I move:
That Seanad Éireann hereby approves of:
Control of Imports (Quota No. 54) (Pneumatic Tyres) Order, 1967.
Control of Imports Order, 1967.
An explanatory memorandum has been circulated to Senators giving particulars of the Quota Order approval of which is now being sought.
Under the terms of the Free Trade Area Agreement between this country and the United Kingdom it was necessary to remove as from 1st July, 1966, quota restrictions on imports of motor tyres from the United Kingdom. Quota restrictions, on imports of tyres from other sources were removed at the same time. After the removal of the restrictions, imports, which had been running at about 4,500 tyres per month, increased considerably. In the six months July to December, 1966, imports from the United Kingdom alone averaged 15,400 tyres per month. These imports caused serious loss of production at the Dunlop factory in Cork and a number of workers lost their employment. Had imports been allowed to continue at the same level, further unemployment at the Cork factory would have been inevitable.
Following discussions with the Board of Trade it was agreed, in accordance with the provisions of Article 19 of the Free Trade Area Agreement, that quota restrictions should be imposed on the importation of tyres from the United Kingdom, for a temporary period. The size of the quota was agreed, in consultation with the British Board of Trade, at an annual level of 65,000 tyres. The first quota period was fixed at six months ending on 31st December, 1967. This quota provides reasonable protection for the Irish product.
Under the terms of the trade agreement the period during which such restrictions may be maintained is limited to 18 months, unless the other party agrees otherwise. The company, therefore, are aware that they have a limited period within which to reorganise their industry so as to make their tyres competitive with imported tyres. I am aware that the company are making every effort to this end.
I might add for the information of Members that tyres were being imported from other sources as well as the UK. In the case of such imports, mum specific duty of £3 per tyre was imposed. It would of course, have been pointless to restrict imports from the UK if imports from other sources were permitted without restraint.
The Minister has said enough to justify the action he has taken and I do not think anyone in this House will dissent from it. He has not said enough, however, to alleviate the anxieties many people will feel that a situation should have arisen of this kind. His expression of satisfaction that the company has taken appropriate action is not sufficient to relieve our worries that this should have happened. He has not given any indication of the reason for it. The only indication he has given elsewhere is a negative one—an assurance that it is not because of dumping. In other words, the inflow of imported tyres is not due to dumping but to fair and free competition from another tyre factory situated within this country, using the word "country" as including Northern Ireland, as I think we are entitled to.
This raises the question as to why this situation should have arisen. Irish industry has had many warnings of the freeing of trade. Many firms have taken steps to adopt themselves. I should like to know why in this instance the inflow of tyres was on such a scale. The Minister has said it was fair competition. We have not been told what the scale of imports was in terms of its relationship to the output of the industry. Therefore were reports that a six months supply of tyres in terms of the home market came in in a short period. The Minister has not told us what is the total size of the Irish market for tyres, and what proportion of this market this sudden inflow of imports represents? Is it a fact that something like a half-year's supply came in in a relatively short period and if so why did this happen? How can it be that a firm of this kind was so ill-prepared for the freeing of trade as to get itself into such an uncompetitive position that overnight they allegedly lost half the home market in conditions of fair competition from instead of quota restrictions a mini-another factory in the same country, and without dumping?
That is the position as it has been put to us in the other House by the Minister. I do not think the Minister can stand back and simply say he is satisfied something is being done about it. We need to know more about it, and what is being done about it. The employment of quite a number of workers is at stake here. It is quite unsatisfactory that they should be left in the position of a temporary reprieve of 18 months with no assurance that at the end of that time the steps that apparently have not been taken over a long period will be taken so effectively as to protect their employment. I am speaking as someone who has no direct knowledge of this subject. I do not know other than what I have heard from the Minister, what the position is or why this should be happening, but I think the House is entitled to be given the information the Minister has as to why this has happened and the grounds for his assurance that a situation which became so bad overnight after many years of warning to the trade will apparently in his view be retrieved within 18 months by belated action.
Could he tell us, has this firm received adaptation grants to assist it to adopt? If so, when and on what scale? And if these grants were received and measures of modernisation were taken, how is it that so little has been achieved? If no adaptation grants were sought or received is the firm now modernising and is it getting assistance for this purpose? I think we need to know the answers to those questions. It is true that whatever the answers may be we will certainly support this Order which is necessary to help the situation for the time being but I think we need assurance of what the long-term position will be.
The whole question of free trade is, of course, a controversial one. What needs to be said and said again is that our choice is not, as some people have tried to make out, between the freeing of trade on the one hand and staying as we are, on the other—which is the clear implication of many speeches that are made on this subject. The choice we have, if Britain joins the EEC at any time in the next five or seven years —this is more than likely to happen at some stage in that period—is going to be at that point between staying outside, losing access to the British market, and threatening the employment of 30,000 workers employed in the export trade, or alternatively going in and accepting the extra competition which will certainly threaten the employment of some of our workers but which would affect a tiny fraction of the number that would be threatened directly if we stayed out. This needs to be said and said repeatedly. It is clear that there are people with some delusion in their minds that we have a choice of carrying on in the future as we have been doing in the past; that for some mysterious reason the workings of Providence will ensure that when Britain joins the EEC the common external tariffs will be waived for the Irish because they are decent people and that our goods will continue to receive free access to that market. Anybody who propagates that delusion among Irish people is doing them no service but is impeding the process of preparation and is helping to threaten the employment of our people in the future by reducing pressures for adaptation to meet this situation. This needs to be said because these delusions have been fostered and many of the things that have been said on the subject of this very factory seem to be based on this delusion.
An Leas-Chathaoirleach
I think it is sufficient for the Senator to say it once on this particular motion.
I had not proposed to say it any further. I would like answers to the questions I have posed to the Minister and to know the grounds for the confidence he expresses that this problem will be remedied within the period of 18 months and whether in fact if it is not remedied at the end of 18 months there is any further action we can take in the matter.
I notice that a minimum duty of £3 per tyre has been imposed on goods coming from countries other than Britain. How does this fit in with our GATT obligations? Is this something we can do because we are not fully in GATT yet? Does it come under a balance of payments clause or what is the position as regards GATT, because this involves an increase in the level of duty and many of our duties we have bound ourselves not to increase under the terms of GATT. I think we should have some explanation on that point.
I shall not oppose the motion but I must say that I am disappointed by the situation which developed in Cork and which has been partly rectified by this order. I say partly rectified because the fact of the matter is that some workers have already lost their employment and anything we do here now cannot rectify that situation. They have already lost their jobs arising out of the Free Trade Agreement with Britain. Later this afternoon we will be discussing a Redundancy Bill which flows and which should have flowed from the Free Trade Agreement, belatedly as I will be saying under that measure.
However, here we have a situation which developed of a protected private enterprise operating here with a protective market. The Free Trade Agreement I think was signed in 1965 and 12 months afterwards they apparently are taken so completely by surprise that they are undercut by the British tyres and tyres from other countries coming in and have to throw out of employment some of their workers. It is a disgraceful situation. A firm that has been operating here for years, pampered, with market reserved to them and a year after the Free Trade Agreement we have the situation that they are so completely unprepared that they have to throw out of employment workers and the Minister has to then step in and give, as it is pointed out here, a stay of execution for other people for 12 months from the end of this year. Have we any guarantee that at the end of that period more workers in Dunlops will not be thrown out of employment? Are we protecting this industry just to leave it tick over and then have another situation in January, 1969, where more workers in Cork will be thrown out of their employment?
Of course, it is not their fault and let us be clear about that. They are employees, they are workers. They do not control the management of the organisation. They fight their own corner which they should do but this is a situation where, due to no fault of their own, they have been thrown out of employment with no protection, no redundancy payment for them and for the others a possible stay of execution for another 12 months from the end of this year.
Is the Minister satisfied that this firm is, in fact, going to equip itself properly so that it will be able to stand up against the competition when this quota period expires? If not, what is he going to do about it? Are we just going to leave them carry on as they have been carrying on and allow the workers to be thrown out of employment by standing back and saying: "This is private enterprise. All we can do is hand them grants to allow them to adapt but if they do not want to do anything about adapting and protecting their workers that is all about it. They are free to carry on like that and free to throw out of employment people to whom they have an obligation"?
I would like far more assurances from the Minister as to what he envisages, what he thinks the situation will be at the end of the period covered by this quota order. Can we have some fairly firm guarantee that we will not have the same situation in Cork as we had in the past few months where people were put out of employment without compensation? Of course, the answer may be that by that time possibly we will have the Redundancy Act and they will be paid some form of lump sum as some sort of compensation for losing their jobs. That is not any satisfaction for me. I want them in employment. We, as the Oireachtas, have an obligation here. A situation has been created in which we have had those firms pampered in a way and then we find in spite of all the notice that has been given to them, when the Free Trade Agreement comes into effect, they are not equipped to deal with the situation and they have to pay off some of their workers. I am not opposing the motion but I am quite unhappy in relation to the situation which has been created by Messrs. Dunlop during the last six months.
I share the same anxiety Senator FitzGerald spoke about but only one firm is concerned. Let us be quite frank. It is a firm in which we in this country should have the greatest pride but the result of the removal of the restrictions in relation to a firm of such size, a firm which no doubt could deal with the situation and should have dealt with it is appalling.
Let us be quite blunt about this. The product is not anything like what it should be. People who can compare things in the North and South have had no doubt about this for years. I am being quite blunt about it. I know that it paid a great many people from this part of the country, when they wanted tyres, to pay duty, to go across the Border and get them. That is quite a simple fact. I have spoken to those people. Lorry owners and other people have been approaching me for the past 12 months or even longer about the quality of this rubber. It is no harm to be quite blunt about it in this House and to say that it is not up to the quality it should be and is not anything like the quality of imported tyres.
Would the Senator give details of this? What does he mean by the quality of the tyres?
I know a cattle dealer and he claims that he can get practically double the mileage in a small car on tyres he purchased in Northern Ireland. I was talking to a lorry driver the other day and he showed me two tyres. One of those tyres we shall say was foreign and one was an Irish one. They were put on at the same time but there was not a thread left on the Irish-made tyre. It is no harm to be quite blunt about this. There was not a thread on the Irish tyre but the other tyre showed very little wear.
That is a slight exaggeration.
He showed me the two tyres and he assured me that they had gone on at the same time. I discussed this with a garage proprietor but he had not any details to give me although he said: "What you said is true but we must see that the restriction goes on because we can sell more tyres." I would be very sorry that this firm could not reorganise and improve. They should have the know-how over long years of experience. I feel there has been some slackness in regard to their product over the years when people found it impossible to get second-hand tyres into the country. Anybody who comes from the Northern part of the country knows that very often farmers making trailers or a lot of handymen making trailers can get very cheap second-hand tyres in Northern Ireland but they cannot import them except under licence.
That was the position some time ago. This is the sort of thing we see very much in my part of the country. I must say I am not opposing the order but I certainly think the Minister should look seriously into the allegations I have made. I hope they are not exaggerated. I do not think they are. Perhaps a stern warning would suffice or at least the introduction of a sliding scale in regard to the quota, allowing only a certain number in now but gradually increasing unless steps are taken by the firm to improve the quality of their products.
This should be a warning to other firms in the same category that they must be able to compete in the future. This is a firm which should be exporting to the British market instead of being free of imports from it. I hope something will be done about this firm and other firms who might feel themselves still hoping to get Government protection for years to come. I think Senator Murphy has a grievance when he says that the employees are very anxious about the future. It is because of the great amount of employment that this firm is giving that probably those quotas had to be retained but it is at the very great expense of the users of their product. I do not think I wish to put the matter any further than that. It has been a matter which has been worrying me for some time and it was only right it should be raised in this House.
Senator Murphy has stated very fully and very accurately the views and the concern of the Labour Party and, indeed, the trade union movement about what has happened in this particular firm. I do not propose to take up the time of the House by repeating it. I want to ask something in the nature of a question. I think the Minister, before this order is approved by this House, should tell us precisely how much money has been paid in the form of grants, either adaptation grants, expansion grants or grants for any purpose, to this company over the past ten years. The House is entitled to know that and I would like to get that information from the Minister.
I find it disturbing—I have mentioned the point before—to discover that an industry that has been protected by Irish tariffs for over 30 years will go to the wall if those tariffs are suddenly removed or if the quota restrictions are suddenly lifted. I have always felt that the Fianna Fáil policy of the protective market should always from the beginning have been protected by a descending scale of tariffs because I argued— and I think it can still be argued— that in order to launch a new manufacturing company, it may well be necessary to impose import duties of 50 per cent or even 75 per cent for the purpose of allowing the new Irish, or Irish branch of a foreign company, to get going. But, if after six or ten years the same amount of duty was still required in order to keep that manufacturing business going, then I fear that company was inefficient since it required the same amount of protection after ten years as it had when it was an infant concern; or else, the protected people were making an excessive profit.
Unkind critics of the Government would say that the latter is the case and that Fianna Fáil have been for years continuing to allow excessive profits to be made by industries for whom, shall we say, they had a special affection. I would ask the Minister to consider which of these two explanations is the valid one for the maintenance of a degree of protection at the end of 30 years, which is equivalent to the degree of protection that was found necessary in the early years. I do not think that the same degree of protection should be necessary.
It is said by the Minister that since the quota restrictions were lifted foreign tyres came flooding in.
Foreign, from Northern Ireland?
I think foreign tyres might be said, whether they come from Northern Ireland or not. From the point of view of tyres they are regarded as foreign tyres. From the university level we regard Northern Ireland people as being 100 per cent Irish but from the point of view of industry and commerce Northern Ireland is a foreign country. I am open to correction on that and I hope the Minister will correct me if I am wrong. They are foreign produced, from the point of view of tyres.
There is an article to which I am sure the attention of Senators has been drawn. It is in Transport which is the central organ of The Transport Centre in Upper O'Connell Street. In this article on the reaction of Irish Dunlop to the Free Trade challenge it is mentioned, among other things, that since 1935, 32 years ago, the Irish Dunlop company has had what they call a virtual monopoly of the Irish market. What have they been doing with this monopoly? I am open to correction here but I think the Irish rubber plantations are small and that the raw material for these tyres has to be imported to Ireland first, as it has to be imported into Britain. I am open to correction by Senator FitzGerald on this with regard to Northern Ireland. I do not think the rubber plantations there are of any significant size, except in relation to the local politicians where the degree of flexibility is much more evident.
I would have thought rigidity would be more appropriate.
There are altering points of view and the zigging and zagging at local elections is very evident there.
The raw material for tyres is as readily available in Ireland as in the United Kingdom or France, Czechoslovakia, Israel or Japan. It is from these countries according to the article to which I have referred that the imported tyres have been pouring in—Britain, France, Czechoslovakia, Israel and Japan. Why is it that the tyres imported from these countries have any advantage over the tyres produced by the Irish Dunlop company which has had the advantage down the years? It also said in this article that the company felt "a very cold draught indeed, and the underlying fallacy of what economists called ‘the infant industry argument' was demonstarted." It is not an infant industry. It has been protected and over-protected. Mention is made of the fact that under Statutory Instrument No. 135 an increase from 12/6d. to £3 would amount to 45 per cent, which is a very big measure of protection.
It is also made apparent in this article that the radial ply tyres which are becoming popular on the Continent and throughout the world have not been available on the Irish market. Why not? Because the Irish company did not feel it was necessary for the mere Irish to have the latest developments in tyre production because the Irish company was protected, was safe, did not have to appeal to the market, did not have to satisfy the market. Suddenly they find it is so, and I feel this is an illustration of something that has gone wrong with the protective mechanism of Government policy down the years.
I feel the Government have been grossly negligent of the fact that if you continue the same rate of protection for an industry as was required in its infant years into its adult years you are softening the industry. You are removing all the advantages competition may have and you have the result that if and when quotas are raised suddenly the Irish, or Republican, tyre is found to be not perceptibly superior to the world products. This is in part the fault of the whole industry, but it is also in part the fault of Government policy which has been content to over-protect Irish industry, or Irish branches of foreign industry, irrespective of whether they were producing competitively and efficiently.
This should really be said in relation to this order: it shows up the fact that many Irish industries have been over-pampered and softened up by this Government featherbedding to such a point that they are now incapable, because of the virtual monopoly they have had, of effective competition with companies whose raw materials cost just as much. I should like to hear the Minister's comment on my contention that the Irish company should be able to compete with all the other countries despite the lifting of the quota. I am surprised to note this in the same article, and I imagine the view is correct:
Within the space of a few weeks very large quantities of tyres were imported sufficient to supply the Irish replacement market for a year.
As soon as the quota was lifted, as many non-Irish tyres were imported in a few weeks as would satisfy the Irish market demands for a year. The Minister ought to answer the question of why this is the case. Is it due to some anti-Irish spirit on the part of those who buy tyres or to the inefficiency of the Irish industry, due in no small measure to the over-protection offered to them during 32 years by the Fianna Fáil Government's policy of grossly over-protective tariffs and quotas?
This is a very clear example of the mistaken policy of Fianna Fáil as far as industrial protection is concerned. People who criticised that policy in the past were regarded as being anti-national, but we see now it was a very great mistake on the part of the Fianna Fáil Party to give unconditional protection in various spheres of our economy. Everyone was in favour of protection which would enable industries to get going; but at the stage when they had got going, the Government should have stepped in and said to them: "You are on your feet now and it is up to you to provide the consumers with the services which have developed as a result of the protection provided". Instead, the consumers were compelled during the past 30 years to pay more than the economic price for many of the goods produced by various industries because the Government did not step in to ensure that the consumer, whose money had gone towards the building up of those industries, got a fair crack of the whip when the industries were established.
We have a situation now in which employment is threatened; we have reached a stage where we had suddenly to tell a number of these protected industries that the day had come when they must become efficient, when they must increase their output per unit, where they must get themselves on a competitive basis as far as the goods and services provided by them are concerned.
This is only one example. There are several other industries which have prospered at the expense of the community as a result of the unconditional protection provided for them. We know that very high quota restrictions were applied in many cases and that also high tariff levels were imposed to give this type of protection to various industries. These industries had it so easy that they did not take the trouble to get themselves on a competitive basis to ensure they would be in a position to provide goods and services at competitive prices. They were like spoiled children. No effort was made, when the children got going, to make them realise that they must face the world and all the competition that involved.
This is a very timely warning to many other industries who will be affected as time goes on in this modern, competitive time as a result of various international trading agreements. We cannot remain as an isolated republic: we must now move in larger economic spheres. First of all we must compete in the UK economy as far as quota restrictions and tariff protection are concerned, and then we have the larger European community about which there is so much talk these days.
It is unfortunate, as some Senators have said, that this firm did not realise the day would come when they would be required to produce their goods at competitive prices. They should have taken advantage of the profits they made from the protection provided. If they did not make profits during those years when they had the opportunity to do so with the aid of so much protection and at the expense of the consumer, it is their own fault because they must have known that raw materials are the basis of costings of any goods supplied. As Senator Sheehy Skeffington has said, they should have looked around to see how to improve their materials and thus put their goods on a competitive basis.
The purpose of protection, as I understand it, is twofold only. Firstly, it enables youthful industry to develop, to get a breathing space, time to grow, to find its feet; secondly it prevents dumping. They are the only two justifications for protection. However, there is one point which most or all of the other speakers missed on this occasion: it is that the motor assembly industry here are probably the main customers of Dunlop. Therefore, that puts Dunlop in a favoured position in that it has a captive market. But the story does not end there. It is quite possible, of course, that there may have been mismanagement, but it is quite possible also that there could have been very heavy imports here for parts of the Irish motor assembly industry in which the Irish industry was working efficiently and even selling products at the same price at which they could have been bought in England.
That is a factor which has been overlooked by everybody. Cars for the Irish motor assembly industry are imported in what is called KD form, that is, knocked down. Let us assume that Dunlop's are supplying tyres at £5 each for those cars. If Volkswagen or Lincoln and Nolans decide to get in their cars without the tyres and the tyres cost £5 each here, the British Motor Corporation or the other suppliers will not knock off the full £5. They will have their profit first, and if the entire set of five tyres cost £25 they will knock off perhaps £15 or £20. The assemblers or manufacturers of parts for the motor assembly industry here may manufacture efficiently and may put out these tyres or other parts at the same price at which they are manufactured in England, but still the tyres could be imported as I have explained, knocked off by the British Motor Corporation. That is one factor which should be borne in mind.
I hold no brief for inefficiency of any kind, and I hold that any industry which is three, four or five years in existence should have as its ambition from the day it starts, whether it is protected or not, to be able to assemble, manufacture and sell to the public at the same price as the same article is sold in England. I hold no brief for Dunlops and I know nothing about them but it is quite possible that they have been working efficiently and have been endeavouring to adapt, but nonetheless you could have these imports which it would be cheaper for the Irish motor assembly industry to import than to buy from Dunlops even though the same tyres were sold on the English market at the price at which they are manufactured here because the full price would not be knocked off to the assemblers. The British Motor Corporation would take their profits first and then not knock off the full price.
Perhaps the Minister, when he is replying, could say whether Senator Nash's speculation as to what might be the cause is, in fact, the case?
I do not know if I can answer all the questions which Senators have put but I will endeavour to do so. Firstly, it should be understood that the experience is that when any quota is removed from any commodity, not just tyres, there is a considerable amount of novelty buying by the public here because of the particular articles not coming from abroad before. That is one factor. Another factor is that some of the tyres being imported are quality tyres and purport to be quality tyres and are charged for accordingly and are not in the normal way to be regarded as being strictly competitive with the products of the Dunlop company in Cork.
The size of the market here could be gauged from the fact that the quota fixed at 65,000 per annum is approximately ten per cent of the domestic market. I can understand the reaction of some Senators, and have heard the same reaction outside this House from other people, one of feeling that this firm did nothing until the day of reckoning came and its workers suddenly found their employment in jeopardy. I can understand how this impression might be in existence, but I do not think it is doing justice to the Dunlop firm in Cork, because the position is that that firm had embarked on a programme of adaptation and expansion and in that connection had sought and obtained an adaptation grant amounting to £187,500. That programme of adaptation was under way, and in consultation with the trade unions concerned, who accepted that if the firm were to become competitive a number of things had to be done, one of which was that the work force had to be reduced somewhat because the firm would not be competitive with the work force it had up to then. I have been informed, and i believe, that in the case of workers becoming redundant under that scheme of re-organisation the firm paid redundancy payments on the same basis as the workers concerned would have been entitled to if the Redundancy Bill which is coming before the House now had been in operation.
Unfortunately for everybody concerned, this scheme of re-organisation which was going on coincided with a recession during 1966 and 1967 in the market for motor vehicles not only here at home but also abroad, and this recession led to a world overproduction of tyres. The imports of tyres into this country during the late 1966 and early 1967, coupled with the loss of our exports of tyres to the EEC which we previously have had and which was only partly offset by exports to Britain, placed in jeopardy the company's ability in the short term to capture a sufficiently large share of the replacement market. Of course, it was essential that the company would be able to do this if the scheme of re-organisation and adaptation were to be carried out effectively. If we had allowed that situation to go on the company just could not have carried out this scheme of re-organisation in any planned way.
I was asked a question as to what grants had been received by the company. Apart from the adaptation grant to which I have referred, the company also received two industrial grants amounting to £250,000 but not all the total amount of these grants has been directed to the production of tyres. The figure includes a certain amount of other activities in which the company is either engaging or is proposing to engage in, and in preparation for that.
The scheme of re-organisation, adaptation and expansion to which I have referred is estimated to cost about £2 million, and already over £1 million has been spent in implementing that scheme. I am giving these figures to make it clear to the House that the picture of this firm sitting here under protection and doing nothing until the day of reckoning came is not a true picture. In fact, the firm had been engaged and is, in fact, vigorously engaged in this scheme of adaptation and organisation but for the reasons I have mentioned it was, if you like, caught short in the middle of its re-organisation programme.
The firm understands just as clearly as I do and as Members of the House do, that the relief afforded by the imposition of this quota is merely temporary. The company's plan in connection with the tyre section of its business is based on its supplying a reduced share of the expanding home market together with exports, and the plan also includes reducing the number of types of tyres at present produced. I understand that at present over 40 types of motor car tyres, and over 20 types of truck tyres are produced in Cork. It appears as though this is something that has to be reorganised.
Like Senator Cole and others, I have heard allegations made about the quality of tyres produced in Cork. Sometimes one hears a very convincing case put forward to justify this. I cannot say at the moment just what substance there may be in such allegations. I should say in all fairness to the company that the tyres which it produced at Cork were produced to British standard specifications and have been accepted throughout the Dunlop organisation for export to over 50 countries. This would seem to indicate that the quality of those tyres, within the categories supplied, are standard quality accepted in countries all over the world. It may be that the standard within which these tyres are produced is one that should be higher and that the Irish motoring public would like a higher standard of tyre but that is another question. Within the standard produced it does appear from that evidence that the company was adhering to the standard required.
Mention was made of the production by Dunlop of the radial-ply tyre. I think it was suggested that the fact that they had not produced this tyre before the difficulties about imports had arisen, indicated an attitude of mind on the part of the management of the company that they had a capital market and that they there was no obligation on them to make any effort to improve standards. Again, I think that is not doing justice to the company because I know that the radial-ply tyre which they marketed some time ago was, in fact, in course of very detailed testing and alteration over a long period before the difficulties arose about imports.
The point is that they were being tested in Irish conditions, and the tyre that has been produced is designed to suit Irish conditions which are not the same at all as the conditions which obtain on the Continent, for instance. The type of tyre required for the Continent is quite different not only because of the quality of the roads but because of the attitude of the motorists. It would appear that motorists in this country and to some extent in Britain, if they have to choose between long-lasting tyres and tyres which are easier on their seats, prefer the soft seat. Therefore, the quality of the tyre required for our market is not the kind that will sell particularly well on the Continent.
What is the evidence for that statement about the preference of the Irish public? They seemed to choose the opposite as soon as they were given a chance.
What they chose was the quality which would give them the best of both worlds in regard to being long lasting and having soft seats.
Precisely. Therefore, they want long-lasting comfortable tyres and they were not given them.
My point is that the tyre produced by the Dunlop company here is specifically designed and tested for the Irish market. The tyres which were imported were not. The suggestion that the company did not do anything about this until difficulties arose is wrong. In fact, the company was extensively testing this radial-ply tyre for Irish conditions for a long time back.
I may mention incidentally that so far as the Irish customer is concerned, in cases where Dunlop did not produce radial-ply tyres of a certain size, even though they may produce that size in the conventional tyres, we give a licence for the importation of such tyres free of duty.
A suggestion was made that we have allowed industries here to grow fat and not make any effort to scale down their protection, and that, therefore, really the cause of the trouble lies at the feet of the Government. I do not want to embark on an exposition of the historical attitude of Fianna Fáil to industrial protection, but I do not think I could let some of the statements made pass entirely without comment. I would remind Senators that if we had not pursued the policy which we did pursue we would have virtually no Irish industry. We would have nothing to bring into the Common Market and we would have no hope of getting into the Common Market. Our people would have far less employment than at present and there would be no prospects of future employment.
No one challenged the policy of protection.
Senator Rooney challenged it.
Unconditional protection.
Senator Rooney suggested that that whole policy was wrong. The next suggestion made was that we should have scaled down protection. I want to point out that we have been scaling down protection for quite some time.
Fifteen years too late.
Scaling down protection very often means that you create difficulties for firms. It means unemployment in some cases, not in all. The moment that happens the very people who were criticising us about this get up to talk about how we were neglecting the workers concerned.
In the case of Dunlop, it became quite clear to the management and the trade unions concerned that if Dunlop were to be competitive, a number of workers involved in the scale of operations which then existed would have to be reduced. This was done and the additional redundancy which might have taken place would, in fact, have taken place if we had not imposed this quota order. The question of whether these industries are going to survive or not depends, as I have said on many occasions, largely on the management but also on the workers. I want to agree with and re-emphasise the point made by Senator FitzGerald that it is merely deluding ourselves to suggest that we have a choice between high protection and free trade. Whether we have a free trade agreement with Britain, whether we are in the Common Market or not, if this country is to survive economically it must survive in free trade conditions because the people with whom we will be dealing will be operating in free trade, conditions and we, more than any other country in the world, I think, are dependent on foreign trade. Therefore, it is quite unrealistic to suggest that we can exist with high protection. We must face up to the realities involved in bringing down protection and we have been doing this on a gradual scale to give both our managements and our workers an opportunity to adjust gradually to the change over.
Dunlops, in fact, could be taken as a case in point. The House could not have been aware of some of the facts I have mentioned but I trust that Senators will be aware now that, in fact, Dunlops were engaged on a very large-scale adaptation programme, and that the almost fortuitous factors which intervened necessitated the imposition of this quota but that this quota is imposed only on a temporary basis, and that the adaptation scheme involved is going ahead as fast as it can be put into operation. It is no use saying on the one hand that the management is to be blamed or the Government is to be blamed because workers are losing their employment, or on the other hand that we must make firms become efficient and if they fail to become efficient that the workers are losing their employment because we do not make them become efficient, and if we do make them become efficient if it means in some cases that workers lose their employment, as it means in some cases, we must accept that that is so and if we do not do this that all the workers concerned in that particular industry will lose their jobs, not just a proportion of them.
Should not the slimming process have been gradual for the past 30 years?
That is ignoring the realities of what happened in the last 30 years including the relatively recent advent of free trade in the markets in which we deal.
That has nothing to do with the issue Senator Sheehy Skeffington is putting.
It has everything to do with it.
Should the efficiency not have increased gradually and not just be a sudden thing?
It is also a misconception to imagine that the pressures on Irish industry are only those which have appeared in the way of the rate of duty or the quotas because the Department of Industry and Commerce, where complaints were received in regard to Irish industry such as the failure of delivery dates or low quality, has consistently threatened and in some cases has actually carried out a threat of allowing duty free imports outside the quota in order to bring those Irish firms to their senses. There has been no question of giving unlimited protection to firms who could not care less about the Irish consumer.
Hear, hear.
I think it is clear to everybody now that this message is coming home. One thing Senator Rooney said with which I agree is that this whole incident should be of considerable value in bringing home to all our Irish industries, management and workers, just what is necessary and the dangers that are involved unless we adapt to free trade.
Senator G. FitzGerald asked whether we are entitled to do what we did here, increasing the duties on tyres from third countries to £3 per tyre or whether we did it before we joined GATT. The answer is we have not agreed in our negotiations for accession to the GATT to bind this particular duty and we are, therefore, entitled to increase it if we wish.
In regard to the statement that the company are engaged on an exhaustive and intensive investigation into the production of tyres that would be suitable for home condition which would be different from the Continental conditions, do I take it that the company's intention is, once they get under way, to produce this type of tyre at a time when they expect that the company is to go into competition in the export field and will this type of tyre which is produced essentially to meet Irish conditions be an attractive proposition for export?
The testing was specifically for Irish conditions but if it is suitable for Irish conditions it will also be suitable for most of the conditions in Britain but not on the Continent, but the export envisaged would be to Britain rather than the Continent. They have been to the Continent but the changes in the Common Market resulted in the closure of that market for our tyres.
Question put and agreed to.