Vol. 470 No. 4
8 Mrs. O'Rourke asked the Minister for Enterprise and Employment the industries he had in mind when he told the media on his return from a recent trip to the United States that companies were in danger; the changes, if any, he has made to improve his Department's early warning system for companies in difficulty and the employment protection unit of his Department; and the number of firms with which the unit is currently working. [19157/96]
We are now operating in a competitive global market where products have life cycles and certain industrial processes become uncompetitive as technology migrates to the emerging low-wage economies. Accordingly, in a dynamic, open economy, companies must constantly review their products and processes and be prepared to restructure and retrain in response to global competitive pressures. In certain cases it is regrettable but inevitable that closures or scaling back will result from addressing the effects of the global marketplace.
My recent trip to the US demonstrated strongly to me that companies must be truly global in their approach. In this context, they plan the location and restructuring of production to maintain a cost advantage over their competitors. Failure by firms to do so will inevitably lead to their demise. Ireland is gaining from the process of globalisation as very many companies have recognised the competitive advantage of Irish skills and our business environment. However, there will also inevitably be certain job losses in this global restructuring process.
Information about individual firms in difficulty or likely to be in difficulty is both sensitive and confidential and it could be potentially damaging if it were to be publicised. For that reason it would not be desirable or prudent of me to mention specifically the cases I had in mind following my comments on my recent trip to the United States.
As regards the early warning system in my Department, it has been improved by introducing a more systematic review of problem cases where the State bodies consider there is a particular risk to the maintenance of jobs or the continuance of the business. The Deputy can rest assured that every effort is made to identify and help firms to take remedial action where that is possible with a view to improving competitiveness and maintaining employment to the maximum levels possible. There are some 24 firms included on the early warning system operated by my Department.
My Department, including its employment protection unit, plays a central role in co-ordinating and overseeing the early warning process. There is a close working relationship with State agencies and other interests involved with a view to ensuring that any assistance possible is made available in the most effective and efficient way.
It should be recognised that, despite the best endeavours of my Department and State agencies, responsibility in the final analysis for decisions on employment, and their timing, rests with the companies. Furthermore, it must be understood that the best early warning system will not in itself save companies in light of my earlier comments on competitiveness. A realistic approach to rescue activities has to be taken by the industrial development agencies.
The Minister has given us a bracing "belt up boys and girls and take your medicine" lecture. We referred earlier to gender equity. I agree it would be insensitive to give the names of the firms. However, when he returned he brought the situation into the open by saying on television that many firms faced closure or rundown. He invited comment and queries on the matter. In an already dismal situation where a firm faced closure it was highly insensitive and inappropriate to spread the load of shame and blame by talking about other firms also facing disaster.
The Minister said the early warning protection unit within the Department is now dealing with 24 firms. Can the Minister explain how this works? I dealt with it for a short time and am interested to know. Who triggers the early warning system and what is their aim?
It was not insensitive to refer to the fact that closures continue to occur. At the time we were dealing with particular closures, for example, Semperit, Tambrands and Scheisser. There was natural interest in all of those instances. I was asked how these circumstances developed and whether it is a feature of industrial development. It is a feature of industrial development and the Deputy knows that. Twenty four firms notified us of their difficulties through early warning out of 6,500 or more firms on the Forbairt and IDA lists. This is not a big problem. It is an ongoing situation with which we always deal. Redundancies are running about 5,000 lower than they were two years ago. We have a good record in maintaining a low level of job loss. Nonetheless, we must be attentive and have an effective early warning system. The system works well. A high level group of senior executives from the agencies work with officials in my Department who respond to the early warning reports and act accordingly.
How many are employed in the early warning system unit of the Department and what triggers it? What is the action then taken by that unit? Bravura speeches are fine but the labour force survey which came out today shows that while employment has increased, unemployment has been practically static. Can the Minister explain that to me?
There is a system in place where senior executives of the agencies meet senior officials in our Department on a regular basis to look at companies who have triggered the early warning system. It is primarily the agencies who bring such cases to our attention. We also learn of problems directly on occasion.
From a firm?
Yes. The agencies then examine the company's situation and identify the best way to approach the difficulty. The Deputy will be familiar with the protection unit in the Department which works on individual cases. This has a successful record in working with smaller companies with difficulties, the banks and other players to ensure that where possible, a company will be retrieved.
Deputy O'Rourke rose.
If I do not call Deputy Harney now, the Standing Orders prevent me from calling her later.
That cannot happen.
We may deal with the other two questions in ordinary time but then we would have to defer Deputy Harney's question altogether.
