but local management seemed to be in the dark.

We, most uniquely, felt an obligation to help both sides to bridge that confidence gap. We tried to do so, because since we first became involved in December 1994 there had been many written and oral statements from the management of Delphi-Packard stating its commitment to Tallaght.

Yesterday afternoon, Monday 29 April, I met the US President of Delphi-Packard who is also US Vice-President of General Motors with responsibility for autmotive components. Subsequently, the Taoiseach met him, representatives from the IDA and myself.

At the meeting I reiterated the Government's serious disquiet at the continuing uncertainty facing the Tallaght plant and workforce and again stressed the need to clear the air on the future of the plant. Resolution of this issue without further delay was essential in the interests of the workforce and the image of Ireland as a centre for foreign direct investment.

The US and European management advised me that, after considerable market and other analysis it had reluctantly concluded that the Tallaght plant did not have a viable future. This situation had to be seen in the context of the continuing substantial overcapacity in the automotive component sector, especially cable harness, in both Europe and world-wide, and a much more favourable cost environment in competing locations, particularly in Eastern Europe. This had very adversely affected market prices for this labour intensive product and recent further price reductions had compounded an already difficult situation. As a consequence the Tallaght plant was incurring substantial losses and projections for 1996 and 1997 showed considerable acceleration in those losses. In the parent company's view there were no further remedial measures, even on the basis of a reduced plant workforce, which could be taken to put the plant on a viable basis. Accordingly, it had decided reluctantly to phase out operations at the Tallaght plant by the end of next July.

The Government had no prior indication of the scale of the current and projected financial losses at the Tallaght plant. We are naturally shell-shocked at the proposed closure, its catastrophic effect on the Tallaght area and the manner in which the workforce learned of its future. Management advised us that it was its intention to inform the workforce of the position on Thursday next, 2 May at 10 a.m. The Government and its agencies have done everything possible to assist the company, including the provision of assistance to the technical advisory group which was established to facilitate measures to improve competitiveness. However, in the final analysis the company was responsible for its operations, including any implementing action arising out of the group's report.

We are now facing a very serious jobs situation at Tallaght and in order to address this the Government today approved a proposal that I establish a local task force. Its membership will be announced later, but I can confirm that it will be chaired by local industrialist Mr. Dan Tierney, chief executive of the Cross Group, and will include county manager Mr. John Fitzgerald and representatives of the IDA, Forbairt, FAS, the Tallaght-South Dublin Chamber of Commerce, the chairman of Packard Shop Stewards' Committee as well as a person nominated by Tallaght regional technical college.

In discussion with the Vice-President of General Motors yesterday I have been assured that every assistance possible will be given to ensure an orderly wind-down of the Tallaght plant and that full co-operation will be forthcoming to assist IDA Ireland in finding a replacement industry. In this context, also, IDA Ireland will be discussing with senior General Motors management the potential for alternative investment projects in Ireland. The best way forward is for the company to work closely with IDA Ireland in making the plant available to promote new investment. I am concerned that this represents the single most important infrastructural resource in the area, comprising over 15 acres and 120,000 square feet of a modern factory complex. There have been several examples of such marketing approach, the most recent being Digital in Galway.

All of us are of the opinion that the manner in which the workers in Packard learned of their fate was brutal and savage. To be in your kitchen and, on turning on your television, to learn from the 9 o'clock news that you were shortly to lose your job must have been shocking for those concerned. The closure of this plant will affect not only the 800 who will lose their jobs but their partners or spouses and other members of their families, notching up to perhaps 3,000 people who stand to be severely affected. Before putting what I hope will be constructive proposals, I wish to record my abhorrence of the manner in which the news of the closure of the plant was related to the workers. It should never have been broken in that way. Irrespective of whether it was part of an all over, drip-drip plan, it was disgusting, abhorrent and has no place in Irish life in terms of dealing with employees.

The Minister of State mentioned the possibility of setting up a task force, a proposal I put forward also on radio this morning but I suggest that this should be in a somewhat different vein from the task force set up in the case of Digital. On behalf of my party I wish to put forward the constructive proposition that the Tallaght Regional Technical College, a project which I was glad to give the go-ahead and which is up an running and a significant facility in the region, immediately puts in place a properly focused retraining programme to bring to another level of competence the semi-skilled workers involved who have an electronics base. Such competence could then be used in trawling a replacement industry.

There were three wise men to whom the Minister of State referred as the technical advisory group. I have never seen its report and I am not aware of its recommendations for Tallaght, but if that group has ideas, it should put them forward now.

The workers employed in Tallaght were making one product for one buyer. They have vast skills many honed over 21 years. If their product were upgraded and remarketable on a wider international scale, it could find a ready sale.

Regarding this mishandled sorry saga, only two weeks ago the Minister of State, Deputy Rabbitte, told me to stop interfering in the Tallaght operation, that I had no right to put forward propositions for it as is on record, I responded that I had every right to do so and I will continue to do so because I take seriously my job as party spokesperson on enterprise and employment.

(Limerick East): This is a speech.

It is a statement, not a question.

And the Deputies opposite do not like it.

In that vein I put forward proposals. I have every right to do so and will continue to do so.

Will the Minister of State indicate if the news of the closure was released from his office to the media last night?

I assure Deputy Harney that is not the case. I agree totally that the manner in which the workers at the Tallaght plant heard of their future should not be tolerated. As Deputy O'Rourke said, it was brutal and savage. Given the previous 18 months' experience of industrial relations at the plant, it is inconscionable that the workers should have heard the news in that fashion.

Regarding the task force and its composition, I assure the House that there will be a nominee, Ms Eileen Foulds, from the regional technical college to the task force. It is acknowledged that the upgrading of skills and retraining are an essential part of preparing this workforce for the prospect of alternative employment in their area.

Before calling Deputy Kitt, I wish to remind Members that the rules governing supplementary questions also apply to this question and answer session.

The Minister should stick to her brief.

Will the Minister accept that he has been conned and duped by this company for more than a year, has displayed an extraordinary level of naivety and incompetence in dealing with the parent company and has participated indirectly in deceiving the workforce during this period by living a lie and building up their hopes falsely?

This is a disgrace.

It is the truth and, as the Minister knows well, sometimes it can hurt. Did the IDA give grant aid to this company over the past 18 months and, if so, how much?

In reply to the serious part of the question, the IDA gave no aid to the company over the past 12-18 months but it paid for the study put in place arising from the meeting in Coventry in January 1995. The three consultants appointed to perform that study in terms of the re-engineering of the plant, the reorganisation of the work methods, the installation of world-class manufacturing, the introduction of the cell system, etc. were paid for by the IDA. That is the only grant paid by the IDA over the past 18 months. However, the IDA held out clearly at the Coventry meeting and subsequent meetings that it would be willing to entertain a proposal from this company for any alterations or changes it wished to make in terms of getting the plant up to a certain competitive level of performance.

I do not know if there is much merit in dealing with Deputy Kitt's question about my being conned by, or having been a dupe of, General Motors. This seems unlikely and I do not know what the Deputy is getting at. No recent example in the history of industrial relations has attracted so much involvement by the agencies of the State, senior civil servants and two Ministers as this plant. Within three days of the Government coming to office we were confronted with this problem. On 22 December 1994 the Minister, Deputy Bruton, issued the following statement:

I have been in touch with the company and I understand that the contract which accounted for up to 80 per cent of the company's production had been lost. If this position is not reversed then there will be catastrophic consequences for Tallaght in terms of jobs. I am keeping in touch with the situation but I must admit that the outlook is bleak.

Looking back on that statement — and Deputy Kitt, in splendid isolation, can look back on it with the benefit of hindsight — it may well be the case that this company intended to withdraw from Ireland in December 1994. Our direct intervention at that time was successful in rescuing the plant over the past 18 months but I agree that since then the commitment by the plant in terms of written and verbal undertakings given have not been seen to be implemented at shop floor level by the workers concerned. It is a nonsense and waste of time to talk about any Minister having been a dupe of the company. What was a Minister expected to do? This is the largest company in the United States and it gave us written undertakings. If one cannot accept written undertakings from a company of that calibre then it is very difficult to do business. We proceeded on the basis of those written undertakings and yesterday's decision unfortunately seemed to be the inevitable outcome of the economics of the situation as the company sees it.

The Minister of State has certainly changed his tune.

If the Minister knew the position yesterday, did he not think it correct and proper to inform the workers or their representatives? I am not sure if the joint arrangement was that the announcement would be made on Thursday but it was the Minister's duty to inform the workers of the position yesterday.

No, it is not my job to communicate with the staff of General Motors in Tallaght.

That is what the Minister has been doing all along.

That is a task for the management of the company.

When the Minister has good news he does so.

If I were to function as a messenger boy for the company then I could be legitimately open to the accussation so weakly put by Deputy Kitt.

What a change.

When the Minister was on this side of the House he had the answers to everything but he has the answers to nothing now.

The Deputy does not even have questions.

A Deputy

The Minister has failed, he gets a zero rating.

Given the unemployment crisis in Dublin South-West and that this is one of two constituencies which has two representatives at the Cabinet table, will the Minister accept that the commercial development of Baldonnel Airport would greatly boost the employment potential of the region? Will he have that proposal reexamined?

This is an area of very high unemployment which Deputy Harney and I have the honour of representing. Last year a substantial number of new enterprises opened in the Tallaght region. For example, UPS, which employs 200 people, is expected to increase this figure to 900 in the near future, Xilinx, which employes 120 people, is expected to exceed the promised figure of 180, while Saturn, which employs 95 people, is expected to increase this figure to 165. Last week I announced the opening of the GEA plant at City West which will employ 170 people.

A Deputy


As Deputy Harney will agree, there is much good news in the Tallaght region.

On the specific question of Baldonnel, this is much more complex than the context in which it has been put here. It is perhaps inevitable that there will be some element of civilianisation of Baldonnel in the near future. It is inevitably the case that an airport has a clustering effect and as a result employment is generated in the area. However, there are wider consideration and these were gone into in great detail by my colleague, the Minister for Transport, Energy and Communications in his assessment of the situation, the implications for Dublin Airport, etc. No project which is likely to contribute to economic activity and employ people in the area will be ruled out and I will be happy to look at it.

What does the inevitable civilianisation of Baldonnel Airport have to do with this question?