Dáil debates
Tuesday, 22 November 2005
Adjournment Debate.
Job Losses.
9:00 pm
John Perry (Sligo-Leitrim, Fine Gael)
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Which Minister is taking this matter?
Brendan Howlin (Wexford, Labour)
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Is the Minister of State taking all matters tonight?
John Perry (Sligo-Leitrim, Fine Gael)
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With respect to the Minister of State, I am astonished. Where is the Minister for Enterprise, Trade and Employment, Deputy Martin, or the Minister of State, Deputy Killeen? Deputy Tim O'Malley holds a health portfolio. It demonstrates the arrogance of the Government that it sends a Minister of State at the Department of Health and Children in to answer on an issue where 120 jobs are being lost in Sligo. It is not good enough, it is absolutely appalling. Where are the Ministers of State, Deputies Killeen and Michael Ahern, and the Minister, Deputy Martin? This is the arrogance and intoxication by power of this Government when the people of Sligo are losing 120 jobs. I have nothing personal against the Minister of State, Deputy Tim O'Malley, but he is a Minister of State at the Department of Health and Children, not the Department of Enterprise, Trade and Employment. How can he answer me about the jobs being lost in Sligo? That is how arrogant the Government has become.
At total of 122 jobs have been lost with 60 days notice, meaning workers and their families will find themselves out of work before Christmas. It is never good to hear an employer is leaving the country but it is particularly difficult so close to Christmas. This is compounded by a Minister of State at the Department of Health and Children coming into the House to deal with an issue that falls under the remit of the Department of Enterprise, Trade and Employment.
Tractech has been based at the Finisklin industrial estate since 1984, where it manufactures mechanical parts. Employees of that plant have worked diligently. Tractech is an important employer in Sligo and yesterday's decision is a major blow to the area. It is worse that the company was bought by another company, Eaton Corporation, 12 weeks ago. Did the Minister have talks with Eaton when it acquired Tractech — I am certain he did not — and were there any conditions attached to the sale? This is a highly profitable company where the staff have been there for 20 years but the company that bought it 12 weeks ago is now pulling out. Is that allowed? This is a major employer. Perhaps the Minister for Enterprise, Trade and Employment is over with the American parent company, although I doubt it. Did he have any talks with Eaton Corporation? I doubt it.
Everything must be done to stop Tractech leaving Sligo. I am very disappointed that the Government attaches such importance to this issue that it sends in a Minister of State at the Department of Health and Children to deal with it. That says it all. It is a damning indictment of the Government's attitude to the north west and to Sligo if this continues. The Minister for Enterprise, Trade and Employment must travel to Ohio to meet Tractech's parent company, Eaton Corporation. I demand to know what he is doing about this. We were informed a task force would be set up but we do not want it. We will not be fobbed off in Sligo about this. A total of 120 jobs will be lost and this is on top of the loss of 560 jobs in Hospira, a sister company of Abbot Ireland. The Government is only able to push companies out of Ireland instead of encouraging them to stay. The Government states this is inevitable because of stacked-up costs but this is the rip-off Government. Every employer in the State is being ripped off by the Government and that is why companies are leaving.
I hope the Minister of State will tell the Minister for Enterprise, Trade and Employment that I want him in Sligo. He has a job to do because giving workers 60 days' notice is not good enough. I guarantee this issue will be raised in the House again and the Minister will have to deal with this issue. His attitude towards the House is appalling and I am not surprised these jobs are moving from Sligo given his attitude.
Marian Harkin (Sligo-Leitrim, Independent)
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I thank the Ceann Comhairle for giving me the opportunity to raise the loss of 120 jobs at Tractech in Sligo town. Unfortunately, the relevant Minister is not present and I agree with Deputy Perry that it is a scandal. This has come as a shock to the workers at Tractech and, while we all sympathise with them, they have a right to expect a great deal more than sympathy from their public representatives. The workers are not members of a union and their immediate major concern is a redundancy package. I seek a commitment from the Minister that every effort will be made to ensure workers receive their entitlements.
However, that is only the first step. What arrangements will the Minister put in place for the workers? Will a retraining package be put in place to ensure they can upskill to enable them to secure alternative employment? Has the Minister contacted Eaton Corporation, Tractech's parent company? Is he working to ensure there will no further job losses in the north west, particularly in Manorhamilton, County Leitrim?
While each job lost at Tractech impacts negatively on the lives of the workers and their families and every effort must be made to support them, it is essential to understand that this closure is happening in the wider context of globalisation. Companies can relocate anywhere in search of cheaper labour and lower costs. Parts of County Donegal have been decimated by such job losses and, unfortunately, this phenomenon is spreading nationwide. The challenge for Sligo, the north west and Ireland is to compete in the global market and this can only be met if competitive infrastructure is in place. Unfortunately, the recent transport plan gives us little cause to rejoice.
However, it is critical that the State should invest in research and development and promote innovation if we are to maintain jobs and attract new ones. I recently tabled a parliamentary question on research and development investment by the Government. Six Departments replied that only 14% of their research and development spend was devoted to the Border, midlands and west region. This is a major threat to future employment opportunities in Sligo.
We as politicians have a responsibility to bring about the conditions in which employment can be created and maintained. There is no point in complaining about companies relocating because we cannot stop them. However, the Government can invest in research and development and innovation so that Ireland can compete with India, China, eastern Europe, the US and Japan. The EU is behind the US and Japan in investment in research and development while Ireland is behind many of its European counterparts in this regard. Meanwhile, investment in the BMW region is minuscule compared with the rest of the country.
In the medium to long term, the Government has a responsibility to invest in our region and safeguard our jobs while in the immediate future it has a responsibility to support the Tractech workers. Every effort must be made to secure alternative employment.
Jimmy Devins (Sligo-Leitrim, Fianna Fail)
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I thank the Ceann Comhairle for the opportunity to contribute to the debate. Yesterday the workforce in Tractech was informed that a so-called review of the factory was ongoing and that in 60 days a decision would be made on whether the company would maintain a manufacturing base in Sligo. While no decision has been made and everybody is the town is hoping against hope that the factory will remain open, the more realistic interpretation of the announcement is that the new owners intend to move the manufacturing process from Sligo to a low cost country.
Our thoughts in the first instance must be with the employees who have this dreadful news hanging over them as we enter the Christmas period. To be put in a potential redundancy scenario at any time of the year is bad news but it is appalling when the news is received a few weeks prior to Christmas. This company was successful financially over recent years and last year it recorded a profit in excess of €3 million. However, the problem is that the company, which has operated successfully since 1983, was taken over by Eaton Corporation of America in August 2005. The company and the employees have encountered the unpalatable and unacceptable face of globalisation.
I know many of the employees and I ask the Minister for Enterprise, Trade and Employment to use his good offices to ensure every State apparatus is used to protect them. I refer to two issues in this regard. I would like the Minister to ensure IDA Ireland, in conjunction with the company, will put in place the best redundancy package should the Sligo factory close. I also ask that outplacement services should be made available to all employees, including career guidance, interview skills and business start-up advice, and that a co-ordinated effort should be put in place involving FÁS, Sligo Institute of Technology, Enterprise Ireland and the county enterprise board so that employees can be reskilled and retrained as soon as possible. It is also important that IDA Ireland should work with the company during the consultation period to ensure the impact of the closure on local suppliers and subcontractors is kept to a minimum.
Eaton Corporation has a subsidiary in Manorhamilton, County Leitrim. It is important that these jobs should be protected and secured. IDA Ireland must monitor the company and liaise with the Minister and the workforce. Enterprise Ireland must redouble its efforts to establish a high-tech cluster of businesses in Sligo with the benefit of Sligo IT's facilities, staff and graduates. Given the proximity of Sligo and Leitrim to Northern Ireland, greater focus must be put on cross-Border trade. I acknowledge new jobs were created in Sligo recently, including 300 jobs in Tucon and a similar number in Abbot Ireland. However, our thoughts must be with the employees of Tractech and the positive steps the Minister, the Government and the State agencies could take to help them at this difficult time.
Tim O'Malley (Limerick East, Progressive Democrats)
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I thank the Deputies for raising this matter. I am concerned that Tractech Ireland Limited has announced that it intends to close its Sligo operation by the end of 2006. I am conscious of the effect these job losses will have on the workers, their families and community. The company has commenced a staff consultation process and the outcome of this process will be a phased transfer of the operation outside of Ireland in 2006 with the loss of all 120 jobs in Sligo.
Tractech manufactures centrifugal clutches and traction enhancing differentials for heavy duty equipment and off-road vehicles and was established in Sligo in 1983. The company has been a steady employer of skilled fitters and engineers and has delivered consistent growth and profits. The Eaton Corporation acquired Tractech earlier this year and, while local management saw opportunities for growth arising from the new relationship, they were awaiting a clear statement from the new parent company on the strategy and direction the Sligo operation would take. Eaton considers that there is a need to consolidate operations, as there is not enough business to support the operation of multiple facilities that build similar product.
John Perry (Sligo-Leitrim, Fine Gael)
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Why did Eaton buy the company?
Tim O'Malley (Limerick East, Progressive Democrats)
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The company conducted a review of its operations at its Sligo plant, which led it to the conclusion that the business should be relocated with the resultant loss of jobs for all employees. The review was the direct result of the competitive pressure being experienced by its customers and the requirement for Tractech to continue reducing its manufacturing costs. The most likely scenario will be a phased shutdown of the Sligo operation beginning in spring 2006 with final closure by the end of the year.
FÁS will contact the company shortly and the full range of its services will be offered to the workers to retrain and upskill them if they wish. Job losses in the region are of ongoing concern and the Government is doing all in its power to create structures through its enterprise, development and training agencies which will facilitate those who have lost jobs to gain new ones that offer greater opportunity both in terms of skills and permanence.
Ireland has a predominantly modern manufacturing base which competes in a range of growth sectors. However, as with most other European countries, there are areas of activity in which Ireland's competitiveness is seriously challenged. In the main, these are in areas where the availability of lower cost locations is making cost the primary driver behind business decision making.
It is inevitable that the investment decisions of some companies will be influenced by the competitive attractions of alternative geographic locations. Our focus is firmly concentrated on managing the current transition with the best possible blend of policies to strengthen both national and firm level competitiveness.
Manufacturing has been a key driver of prosperity across the economy for many years and enterprise policies will continue to emphasise the strategic importance of the sector to future economic growth. Indeed the enterprise strategy group recognised the importance of the sector in providing a foundation of skills and technologies in which to build a high performance, high value added and technologically orientated manufacturing sector into the future.
Our objective is to ensure that our economy remains a globally competitive, profitable and secure location for business. We can best help enterprise, including the manufacturing sector, by continuing to implement policies that are pro business and by implementing the right balance of enterprise supports and at the right time to help business. When provided with the best supporting and competitive environment, business and industry will develop to capitalise on investment and growth opportunities. It is the Government's intention to enable enterprise growth by policies tailored to address the competitive pressures transforming the global economy.
A key element of the Government's strategy to help enterprise is to encourage increased levels of investment in research, business related technological development and innovation across all enterprise sectors. These increased levels will assist firms to produce improved products and services with added value. In the longer term, this approach will provide more sustainable and higher quality jobs.
Tim O'Malley (Limerick East, Progressive Democrats)
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The industrial development agencies will be making every effort to secure alternative employment for the area.
Tim O'Malley (Limerick East, Progressive Democrats)
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Is the Deputy interested in alternative employment in Sligo? I did not interrupt Deputy Perry.
John Perry (Sligo-Leitrim, Fine Gael)
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What has this got to do with Sligo?
Séamus Pattison (Carlow-Kilkenny, Labour)
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The Minister of State is allowed to speak.
Tim O'Malley (Limerick East, Progressive Democrats)
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If the Deputy is interested in alternative employment in Sligo, I am coming to that.
John Perry (Sligo-Leitrim, Fine Gael)
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There is nothing in this speech about it. How can Deputy Devins take this?
Tim O'Malley (Limerick East, Progressive Democrats)
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IDA Ireland is promoting County Sligo and the north west to potential investors on an ongoing basis and every effort is being made to secure further industry for the north west, including County Sligo, by progressing the development of a knowledge economy in order that the region can compete nationally and internationally for foreign direct investment. The agency is also working with its existing client base to expand its presence in the county.
To support this strategy of moving to a more knowledge based economy, IDA Ireland is working closely with educational institutions in the Sligo region in developing the skill sets necessary to attract high value added employment to the county. As part of the transition to repositioning the county to a more knowledge based economy, IDA Ireland is marketing Sligo as a key location for investment in the pharmaceuticals, chemicals, medical technologies, engineering, consumer product and financial services sectors. IDA Ireland is also working with FÁS to provide guidance in developing the skill sets needed by those in the workforce who are interested in upskilling.
The location that IDA Ireland focuses on is the national spatial strategy gateway town of Sligo and the linked gateway of Letterkenny-Derry. In addition, IDA Ireland is actively promoting the county towns of Donegal and Carrick-on-Shannon. Over the past five years, IDA Ireland's focused strategy for Sligo has been to promote the county as part of an integrated north-west region with access to a population base of more than 220,000 people.
Recent job announcements for Sligo include Abbott Ireland, which is to add 350 new jobs to its existing diagnostics facility——
Tim O'Malley (Limerick East, Progressive Democrats)
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——and the consumer telecommunications company IDT Toucan, which will create 300 new jobs at its customer service centre in Sligo. Enterprise Ireland's policy objectives for balanced regional development are reflected in the structure of its funding offers whereby funding for existing company expansion and start-up business is biased towards the regions. The maximum grant level is higher than in Dublin and the mid-east and a higher proportion of this funding is also non-repayable.
Since the beginning of 2002, Enterprise Ireland approved over €3.4 million in support to its client companies in County Sligo and made payments of over €2.4 million. In the same period EI has approved support of over €1.2 million for third level-industry partnerships with the Sligo Institute of Technology to encourage the adoption of new technologies by industry,
In terms of job creation, Enterprise Ireland activity is focused on the creation of new jobs through supporting entrepreneurs setting up new high potential start-up companies, the retention and creation of new jobs in existing companies and enhancing innovation capability through support of research in companies and third level institutions.
Enterprise Ireland's future activities are outlined in its new strategic plan Transforming Irish Industry 2005-2007 which was launched by the Minister for Enterprise, Trade and Employment in May 2005.
John Perry (Sligo-Leitrim, Fine Gael)
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This speech is totally irrelevant. It does not answer the problems of Sligo. I can take no more of this speech. It does not deal with the issues of Sligo. It is totally out of order. I cannot take any more of this tripe.
Jimmy Devins (Sligo-Leitrim, Fianna Fail)
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That is not parliamentary language.
Tim O'Malley (Limerick East, Progressive Democrats)
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The strategy sets out the role Enterprise Ireland will play in transforming Irish companies into market-focused and innovation driven businesses that have the ability to complete successfully on world markets. In July 2005, Enterprise Ireland organised a briefing on the new Enterprise Ireland strategy to companies from across the north west in Sligo. I assure the Deputies that the State development agencies, including the local county enterprise boards, under the auspices of the Department of Enterprise, Trade and Employment, will continue to work closely together and with local interests in promoting Sligo and the north west for further job creation and investment.
John Perry (Sligo-Leitrim, Fine Gael)
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They sold out to an American company 12 weeks ago.
Tim O'Malley (Limerick East, Progressive Democrats)
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I know far more about employing people than Deputy Perry ever did.
John Perry (Sligo-Leitrim, Fine Gael)
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The Minister of State should come to Ballymote and see how many people he can employ.