Dáil Éireann díospóireacht -
Thursday, 9 Oct 1997

Vol. 481 No. 3

Adjournment Debate. - Companies' Special Financial Assistance.

Mr. G. Reynolds

Over the past few months large numbers of jobs have been lost because of competition from low labour cost countries flooding markets with manufactured items leaving Irish companies vulnerable and unable to compete.

I raise this issue specifically because in my home county of Leitrim we are about to lose over 100 jobs in temporary lay-offs next week and, if the markets do not improve, we could lose up to 310 jobs in ensuing months. While that would be a serious blow to any large town or county, County Leitrim would be devastated by such an enormous loss of manufacturing jobs which would also result in the loss of an additional 100 jobs in service industries.

Companies like WOCCO in Carrick-on-Shannon and Ballinamore Textiles are experiencing great difficulty in sourcing markets abroad and this is placing all their jobs at risk.

I call on the Minister, in order to give hope to the many people nationwide whose jobs are being placed at risk, to implement immediately a financial package to help save these companies and source markets for them. Job creation is an important element of any Government policy but the retention of existing jobs is equally important.

When Deputy Richard Bruton was Minister for Enterprise and Employment he introduced a scheme giving companies extra incentives to locate outside of Dublin and other large cities, which policy was most welcome and forward-looking.

It behoves the present Minister for Enterprise, Trade and Employment to devise a specific policy to save existing jobs, particularly those in the manufacture of textiles and other products which have been subjected to enormous pressure from low labour cost countries.

Ballinamore Textiles established a manufacturing outlet in my home town 25 years ago and instead of celebrating that fact, unfortunately, it now finds that it must lay off 60 people temporarily. It is a company that always has been a great supporter of our local community, its management team all residing locally. Its manager, Mr. Hugh Murphy, is one my longest and oldest friends who, unlike most of his contemporaries on finishing school in the late seventies, was not forced to board the emigrant ship.

Is it not ironic that at a time when our economy was never in better shape — described as the Celtic tiger — 160 jobs will be lost in Ballinamore if the Government does not take some immediate action to help such companies by way of financial assistance?

It is also my understanding that if those companies want to diversify their operations and install different or additional plant and machinery State agencies are unwilling to help. I find that incredible. Such companies seek markets in other manufacturing sectors, yet State agencies are unwilling to assist them, something to which the Minister and the Government will have to devote their immediate attention. They must introduce policies to give the people of Leitrim and other counties the help they need in creating additional jobs and retaining existing ones.

Minister of State at the Department of Public Enterprise (Mr. Jacob)

The issue raised here by Deputy Gerard Reynolds brings sharply into focus the need for Irish enterprise to both maintain and improve its competitiveness.

Through prudent management of the economy and better budgeting discipline, the competitive environment for Irish enterprise has been improved considerably, for example, business taxation has been kept at modest rates; competition law has been strengthened; our infrastructure has been significantly improved with financial support from the EU; our long-term investment in education is now paying off; and through consensus with the social partners we have a more flexible and competitive labour force.

However, we cannot afford to be complacent. We must continue the drive to improve our competitiveness to enable us to meet both the opportunities and the competitive challenges worldwide in an increasingly open and global marketplace.

One of the first initiatives of the Tánaiste as Minister for Enterprise, Trade and Employment was to meet members of the National Competitiveness Council at their inaugural meeting in June and to set them, on behalf of the Government, the important task of ascertaining how we can realise our fullest potential and step up our competitive position in global terms.

In formulating our programme for Government, An Action Programme for the Millennium, we set out our key priorities for the development of enterprise over the coming years many of which are aimed specifically at assisting Irish enterprise exploit the opportunities and meet the increasing competitiveness of the global marketplace. These include progressive changes in the corporation tax regime to secure a standard rate of 10 per cent by the year 2010; the utilisation of the tax system, including capital taxes, to encourage entrepreneurship; delivering a client centred approach in the State's interface with business and streamlining structures and programmes to help deliver increased competition and jobs; keeping the concerns and growth potential of the small business and services sector to the top of the political agenda and the development of a new system of traineeships and the examination of the future role and structures of FÁS.

Competitiveness is determined by a range of factors, both cost and non-cost based. Securing an improvement in cost competitiveness, which includes a stable macro-economic environment, is essential but not entirely sufficient for maintaining long-term competitiveness.

In the medium to long term competitive strengths require above all a capacity to innovate, develop new products, access new markets, apply new technology, introduce best management practise and develop skill levels across the labour force. Building the capacity of indigenous enterprises is central to this important issue of competitiveness.

Significant financial and other supports are available to Irish firms through the development agencies of the Department, across the range of firms' functional activities from marketing to training and production. These are helping companies improve their performance and capability to meet competitive pressures whether from low cost countries or elsewhere.

An Bord Tráchtála, whose total annual budget exceeds £40 million, provides assistance to firms for the marketing of Irish goods and services. It provides a range of support services and in-market activities positioned to respond to the needs of client companies in growing their international business. An Bord Tráchtála also provides direct financial assistance to companies with potential and commitment to substantial export growth.

An Bord Tráchtálta recently launched new services to assist companies improve their competitive position in the marketplace. A new products programme assists manufacturers to develop new products for export markets through financial support and sourcing. Trend forecasting services assist manufacturers to keep up to date on clothing trends in Europe and the US and plan their production 12 months in advance.

Options open to companies under competitive pressure arising from increasing competition from low labour cost countries which would enable them to remain viable in the medium to longer term range from identifying new market opportunities, including niche markets, where price is not the primary source of competitive advantage — assistance to firms in this respect is primarily the responsibility of An Bord Tráchtála; improving their own competitiveness by becoming as efficient and as effective as possible across the whole business system by developing new products and processes which enable them compete successfully in new and existing markets, and identifying new sources of competitive advantage based on innovation, services just in time delivery and design.