Vol. 558 No. 6
8 Mr. Hogan asked the Tánaiste and Minister for Enterprise, Trade and Employment the action she will take to ensure a company (details supplied) continues to trade at Castlecomer, County Kilkenny and Bunbeg, County Donegal; and if she will make a statement on the matter. [25105/02]
On 28 November 2002, the company announced the closure of its manufacturing unit at Castlecomer with the loss of 160 jobs. However, the Castlecomer operation will continue to provide work for about 20 employees who will operate the group's accounts, sales and administration centre which handles the distribution of products for both its Asian and European activities. There is a possibility that up to 50 or 60 people could be re-employed in the new year. This cannot be clarified until market demand for the new season is established in January 2003.
The future of the plant at Bunbeg remains in question pending the outcome of further negotiations.
The company has endured extensive short-time working this year and has concluded that there is not a sufficient volume of business to sustain two plants. Also, increased manufacturing costs are putting the company at a further disadvantage.
The company specialises in wool/polyester stretch yarns for use in fabrics. However, in recent times retailers have turned increasingly to cheaper products as a means of generating better revenue. The company has tried to develop new products but their efforts have proved insufficient to date, resulting in the closure announcement last Thursday.
Every effort is now being made to keep the Donegal plant in business. The managing director met with the workforce on 29 November 2002 and a further meeting is scheduled for 6 December 2002.
I am sorry 160 workers have been laid off in Castlecomer. There has been criticism of the fact that a meeting arranged with the Tánaiste to discuss a viability plan before the announcement was made did not take place. It had been hoped that management, unions and public representatives could have examined the possibility of keeping the firm in operation and maintaining the 160 jobs.
Was a viable alternative to closure mentioned in the Tánaiste's discussions with the management of the company? I was disappointed that she made no mention of a task force in her reply to the matter I raised on the Adjournment last week. Will she agree to establish a task force in Castlecomer, where employment is needed? Is there a different form of funding, directly or indirectly, by Údarás na Gaeltachta, in respect of the plant in Bunbeg?
The meeting did not take place at the time suggested because management had not informed the workers of their plans so it would have been an unreal meeting. It is not the job of a Minister, or indeed a journalist, to tell workers what their future is. Too many workers have heard their fate on radio or television programmes.
The Minister has misinterpreted the motive of the meeting.
Mr. Brooks came to see me with Mr. Dan Flinter. The company's problem is one of working capital. We are prohibited by law from giving companies assistance with working capital so help was not a possibility.
The situation in Bunbeg is by no means certain. The survival of that plant depends on a number of matters, waiving the rent for three or four years because the company does not own the building; reduction in the cost base through wage reduction and cost savings; closure of the Castlecomer plant; and the agreement of Ulster Bank which is owed approximately €13 million. These requirements would have to be met before we could be satisfied that the plant can stay in operation. The waiving of the rent would be in contravention of EU guidelines so that is probably not a runner.
Would the Minister agree to the establishment of a task force for Comerama in view of its significant contribution to employment in north Kilkenny and the fact that there is little other employment in the same area? Who owns the factory in Bunbeg? Is it being given rent free? The Minister mentioned that there might be some rent subsidy possibilities in respect of Bunbeg and that there might be some other assistance given through Údarás na Gaeltachta that would not be available to Comerama in Castlecomer. Will she clarify those issues?
I have agreed to meet the Deputies and worker representatives next week and I think we can discuss issues such as an interagency task force at that point. I would like to reflect on it. What was the Deputy's second question?
Is there some financial assistance or other direct or indirect assistance being given in respect of the Bunbeg plant that is not being given to Castlecomer in terms of rent subsidy, as the Minister mentioned earlier, or in terms of free buildings, etc?
As far as the State is concerned, the issue of significance is that of waiving the rent for some years. I do not have responsibility for Údarás na Gaeltachta but my understanding is that waiving would be in contravention of guidelines on State aid. Therefore, that is probably not a possibility.
