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Dáil Éireann díospóireacht -
Thursday, 5 Jul 2001

Vol. 540 No. 3

Adjournment Debate. - Job Losses.

Ba mhaith liom buíochas a thabairt as cead an tairiscint seo a thabairt. The announcement yesterday that Herdmans of Ballybofey is closing down, with the loss of 85 jobs, came as a bombshell to the Ballybofey and Finn valley areas. Herdmans is a unique company and has provided valuable employment for many years on both sides of the Border. It set an example of what cross-Border industrial co-operation can achieve. This is the second major blow to the Finn valley area in recent months. In January, Nena Models in Stranorlar laid off a total of 43 employees. This was also a severe blow to industrial employment in the Finn valley.

The closure of Herdmans in Ballybofey leaves industrial and unemployment devastation in its wake and it is another chapter in the long and sad litany of factory closures and job losses throughout County Donegal in recent years. If one includes Fruit of the Loom, I estimate that there have been at least 3,000 job losses in Donegal in recent years. No county can afford such a haemorrhage of employment. The employees of Herdman's have given long and loyal service to the company. Many of them are the sole breadwinners for their families. Many are mortgage holders and are burdened with many more financial responsibilities. The announcement is a shock to those who now face a bleak future on the unemployment register. It will also have serious economic implications for that part of County Donegal.

Earlier this week, the IDA published its annual report which once more makes sad reading for Donegal and the north west. It again puts the region at the bottom of the list for job creation. Every region, with the exception of Donegal and the north west, shows significant increases in the numbers employed in IDA assisted industries. While total jobs created nationally increased by more than 16,000, there was an overall reduction of 96 in the north west. This is not an isolated occurrence. The same trend has continued each year since 1996. It is disgraceful and obviously the political commitment is not forthcoming to reverse the situation.

The Government appears to be taking Donegal for granted. The huge political support it receives from the county, where five out of six Deputies are supporters, is not obviously appreciated by the Government. At this stage, we are sick of rhetoric and empty promises. We cannot continue year after year to receive such body blows on the employment front. It is no wonder that Donegal is top of the league as far as unemployment is concerned, but bottom of the league as far as new jobs are concerned. I am asking that an emergency plan be adopted for the Finn valley. This area should immediately be declared a top priority region for job replacement. I refer not alone to Ballybofey-Stranorlar where this factory is located, but to other towns such as Drumkeen, Convoy, Castlefin and Killygordon.

It may not be too late to retrieve the serious situation in Herdmans. I appeal to the Minister and to all Government agencies to come together to save as many of these jobs as possible. For those who are losing their livelihoods, a generous package of remuneration must be available.

I have stood here on too many occasions in recent years to make pleas such as this on the occasion of closures in County Donegal. I hope I will not have to do so again in the near future.

I thank Deputy McGinley for raising this matter. I share his disappointment at the announcement of the closure of the Herdmans plant, as does my colleague, the Minister of State at the Department of Arts, Heritage, Gaeltacht and the Islands, Deputy Coughlan. We are all equally conscious of the employment situation in Donegal and of the needs of that area.

Herdmans (Ireland) Limited, was established in Ballybofey, County Donegal, in 1965, by Herdmans Limited of Sion Mills, County Tyrone, to produce linen yarn for final finishing at the Sion Mills facility. Over the years this process worked well but as costs continued to rise and the world price of linen continued to fall, Herdmans have been incurring losses in recent years. It is understood that the company has also been experiencing difficulties in relation to its effluent treatment facilities which will require considerable expenditure to rectify and which the company cannot afford. Based on these facts, the company has proposed to close the Ballybofey operation and let go the 59 full-time and 28 temporary staff at the plant.

FÁS has already been in contact with the company to offer its full range of services, including skills analysis, jobs placement, guidance and counselling interviews and identification of training needs. Depending on the requirements and needs of the staff, suitable training courses will be run and every effort will be made to find alternative employment.

Over the past 18 months IDA Ireland has radically changed its strategy with a view to achieving a better regional distribution of jobs. The agency's new strategy includes a focused sectoral and geographical approach for new inward investment projects, coupled with an added value focus for the existing base of overseas industry in each region. This new strategy also provides for an upgrading of IDA Ireland land in regional locations and the provision of new modern facilities in appropriate locations to cater for the emerging sectors.

In this context, IDA's strategies for Donegal have been formulated and tailored following a wide consultative process to meet the specific needs of the area. The agency's regional office was re-established in Letterkenny and the agency is in the process of relocating a number of key operating units into the north-west region. Engineering and consumer products, along with a section of international services are relocating in Sligo. This move is designed to stimulate and support growth from within the region.

IDA's strategy for the region is beginning to show positive results and the agency is confident that the recovery of jobs in the area will become more apparent as the new projects which have been approved make their impact in the years ahead. In this regard significant developments in Donegal will impact positively on the Finn valley region as it is located approximately 20 or 30 minutes from Letterkenny, which is the main focus of IDA's activity in Donegal.

Phase 1 of the development of Letterkenny Business Park has been completed. PacifiCare, which currently employs 180 people, now occupies building one. The company recently announced an expansion project to create an additional 160 jobs at full development. Work is nearing completion on the provision of a second 25,000 square foot advance factory at the park and planning permission has been sought for a third advance factory.

Prudential Insurance Company of America has a new office facility at Letterkenny Office Park and currently employs 150 people. That company will expand its operation in Letterkenny with the support of IDA Ireland, and will add 325 new jobs by the end of 2003, with a potential for a further 125 new jobs as the operation develops.

Other job expansions in the area include the following: Kirchhoff Ireland recently announced an expansion involving an additional 50 people at full development; Interventional Technologies (IVT) has announced plans to create an additional 90 jobs through the expansion of its existing operation in Letterkenny; and Abbott Laboratories in Donegal town, which employs 550 people, announced plans to invest £50 million with the support of IDA Ireland for the development of its operation which will secure the future of the facility. IDA is also marketing vacant facilities previously occupied by Fruit of the Loom at Raphoe.

In addition to these positive developments, the implementation of the recommendations of the Donegal employment initiative task force has been allocated to the county development board. IDA Ireland and Enterprise Ireland are participating in the work of the board. Also as part of IDA's regional agenda for the north-west region the agency has put in place a programme to encourage the development of infrastructure, skills and education in the region to enhance its attractiveness for new inward investment. Work is ongoing in the areas of roads, telecommunications and electricity as these are particular issues to be addressed.

IDA Ireland and IDB Northern Ireland have put in place a joint marketing programme for the north-west region, which includes Counties Donegal and Derry. The initiative involves the marketing of the region by overseas executives to potential investors. Some of the work to date has included the setting up of a joint database of information. Familiarisation trips for the relevant executives of IDA and IDB have also been arranged. Other areas of co-operation are being explored, including the development of a website and a cross-Border business park.

I am confident that the strategy being pursued by IDA Ireland for the north-west region will result in the creation of good and enduring employment for the Donegal and Finn valley areas.

There is very little in the Minister of State's script which will be of help to the employees of Herdmans.

We will focus on that matter.

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