Seanad debates

Thursday, 17 October 2002

Adjournment Matters. - Job Losses.

 

10:30 am

Photo of Paul BradfordPaul Bradford (Fine Gael)
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I welcome the opportunity to raise this important issue in the House but I must express my disappointment at the failure of the Tánaiste and Minister for Enterprise, Trade and Employment, or the Minister of State at the Department, who is a public representative for the area, to come to the House. The closure of IFI is a devastating blow to the region and while political football will not solve the problem, I would have at least expected the Minister of State at the Department of Enterprise, Trade and Employment to be present to respond. However, I appreciate that the Minister of State, Deputy Callely, is present and I await his comments with interest.

The community was in a state of shock at the announcement of the proposed closure of IFI. It is a devastating blow to Cork, the area I represent, to the Arklow region and to the community in Northern Ireland, where there is also an IFI plant. However, we recognised that there were problems and that negotiations had been underway for some time to try to bring about an improvement in the situation.

The Tánaiste met with workers' representatives on 12 September and I think she may be meeting them again at some stage today. A strong indication was given on 12 September that time would be allowed to bring about a framework under which the cost base would be reduced at IFI. We must recognise that there was a difficulty with costs but the unions and the worker representatives were working to ensure that costs would be reduced. The announcement of the factory closures therefore came as a terrible blow.

Shedding crocodile tears will not reverse this decision and it would not be any great help to anybody, so we must address the question of what to do next. The Tánaiste indicated that there is a possibility of a task force, which happened previously in a number of areas where major job losses occurred. In the Cork region, and east Cork in particular, there have been huge job losses over the past number of years. A long list of traditional industry has closed down, going back to the times of Ford, Dunlop, Irish Steel and its successor, Ispat, and now including IFI.

We need the Government to give this area urgent attention and we need a task force that will not simply report but which will work and produce employment. We also need early clarification as to the entitlements of the workers at IFI. Many of them have spent up to 25 years working in the plant and they must be given not simply the maximum assurances but the maximum entitlements and a generous package for their lifetime of service to this industry.

The Tánaiste indicated that she will try to put in place training measures for the workers to help them secure alternative employment. That will help if alternative employment can be found and can be generated for that particular region. I would like to hear the Tánaiste's representative indicating that east Cork will be a prime focus for new industrial development because the region has been dependent on old industry. It behoves us all to try to act responsibly. There is no point at this stage in playing political games, but there is a grave onus on the Tánaiste and her Department to respond in a positive and fair fashion to what is not just an employment crisis, but a genuine human crisis affecting three different communities across the island.

It is not only the workers and their families who are affected. The agricultural community is genuinely concerned at the fact that if this proposed closure goes ahead, there will be no fertiliser industry in this country. This will bring its own problems and difficulties in the years ahead. I ask the Government to pay very serious attention to this problem and its knock-on effects. Let us try to respond in a fair and reasonable fashion to all affected.

Photo of Ivor CallelyIvor Callely (Dublin North Central, Fianna Fail)
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I thank Senator Bradford for very eloquently and passionately putting his case, including reference to the wider context of the fertiliser industry generally. The Tánaiste would very much like to be here but, unfortunately, she is unable to be present because of other commitments. The Minister of State, Deputy Michael Ahern, who responded to an Adjournment Debate on this issue last night in the Dáil, was unaware that this issue was being raised here today and is not in Dublin to appear before the House. He would very much like to be here and I know he has very strong views on this issue.

IFI is jointly owned by ICI, with 49% of the company, and the State through Nítrigin Éireann Teoranta holding 51%. As the House is aware, the board of IFI decided at a meeting on Tuesday that it could not continue trading and has recommended the appointment of a liquidator. It is obviously a matter of extreme disappointment that, despite the efforts of all those involved, it has not been possible to find a solution to the severe financial difficulties at Irish Fertilizer Industries. Clearly, this will be devastating news for the workforce, their families and for the local communities involved.

The Tánaiste will be taking steps immediately to ensure that everything possible is done to assist those concerned to find alternative employment as quickly as possible. FÁS, the IDA and Enterprise Ireland will be immediately looking at what needs to be done in both Cork and Arklow, with the priority being to provide whatever retraining might be necessary and to seek alternative investments for these areas.

My Department has also been in a contact with the Northern Ireland authorities in relation to the Belfast situation. The Tánaiste also met with representatives of the workers this morning to discuss their concerns. The company operates in a very volatile market which is going through a very tough period of trading. The market is plagued by considerable levels of oversupply resulting in poor prices while costs remain high. The company made significant losses in the past year and despite the identification of a number of significant cost savings as part of recent efforts to save the company, it was still not possible to establish a basis for a viable future. The Government, through NET, and ICI as joint shareholders have been very supportive of the company, including by means of the provision of €34 million in recent years. Since inception in 1961, the value of the Exchequer support for NET and IFI has amounted to nearly €750 million in present day terms.

Unfortunately, this company has struggled, since its inception in 1987, to deliver a commercial rate of return and, as a result, it now requires very large borrowings just to fund day to day operations. These borrowings are on top of the €200 million in debt which was retained by NET at the time IFI was established in 1987. The debt retained by NET had risen to over €250 million by 2001, when most of it was taken over by the Minister for Finance.

While a recent request for funding was submitted to the shareholders, the additional funding sought would not, even on the basis of the company's plans, have established a viable basis for going forward. Instead, the objective was to enable the company to continue trading for just for a number of months. The company believed it might be possible to dispose of its assets for a higher price at a later stage. The shareholders' consideration of that plan was that it was extremely fragile and even minor shocks would have, yet again, made the company's position untenable. Accordingly, they did not have confidence in the plan and both sides were agreed that the provision of further funding in such circumstances could not be justified.

At this stage the focus will have to move to ensure an orderly wind down of the operations. Both shareholders will, of course, co-operate fully with the company and the liquidator in an effort to ensure the process can be as smooth and as efficient as possible. I regret the news is not more favourable on this occasion.

The Seanad adjourned at 1.40 p.m. until 2.30 on Wednesday, 23 October 2002.