Dáil debates

Thursday, 30 April 2009

4:00 pm

Photo of Kieran O'DonnellKieran O'Donnell (Limerick East, Fine Gael)
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I thank the Ceann Comhairle for allowing me to raise this urgent matter on the adjournment debate. As we speak, 450 workers in Dell will lose their jobs today. It is a very sad for the workers and their families. A commitment was given by the Government that the European Global Adjustment Fund, some €500 million, would be accessed at European level. The application was to be made by Government. The funds would be used to provide retraining, counselling, to enable people to access alternative employment and to enable people to set up their own small business. To date, that has not happened.

I wish the 450 Dell workers concerned all the best. They are just the first group. In excess of 500 people will lose their jobs in Dell in July, in October another 500 will be lost and by next January another 400 will be lost, a total of 1,900 manufacturing jobs and 100 in the non-manufacturing area. That figure does not include people in Banta Global Turnkey, where 477 jobs will be lost and Flextronics, where almost 268 are being lost, all directly related to Dell.

Dell has been a great employer and provided a lot of down-stream jobs, but the contraction of its operations in Ireland has had a major exponential knock-on effect in Limerick and the wider community. We want to see Dell remain in Limerick, where 1,000 higher-end jobs are expected to be retained. It is extremely important not only to retain those jobs, but to build on them. I put forward a model in terms of what Apple did in Cork. The Government and agencies such as the IDA and other need to work with Dell to ensure we can build on the jobs. Perhaps some of those losing their jobs today can be retrained and access some of the new jobs.

In terms of the using European globalisation fund to help the workers concerned, which is the issue I want to raise today, I made direct contact with the EU Commission. On 1 May, the new rules on the fund will apply, whereby the EU will provide 65% of the funding and the State 35%. The current situation is 50% EU and 50% for the State. It will apply to cases of 500 redundancies or more, whereas currently it is 1,000 redundancies. It will apply for a two year period rather than the current one year period. Most importantly, it relates to an economic crisis rather than displacement of jobs outside the EU.

Dell in Limerick, and other companies such as Banta Global Turnkey and Flextronics, meet that requirement. I strongly urge the Government to make a submission immediately and make the case to the EU Commission. It can make the application prior to the full 1,900 or more redundancies taking place. There is a worry that the number of people redundant at the time one applies will determine the amount of funding received. A case can be made, in terms of Dell in Limerick and Banta Global Turnkey where, because we know the number of jobs which will be lost over the coming months, the fund should be drawn on straight away.

It is critical to retrain people and get them back into the workforce. I understand the new rules have been agreed at Commission level, at the employment committee stage in the European Parliament and at senior official level at the Council of Ministers. They will be passed by the European Parliament this coming Tuesday and will be dealt with by the Council of Ministers thereafter. They will come in to formal effect from July. However, they will be backdated to any application submitted from 1 May.

I see no reason the Government should not be ready tomorrow to make a submission to the European Commission regarding the European globalisation fund. If the Government is not ready to make such a submission, it is because it has dragged its feet and has not been doing the work. This is about accessing these funds. If one looks at other countries which have accessed this funding, they have obtained approval prior to the loss of the jobs. I want a commitment from the Minister of State that this application will be made tomorrow and the funding drawn down, and that the Government will start looking after the Dell employees and others. We now need a positive statement from the Government that it will make this application tomorrow and access some of this €500 million in funding.

Photo of Michael FinneranMichael Finneran (Minister of State with special responsibility for Housing and Local Services, Department of Environment, Heritage and Local Government; Roscommon-South Leitrim, Fianna Fail)
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With all redundancies there is an acute human cost and my thoughts are with those workers being made redundant today at the Dell plant in Raheen, County Limerick.

The Deputy has inquired about when any co-financing support available under the European globalisation adjustment fund, EGF, will be available to these workers, the first group of whom are being let go today. In total, up to 2,000 workers are to be made redundant at Dell. A number of other companies that are directly linked to Dell in County Limerick have also notified the Department of Enterprise, Trade and Employment of related job losses.

Irrespective of the timing or eventual outcome of any application to be made for EU co-funding under the EGF, the Government has already begun to put in place relevant training and employment supports to assist those workers facing redundancy in Dell to retrain, to improve their skills or to pursue educational opportunities to assist in their eventual reintegration into the workforce. FÁS has put in place a special dedicated team to assist Dell workers in terms of individual skills assessment, occupational guidance and advice, job search assistance and the provision of training. To date, 480 workers have been invited to group briefing sessions and one-to-one guidance interviews. I understand some 345 workers attended the former session and 325 the latter. In addition, 60 workers participated in an ECDL computer training course arranged by FÁS.

A dedicated website, www.tusnua.ie, to assist redundant workers in assessing their options for alternative employment or further education in the mid-west region has also been put in place through a collaborative initiative between the University of Limerick, Limerick Institute of Technology, FÁS, the county and city enterprise boards, Enterprise Ireland and several other regionally located bodies. The majority of such supports are being provided from the State's own resources in the interim. Any subsequent co-financing received under the EGF will therefore serve to defray some of the costs of supports already being provided or planned by the State and most likely will be received some time after these supports have been availed of by the redundant Dell workers.

The House will be aware that the Minister for Enterprise, Trade and Employment has established the mid-west task force, chaired by Mr. Denis Brosnan, which is assessing the impact on the wider regional economy of the decision to close most of the Dell plant in Limerick and the associated job losses in other companies. It is also carrying out an analysis of the potential impact of the current economic downturn on the region.

The Department, in conjunction with the relevant State agencies, is currently preparing an EGF application in respect of Dell redundancies. All relevant eligibility criteria must be met to allow us to make a successful application. This is a complex and time-consuming technical process requiring the inclusion of considerable supporting data and involving not just the Department but a number of other State agencies and external bodies. Department officials have been also engaged in ongoing discussions with the European Commission regarding the application. Last December the European Commission proposed, as part of the European economic recovery plan, the revision of the current EGF regulation to make it more accessible, effective and responsive. The new application conditions will make the fund more accessible, particularly to smaller countries such as Ireland. These include halving the applicable redundancies threshold to 500; doubling the implementation period to 24 months; increasing EU co-financing from 50% to 65%; and broadening eligibility criteria for applications made between 1 May 2009 and 31 December 2011. However, while agreement was reached earlier this month between the European Council, Parliament and Commission, the revised regulation remains to be formally adopted by the European Parliament in its forthcoming plenary session as early as next week and subsequently by the European Council, probably in early June.

The proposed changes to the EGF regulation will apply retrospectively to all applications submitted by member states from 1 May 2009. Due to the increased accessibility of the fund, it is probable there will be a greater number of applications and the fund is likely to be deployed to greater effect than has been the case to date. In this context it continues, therefore, to be the intention of the Minister, as stated previously in the House, to make an EGF application to cover Dell redundancies without delay.

Photo of Kieran O'DonnellKieran O'Donnell (Limerick East, Fine Gael)
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When?

Photo of Michael FinneranMichael Finneran (Minister of State with special responsibility for Housing and Local Services, Department of Environment, Heritage and Local Government; Roscommon-South Leitrim, Fianna Fail)
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The proposed new revisions to the EGF regulation, when adopted, should further facilitate Ireland in this regard and should ensure, if the application is ultimately successful, the attraction of a higher level of co-financing than heretofore.