Dáil Éireann díospóireacht -
Thursday, 27 Jan 2000

Vol. 513 No. 2

Adjournment Debate. - Plant Closures.

Mr. McGahon

I wish to share time with Deputies Farrelly, Kirk and Owen.

The closure of Hawkesbay Leisure Limited has brought devastation, fear and anger to Ardee, a very pleasant town which has been overshadowed by Dundalk and Drogheda over the years. The loss of the major employer in Ardee has been a tremendous blow to the morale of the town. There is anger that over the past 20 or 30 years not enough effort has been made to attract industry by successive Governments. With the exception of Farrell's joinery works, the town was totally dependent on Hawkesbay Leisure.

In many cases the employees of Hawkesbay Leisure are the breadwinners in their families. There is fear in the town among business people that this is yet another step backwards given the contribution the workers made to the economy of Ardee. There is anger at suggestions that perhaps all or part of this industry might move to fill the void created by Fruit of the Loom in Donegal, where the job losses are another tragedy. There is also a fear that because of the demand for workers by Xerox in Dundalk, a very welcome addition to the town, the IDA might take its foot off the accelerator in looking for a replacement industry for Ardee. Nothing less than a replacement industry will suffice for the people of Ardee and the surrounding areas. The people will exact a full penalty if sufficient efforts are not made in this regard.

Over the years not enough effort was made by political parties, including Fine Gael, and I ask the Minister of State to give an assurance that the business will not be transferred in any shape or form to fill the void in Donegal. We need the industry in Ardee and we will accept nothing less than an assurance from the Minister of State in this regard. I also want him to give an assurance that the IDA will leave no stone unturned in its efforts to get a replacement industry for this fine plant which is ready for occupation.

There are suggestions that perhaps a pharmaceutical company will come to Ardee. If this is so, I would welcome it and be grateful for it, as will everybody else in County Louth. Nevertheless, that is for the future, and while it might be reassuring for the people of Ardee, the only assurance I am seeking from the Minister of State is a guarantee that this plant will not manifest itself in Donegal in any form in the future and that the IDA will place the same emphasis on seeking a replacement industry as it has on finding a replacement for Fruit of the Loom in Donegal.

Mr. Farrelly

I thank my colleague for allowing me to contribute to the debate. Up to 50 employees of Hawkesbay reside in my constituency and its closure was a devastating blow to the area. I do not want the Minister of State to tell us that the IDA has secured a factory on lands that the North-Eastern Health Board held on to and then sold to the IDA even though it wanted them for Ardee and the surrounding area. It is a devastating loss and I ask the Minister of State to put a task force in place in conjunction with the Ardee Chamber of Commerce and the urban council to pressure the IDA to find an alternative industry for that modern complex. In addition, I concur with Deputy McGahon regarding the owners of Hawkesbay. We do not want them to set up in Donegal with the help of the IDA, as has been stated. I want the Minister to state that is not the case. A task force is required following the loss of 300 jobs in this area where many young people have built homes and taken out mortgages.

Mr. Kirk

I thank my constituency colleague, Deputy McGahon, for giving me the opportunity to make a brief contribution to the debate. The closure of the Hawkesbay plant has been a devastating blow to Ardee as it was the major industry there. The workforce was drawn not only from Ardee, but also from south Monaghan and north Meath and it was a significant industry for that region. Hawkesbay took over from Lee Jeans when it bought the company out in 1998. There has been a long tradition of textile manufacturing in Ardee and the skill base is quite significant. Hawkesbay ran a single product plant and that is problematic for any operation if difficulties arise in the marketplace. The explanation proffered was that because of fashion changes in the marketplace demand has fallen for the jeans that were manufactured there and, consequently, the need for the Hawkesbay manufacturing operation in Ardee has been diminished.

The company bought the Fruit of the Loom plant in Raphoe, County Donegal, and all of us are aware of the difficulties that were experienced there. It is important that a transparent explanation is given to the people of Ardee for this move. Every effort has been made to attract industry to the town. It has an unfortunately chequered history, but Galen Holdings, which is a significant pharmaceutical firm in Northern Ireland, indicated at its annual general meeting two months ago that it planned to invest in the town. Deputy Farrelly, who is a member of the North-Eastern Health Board, will be aware that a 50 to 60 acre farm in Ardee has been sold for industrial development purposes.

We want the Galen Holdings project fast tracked as an indication of the Government's commitment to the local economy. Hawkesbay has been at the heart of this economy and a replacement industry is needed as quickly as possible.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Treacy)

I thank the Deputies for raising this matter. I share fully their disappointment at the announcement of the closure of the Hawkesbay plant. Hawkesbay Apparel Inc. was established in Toronto, Canada, in 1975 to produce jeans and jackets for the US market. The company is owned by the Valliani family and operates two plants in Pakistan and Dubai, employing 800 people. In early 1998, Hawkesbay acquired the Vanity Fair plants at Ardee, Derry and Newtownards and continued to produce Lee and Wrangler jeans, for the European market for VF under contract. However, the Ardee facility experienced major labour turnover problems and found it difficult to find replacement staff.

Unfortunately, on 5 January 2000, Hawkesbay Apparel Inc. announced that it was to close its Ardee facility, which will result in the loss of 280 jobs. The unit is to close on 4 February. The company also announced that a total of 160 people will be made redundant at Newtownards and Derry. The closure of the Ardee plant and the redundancies in Northern Ireland are a direct result of the loss of the contract with VF Corporation to produce Lee and Wrangler jeans for the European market. This contract was the mainstay of the company's production in Ireland, North and South, for the past two years and its loss is a result of continued decline in market demand for VF jeans in Europe.

Senior officials in my Department and the development agencies met representatives of the workforce and trade union representatives soon after the closure announcement. It was explained that neither the IDA nor the Department had any prior notice of the decision to close the plant. While there was no possibility of a postponement or a reversal of the decision, the worker representatives were assured that the development agencies, would do everything possible to find alternative employment for the workers affected.

FÁS has been actively involved with the company since the closure announcement. FÁS staff have visited the Hawkesbay plant and have registered 170 of the workers. It is setting up a dedicated computer tracking system for the Hawkesbay workers which will maintain details of their skills and training needs and will also facilitate the matching of the jobs skills of staff with potential employment opportunities in companies in their area. FÁS is currently going to tender for the provision of a computer training course which will be held in Ardee and a keen interest in computer training was expressed by the Hawkesbay workers.

A recruitment fair has also been held in the Hawkesbay plant which was attended by up to ten companies, including two recruitment agencies. In addition, companies which were not represented at the fair have been in touch with FÁS and the company about job opportunities. The IDA is in constant ongoing negotiations with a specific client in regard to a greenfield site in Ardee. In September 1999, the IDA agreed to the sale of the Fruit of the Loom plant in Raphoe, County Donegal, to Hawkesbay on the basis of a business plan to produce clothing for a number of smaller fashion designer branded companies along with department and chain stores. The contract for sale was closed before the announcement that Hawkesbay was to close. The IDA is still in discussions with Hawkesbay regarding its future plans for Raphoe.

Mr. McGahon

That is not good enough.

Mr. Treacy

The IDA's policy is clear. It supports foreign direct investment in Ireland and provides facilities, opportunities and incentives for investment in particular locations commensurate with the interests, needs of the client and market opportunities. The Deputy can be absolutely certain that we have no desire to, nor will State agencies, assist companies to relocate from one region to another. Upon procurement of an asset by any company, nobody has the right to prevent it from going into production, even without State aid if it so desires. We are not the final arbiters.

Fortunately, the Louth region has both shared in and contributed to major economic growth in Ireland and has seen tremendous development in recent times. While the job loss announcement in Ardee, is clearly a major blow to the workforce, employment prospects generally are positive in County Louth at present. Xerox is in the process of developing a major technology park in Dundalk, the construction of which is well advanced. I visited the site and it will be a model for future investment here. Xerox has already recruited 285 people, with the number of jobs set to increase to 2,100 by the end of 2003. Xerox has already had a major impact in Dundalk, both in terms of investment and in increasing business confidence in the area and the company has already developed strong links with the Dundalk Institute of Technology and the local chamber of commerce.

In another significant development, ICL, one of the world's leading IT companies, is to establish a 160 job software centre in Dundalk which will specialise in the implementation and development of software applications based on Oracle technology. This new centre will employ more than 100 software developers within three years, consisting of highly skilled, high technology third level graduates. Since its start up in May 1999 ICL has already recruited 30 people. I assure the Deputies and all other colleagues that the State agencies will give every assistance to the employees at Hawkesbay to find new employment and we are hopeful that the generally very positive situation in County Louth will lead to early re-employment for the people affected by this unexpected closure.

Mr. McGahon

We referred to Ardee, not Dundalk.

Mr. Treacy

We will do our best and we will deliver.

Mr. Farrelly

A task force is required.

Mr. Treacy

I will recommend it for consideration.