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Seanad Éireann díospóireacht -
Wednesday, 2 May 2001

Vol. 166 No. 8

Adjournment Matters. - Factory Closures.

I welcome the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Treacy, to the House to listen to the raising of a very important matter in my constituency, that is, the announcement by GMX last week of the decision to close its Thurles plant with the loss of over 200 jobs after a period of ten years in the town. The Minister of State is possibly aware from media reports that the location of GMX in Thurles followed the devastating closure of the sugar factory and the need to generate employment in the area. Indeed, the coming to Thurles of that factory was very much welcomed.

While there have been rumours and indications in recent weeks that all was not well at the GMX plant, the announcement came like the announce ment of a death in the family. There is shock and trauma in Thurles not only because of the loss of jobs and the immediate difficulties faced by so many who worked there but also because there is a realisation in the towns of the midlands, including north Tipperary, of the immense difficulty of finding replacement industry when a factory such as GMX closes.

The people of Thurles will be well aware of the trauma faced by former workers in the Offray plant in Roscrea which closed around this time two years ago. Despite all the efforts of the IDA and Shannon Development there has been no success in finding a replacement for that plant and there is not great optimism in Thurles that there will be positive news in relation to GMX either. What has happened in Roscrea, and is expected to happen in Thurles, is a dispersal of the workforce and I do not have to spell out the implications for the local economy of a town of this size, both socially and financially, when a major employer closes down.

A number of proposals have been made and we, the members of the local authority, discussed them on Monday of this week. There is a need to establish a task force with teeth, with a clear focus of intent and the clear objective to go where necessary to find and attract a replacement industry. There is also need for recognition that Thurles, Roscrea and all the towns of north Tipperary, which are currently included in the southern and eastern region for the purposes of regional status, correctly belong in the BMW region. It is that region which will receive tax incentives or supports necessary to maintain employment and meet disadvantage. In relation to our economic status and per capita wealth, it would be more correct to place north Tipperary with the Counties of Offaly and Laois. We are very concerned that the inclusion of north Tipperary in the southern and eastern region will work to our disadvantage in attracting new investment.

It is extraordinary that despite the unprecedented level of inward investment and employment growth, we are not seeing the benefits in our county. Expansion and inward investment are not taking place and we are left vulnerable when the winds of globalisation blow and factories like GMX and Offray suffer.

We hope that this is not a disease which will spread further. We want to see the establishment of the task force outlined and recognition that Thurles is a hub, considering the location of a third level college there, the Tipperary Institute, the availability of state-of-the-art broadband technology, its situation on the country's main railway line and the availability of a workforce. We want to know that the Government is taking seriously the difficulties faced by the towns of north Tipperary, particularly Roscrea and Thurles. We want to know that there is a definitive timescale in place. We also want to know if it is the Minister's intention to visit the town to hear from the people and to roll out an objective set of tasks and a legitimate plan to restore Thurles to economic health and optimism to the area.

I thank the Senator for raising this matter on the Adjournment. My Government colleague, the Minister for Defence, Deputy Michael Smith, and I fully share her concern and disappointment over the decision last week by GMX to close its Thurles plant. We are very conscious of the effect its closure will have on employment in the Thurles area and, most immediately, the employees concerned.

GMX Limited employs approximately 230 people in the manufacture of a range of domestic appliances, motors and electromechanical components at its Thurles facility. The company established operations in 1989 following the demise of the Irish Sugar Company's processing facility in the town. At the time it was owned by Moulinex SA of France, Glen Dimplex Limited and Greencore plc. The other shareholdings have since been acquired by the French company, which is now the sole owner. In 1991, the company took over the Krups factory in Limerick city.

On several occasions since the company was established various initiatives were undertaken to broaden the range of products and invest in new technology in order to underpin and consolidate the operation in Thurles. These changes were supported by Shannon Development and resulted in a reorientation of the company's output away from component production to a focus on domestic appliances. Employment grew to a total of 350 staff at its peak.

Despite these successes, however, in 1998, Moulinex decided to rationalise its production facilities and relocate some production lines to France. Later that year, as a result of the collapse of the group's Russian market and stagnation in the United States and South American markets, significant overcapacity arose. Moulinex then decided that it was no longer viable to maintain both the Limerick and Thurles facilities. The Thurles plant was chosen as the site for centralised production in Ireland and this safeguarded, for the time being, the jobs at the GMX plant.

The parent company has, unfortunately, been forced to undertake another rationalisation programme. It is incurring continuing losses and now has extensive overcapacity worldwide. Moulinex merged with another company, Brandt, last year and that company also had a large number of plants. The group employs 21,000 people worldwide and its current rationalisation plan proposes to make 4,000 persons redundant and close four plants, including, sadly, the one in Thurles. The production in Thurles will be transferred to other centres within the group in both France and Spain.

On Monday, following the closure announcement, my Government colleague, the Minister for Defence, Deputy Michael Smith, flew to Paris to meet the French parent company to discuss the closure. He secured commitments from Moulinex Brandt that the total closure of the Thurles plant will not happen before 31 December next. It was also agreed that there would be full co-operation on a skills audit of the workforce, a technical audit of the premises and equipment and, most importantly, helping the workforce to secure alternative employment.

Despite this blow to the area, we are heartened that the employment position in north Tipperary is positive. Employment in IDA companies has risen from 740 to 1,106 in the last decade. The most significant project was in respect of Procter and Gamble in Nenagh in 1999 where an additional 250 jobs were created, bringing its employment total to approximately 580 people. The numbers registered as unemployed in north Tipperary as a whole declined from 2,419 in 1999 to 2,103 last year. The unemployment figures for Thurles showed a decline from 1,105 to 937.

In addition, a welcome infrastructural initiative is the new £2.2 million Tipperary Technology Park project being developed by Shannon Development, which was launched last year and is due for completion later this year. It is a state-of-the-art technology centre and will ensure north Tipperary, Thurles in particular, has the capacity to meet the needs of the developing knowledge economy. The new technology park will support the development of indigenous high technology enterprise in the region.

When completed, the technology park will incorporate over 20,000 square feet of high quality office space, serviced with a state-of-the-art telecommunications network and other facilities geared specifically towards businesses in the high growth knowledge-based services sector. The type of business targeted will include software, multimedia and e-commerce related activities. As well as providing incubation space and support facilities for new and growing businesses, the new park will incorporate other serviced accommodation which will also meet the needs of international investment.

Another welcome development in the town of Thurles was the establishment by the Government of the Tipperary Rural Business Development Institute, which began offering courses in the academic year 1997-98. Enterprise Ireland is supporting the institute in the development of courses and programmes in sustainable rural development, SME development and information and communications technology. Recognising the potential of the new institute to contribute to economic and enterprise development in the Tipperary area, a joint working group of Shannon Development and institute personnel was established to work out strategies and action programmes.

Following the announcement of the closure, my departmental colleague, the Tánaiste, Deputy Harney, decided to establish a special inter-agency task force. This group will examine and respond to the needs of the Thurles workers and examine ways for further action on job creation in the area. It will be chaired by Shannon Development and include representative of the IDA, FÁS and the county enterprise board. The terms of reference for the new task force will be to secure alternative job creating enterprise, both from overseas and indigenous investors, for Thurles; to provide an immediate skills assessment and suitable training opportunities for affected workers; and to provide the necessary information and assistance for any employees who may wish to establish their own enterprises.

The Tánaiste, the Minister for Defence, Deputy Michael Smith and the Government are totally committed to ensuring job creation in the Thurles area is a high priority. We are optimistic that Thurles will recover from this setback in the immediate years ahead.

I thank the Minister of State for his response. Are the chamber of commerce in Thurles and the local authority included in the inter-agency task force and, if not, why not?

While I will bring that matter to the attention of the Tánaiste and recommend that they be included, I cannot give a guarantee. The final decision will rest with the Tánaiste. I am sure that if the Senator had a word with the Minister for Defence, Deputy Michael Smith, it would also help. I will ascertain if they can be included.

I thank the Minister of State.

The Seanad adjourned at 8.50 p.m. until 10.30 a.m. on Thursday, 3 May 2001.

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