Brian O'Shea (Waterford, Labour)
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I wish to share time with Deputy Wilkinson.

Séamus Pattison (Carlow-Kilkenny, Labour)
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Is that agreed? Agreed.

Brian O'Shea (Waterford, Labour)
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Wednesday, 4 May 2005 will long be remembered in the Waterford constituency as a black day. It is the day on which it was announced that 485 jobs are to be lost at Waterford Crystal's plants in Dungarvan and Kilbarry in Waterford city. Dungarvan is to sustain the most significant hit with the proposed closure of the plant. There is deep shock in Dungarvan where the workers were briefed on the restructuring package at a meeting at 10.30 a.m. Briefing of the workforce at Kilbarry took place in the afternoon.

The workers must have time to absorb fully the details of the company's proposals and, in conjunction with their union leaders, arrive at their response to very difficult circumstances. The response will provide the basis of talks with the company. Every effort must be made to protect the maximum number of jobs. The union is committed to advancing solidarity between the workers in Waterford city and Dungarvan. Those who above all others deserve our concern and support are the workers whose jobs are in danger and their families. They are the ones facing the abyss.

The Government, Enterprise Ireland, the IDA and FÁS must leave no stone unturned in seeking to minimise the number of redundancies, upskill those who become redundant and accelerate the provision of urgently required replacement jobs. Too often in the past in circumstances of closure or redundancies all the right words have been spoken by those in power on the alleviation of pain, suffering and dramatic reductions in income and quality of life for those who lose jobs, but kind words do not put food on the table or pay the bills. The Minister for Enterprise, Trade and Employment must convince the House that his words are not idle, but are indicative of a deep commitment to making a difference to the lives of the victims of today's announcement.

Dungarvan and Waterford crystal plants produce a world-class product which, over many years, has commanded a premium price, especially in the USA market. The company describes its task as clear and its challenge as great. The problems of people with up to 30 years service who face redundancy and their families are grave indeed. While of some assistance, words of sympathy and sadness to the workers of Waterford Crystal are no substitute for effective action. The loss of the Waterford Crystal plant is a devastating prospect for Dungarvan and west Waterford. An initial gesture of goodwill by the Government should be the immediate establishment of an advance office of Ordnance Survey Ireland in Dungarvan to ensure that full decentralisation of the agency is completed without further unnecessary delay. It is one measure which would be of significant assistance to the economy of the county town.

There are many heavy hearts in Dungarvan, west, mid and east Waterford and Waterford city tonight and a very dismal future appears to face many in the constituency. FÁS and Waterford Institute of Technology have potentially significant roles to play in the upskilling and retraining of staff. The investment agencies have significant roles to play to secure investment and jobs and support existing employment. Undoubtedly, today's events have highlighted problems of trust in industrial relations at Waterford Crystal which are in nobody's long or even short-term interests. There are difficult days ahead for everyone involved, all of whom must work with the objective of ensuring that every possible job at Waterford Crystal is retained. I call on the Minister to make an absolute effort in this regard.

Ollie Wilkinson (Waterford, Fianna Fail)
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I thank Deputy O'Shea for affording me the opportunity to say a few words on a black and dismal day for our part of west Waterford. Waterford Crystal is not alone a great Waterford industry, but has been a flagship Irish concern recognised throughout the world for the production of an amazing product. The company's workers were highly skilled and the industry provided tremendous employment over many years. While we have been aware for some time that all was not well in Waterford Crystal, when the news broke yesterday there was great shock that a company which had seemed invincible was in serious trouble. I can only hope the restructuring in the industry will ensure the company again becomes viable and can recover its former glory.

I have no doubt the Minister and job creating agencies will respond to my request to take a serious look at Dungarvan. County Waterford is a vibrant place which has sustained a significant shock. I ask the Minister and job creating agencies to work together to ensure the great workers involved are provided with employment which compensates them for what they have lost.

Eamon Ryan (Dublin South, Green Party)
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I wish to share time with Deputy Morgan.

Séamus Pattison (Carlow-Kilkenny, Labour)
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Is that agreed? Agreed.

Eamon Ryan (Dublin South, Green Party)
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I join my colleagues from Waterford in expressing the condolences of the Green Party to the workers of Waterford Crystal. It must be a bleak and difficult night in the town of Dungarvan, which I know well, with the future looking much more precarious and uncertain.

A company operating in international markets is subject to the vagaries of international forces and there is no doubt that recent exchange rate changes have put significant pressure on Waterford Crystal. We must view this unfortunate turn of events for the company as a symbol of developments across the country over the last 15 years. It was interesting to read the Enterprise Strategy Review Group report on the performance of the Irish economy and the fantastic growth the Government has celebrated which was published last summer. While the exports of foreign direct investment companies increased dramatically, the graph depicting the exports of goods manufactured by indigenous firms had remained completely static.

Since the report was published, we have seen a dramatic reversal in the fortunes of indigenous manufacturing companies. The Government and Dáil should be very concerned. While we are told by economic commentators and Members on the opposite benches that all is well and that we have service industries, extensive building in a boom period and a small number of very profitable foreign companies, a balanced, stable long-term future requires indigenous companies like Waterford Crystal.

Through the skilled hands of its workers, indigenous crafts and its marketing staff, Waterford Crystal was able to perform at the highest level internationally. It is noticeable that there are now very few Irish companies producing manufactured products which stand on the world stage. Waterford Crystal was one of the last and its difficulties are a sign that Irish manufacturing is in trouble. Rather than brush the matter aside and suggest we will be sustained by the service and construction industries and a small number of multinational companies, the Government should heed the warning that a flagship company is in trouble. It is a mere symbol of very significant losses of manufacturing jobs over the last 15 years, especially in recent times. I have heard nothing from the Government as to how it intends to address the problem.

As well as looking for solutions in the short term or immediate locality of Waterford for the workers of Waterford Crystal, I am also concerned to hear what the Government plans to do on a broad basis across the economy.

Arthur Morgan (Louth, Sinn Fein)
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I thank Deputy Eamon Ryan for sharing time. I agree with the comments of the three previous speakers. My message is one of solidarity with the workers in Waterford Crystal, both in Dungarvan and Waterford city. These workers have been dumped disgracefully by the management of Waterford-Wedgewood. The jobs and massive salaries of top management are to be preserved and protected, while working people with their families and communities are to be sacrificed. Previous speakers were correct in describing Waterford Crystal as a flagship industry for the south east and for Ireland, but the loss of so many jobs and the down-sizing of its operations further undermine the company and its brand.

I know from workers in the factory that they regard the proposed redundancy package as totally inadequate. It was presented as a fait accompli and adds insult to injury. It is certainly not fair recompense for the loss of jobs and the long service by most of the workers who are being let go. I call on the management to negotiate a proper redundancy package with the work force immediately. Reported falls in sales in the US and the euro-dollar exchange rate have adversely affected the company, but workers have raised serious questions about the management of the business, including over-dependence on the US market and the purchase of ailing ceramic firms in England and Germany.

Successive Governments have lionised the likes of Tony O'Reilly, the non-executive chairman of Waterford-Wedgewood. They have fostered a corporate culture which can freely dump working people like this at will. I call on the Minister for Enterprise, Trade and Employment to intervene, but not with yet another useless task force. The Government spawned numerous task forces in areas where jobs have been lost in the past, but most of these simply turned out to be PR exercises.

The Minister should ensure, first, that a proper redundancy package is negotiated. Second, he should explore ways to preserve the skills of the workforce and to establish local enterprises or co-operatives that will keep people in employment.

Tony Killeen (Clare, Fianna Fail)
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I thank the Deputies for raising these matters. The difficulties being experienced by Waterford Crystal have been well known for some time. In summary, difficulties in the marketplace combined with a weak dollar have been putting pressure on the company's sales targets and competitiveness. Enterprise Ireland has continued to work with the company, including a recent investment approved in 2003, which was designed to assist the company in reducing its cost base, increase home sales and maintain employment. Nevertheless, the announcement by the company of job losses of this magnitude is regrettable and my concerns are particularly for those who will lose their jobs.

The overall Waterford Group has announced a restructuring programme, which, I understand, is designed to reduce excess capacity and overheads and improve manufacturing efficiency across the group. The group intends to restructure its business fundamentally in order to ensure its long-term future. The combined effect of these restructuring actions will be to reduce the number of people employed across the group by 1,785. This figure includes 485 at Waterford Crystal.

As regards Waterford Crystal, I understand that a minimum cost reduction of €25 million is required to ensure the company returns to profitability. The company has said that its current sales volume cannot sustain two viable manufacturing plants. As a result, manufacturing operations will have to be consolidated into one plant and the company has decided to close its Dungarvan plant.

There is the further problem that, at present, the company is manufacturing ranges of products which are generating insufficient margins to justify the continuation of their manufacture in Ireland.

I understand that the company intends to transfer 76% of the current Dungarvan output to its Kilbarry site. A total of €6.8 million is to be invested in the Kilbarry site, enhancing facilities there and also improving its competitiveness. The cost base throughout the business will continue to be reduced with the planned reduction in staff levels being achieved through changes in the company's business model.

At present, the company has 1,456 employees of which 485 will be leaving and 971 remaining. The company will be meeting with employees' representatives over the coming days to engage in the detail of the restructuring programme. I understand that the redundancy terms on offer will be six weeks per year of service, inclusive of statutory entitlements, up to a maximum of two years' pay.

FÁS has been in contact with the company regarding the current developments and will have a full range of supports available for redundant staff. I understand that FÁS will follow up by meeting the company at the earliest opportunity to discuss these interventions.

The industrial development agencies will be making every effort to secure alternative employment for the area. I do not consider that the establishment of a task force is appropriate. The county development board is best placed to oversee and co-ordinate the industrial needs of the area, and a task force would only add another layer to this process.

The Government's strategy for the south-east region is to promote the development of Waterford city as a gateway location with which to attract industry to the city and the region. There has also been success in attracting new knowledge-based industries with the location in Waterford of Sun Life Corporation, AOL and Genzyme. In addition, there is a strong indigenous presence with companies such as Dawn Meats and Radley Engineering.

Enterprise Ireland has invested over €9 million in indigenous enterprise in Waterford over the last three years alone. Employment in IDA Ireland supported companies in 2003 in Waterford had increased by 30.4% since 1997 and by 7.9% over the 2002 employment figures. Employment in Waterford is concentrated on the pharmaceutical, medical technology and engineering sectors, which account for 85% of employment. New projects and expansions announced by IDA Ireland client companies include Ubiqus, ABB Transformers, Biopin and AOL.

As regards indigenous industry specifically, Enterprise Ireland activity is focused on the creation of new jobs through supporting entrepreneurs in setting up new high potential start-up companies, the retention and creation of new jobs in existing companies and in enhancing the innovation capability of Ireland at a national and regional level through support of research in companies and third level institutions.

Enterprise Ireland is continuing to work with companies in its portfolio to assist them in growing their sales and exports and to improve innovation in order that they can compete on world markets.

In the last few years Irish manufacturing firms, particularly in the more traditional sectors, have operated against a backdrop of significantly declining external demand, downward price pressure, and an increasingly competitive international environment — for example, from China as well as central and eastern Europe — together with upward pressure on costs and the strengthening of the euro against our key trading partners' currencies.

Despite these pressures experienced in some manufacturing sectors, total unemployment in Ireland remains relatively low at 4.4%, down from 4.6% for the same period last year. Economic growth is forecast at 4.5% for 2005. Furthermore the projected growth rates for the United Kingdom and the United States are promising for the Irish economy as we continue to trade and also to compete successfully for high quality jobs.

The sustainability of employment levels in Enterprise lreland client companies, operating in both manufacturing and internationally traded services, is heavily tied to the sustainability of their competitiveness both in terms of delivering products and services in Ireland and in export markets.

The enterprise strategy group, chaired by Mr. Eoin O'Driscoll, last year published its report Ahead of the Curve — Ireland's Place in the Global Economy. This provided a blueprint for the actions that need to be taken to secure and build on Ireland's position as a developed economy. It clearly focused on the need to accelerate the development and internationalisation of the Irish-owned business sector as a priority for future economic development. Following Government consideration of this report, the Minister published the enterprise strategy group's action plan, which specifically detailed actions for implementation across a range of Departments. In particular, the Minister asked Enterprise Ireland to creatively rethink how best to help business as we deliver on the ESG recommendations.

Earlier today, the Minister for Enterprise, Trade and Employment launched Enterprise Ireland's strategy 2005-07. Entitled Transforming Irish Industry, the strategy is focused on implementing the recommendations of the enterprise strategy group's action plan to accelerate the development and internationalisation of Irish-owned business. The Minister also launched a new €20 million productivity improvement fund for Irish industry.

Announcing the new strategy, the Minister said Enterprise Ireland's new strategy clearly represents a major change in approach. It will make a substantial contribution to the further internationalisation of Irish companies in an increasingly knowledge driven global economy. Transforming Irish industry is a significant challenge in the context of globalisation and increased competition.

The reality is that Ireland is at a turning point in its economic development where the low-cost model is no longer an option. If we are to succeed, Irish companies must increasingly compete through innovation, superior market knowledge and a relentless focus on productivity gains and increased automation. In addition, to be successful, companies need to be outward looking in their development strategies and this is where Enterprise Ireland can add real value by partnering with business to harness the inherent development opportunities that global markets offer.

Enterprise Ireland has undertaken a complete business process and organisational re-engineering of its overseas and marketing supports with a clear focus on client need linked with a performance driven mission. Enterprise Ireland will be taking initiatives to underpin future performance of Irish industry making it central to industrial policy going forward.

The Government's decentralisation programme, announced in budget 2004, will see the transfer of 210 jobs to Dungarvan, adding a considerable economic stimulus to the town. Initial data from the central applications facility indicate that while 15 staff of Ordnance Survey Ireland have applied to decentralise to Dungarvan, there are a further 47 expressions of interest by civil servants in decentralising to the OSI in Dungarvan.

As regards property acquisition, I understand from the Office of Public Works that it has chosen a site for the decentralisation project in Dungarvan and details of the deal are being finalised with the land owner.

The overall decentralisation programme is being overseen by a decentralisation implementation group, which published a list of early movers in November last. While this list, accepted by the Government, did not include Ordnance Survey Ireland, all organisations, not just those identified as early movers, have been requested to review their individual implementation plans having regard to a range of matters including information on property, applications on the central applications facility, and previous reports of the decentralisation implementation group. In its next report the decentralisation implementation group will deal with locations and organisations not covered in its November report. I am satisfied the combined efforts of the State agencies and local business and entrepreneurs will serve to lessen the impact of the job losses and provide positive future employment opportunities for the Waterford region.