Seanad debates
Wednesday, 29 January 2003
Adjournment Matters. - Job Losses.
2:30 pm
Ulick Burke (Fine Gael)
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I welcome the Minister of State. Few towns have suffered so badly in recent employment history as Ballinasloe. It is regrettable that as far back as two and a half years ago the Tánaiste established a task force representative of all the agencies and said Ballinasloe would become an industrial development priority for the future. Two and a half years on, no commitment from any Government agency or the Government directly has brought a single job to Ballinasloe. While some jobs have been created in the town, that was as a result of the initiative of a local private personal group which was formed as a direct result of the situation.
Two weeks ago 385 jobs were lost at Square D, which had been a very good employer. That was the straw that broke the camel's back. As far back as October the Government knew there were difficulties with regards to this company, yet nothing was done. At the time the national spatial strategy was introduced it was aware of this, but Ballinasloe was bypassed. On the day of the announcement that we were to lose those jobs the Tánaiste said Galway was only 40 kilometres down the road and Athlone only 16. That epitomises the total insensitivity on her part to the plight of those who lost their jobs, their families and the total hinterland represented.
I ask the Minister of State to indicate what positive steps are to be taken. There is no point hearing again jargon and clichés regarding the establishment of another action group or task force involving all the agencies. I acknowledge the efforts and endeavours of our county manager, Mr. Donal O'Donoghue, with regard to co-ordinating the resources available at local level to bring about a change. While I know we cannot get a replacement overnight for the 385 jobs lost, we want to give an indication to the those who are in a state of shock and mourning regarding their futures. Many young people who were in employment just a few weeks ago are packing to move from an area which has been neglected by the IDA – whether based in Galway or Athlone – Enterprise Ireland and all the other agencies.
The recent census statistics clearly indicate that we are living in a town and region in decline. Ballinasloe is a town which has passed through the Celtic tiger years without any measurable growth. I call on the Minister for State to ask his colleague at the Department of Finance to extend the pilot scheme operating very successfully in the upper Shannon region to the middle region to incorporate Ballinasloe and Portumna and the catchment area in between. The incentives which have proved so successful in the south Leitrim area and regenerated a rural area in decline could kick-start a new era in Ballinasloe. They would give the injection of inward investment that the town has been lacking from any State agency or Government in recent years.
We heard the Tánaiste indicate there would be decentralisation to Ballinasloe. Even if this was announced tomorrow, it would be two or three years before it would take effect. It would bring people in. We want replacement jobs for the families which have been left without anything for the future. The Tánaiste has given a commitment on the part of the Government that there will be immediate action to bring about a change, to bring industry and employment to Ballinasloe. Employment will come more rapidly if the Government clearly indicates that it will now designate the Ballinasloe region as an area earmarked for inward investment and growth, where local people can respond and bring back life to a town which has many positive aspects and where there is industrial peace. We had two flagship companies, AT Cross and Square D, in which rarely, if ever, there were industrial disputes and the quality of their workers was always recognised.
With regard to the role of IDA Ireland locally, this must be redirected. There is something wrong at the headquarters of IDA Ireland because it will not accept the advantages of Ballinasloe and instead promotes investment in Galway or Athlone. Other people, cynics perhaps, would argue that these other areas are made more attractive for political reasons.
During a recent reception for a deputation from Ballinasloe, the Minister stated that the Government is in favour of immediate action. We have heard about prioritisation before, but no action was taken. The only course of action which would lift the gloom in Ballinasloe would be a clear statement from the Government that it will extend priority designation to the town in order to encourage inward investment and investment from within the community to return life to the town.
Tom Parlon (Laois-Offaly, Progressive Democrats)
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I thank the Senator for raising this matter on the Adjournment. I have come to the House on behalf of the Minister. I was also present for the debate on Connacht rugby, during which everyone indicated their support for the province. No insensitivity was intended when the Minister made the comments to which the Senator referred. I hope my response will be devoid of the clichés and jargon which concern him.
The announcement by Square D on 15 January 2003 of plans to close its Ballinasloe plant by the end of June 2003 with the loss of all 387 jobs on its books cannot be described as anything other than a severe body blow for the members of the workforce, their families and the local community. It is a priority for the Minister to ensure that everything possible will be done to find new investment and new sources of employment for Ballinasloe, although I am aware this will not be an easy task.
Established in 1971, the Ballinasloe facility manufactures the Square D brand of electrical circuit breakers sold primarily in North American markets. The closure decision, according to the company, reflects significant change in market demand for circuit breakers, resulting in over-capacity in manufacturing operations at the group's North American division. A number of the group's North American manufacturing operations have already been moved to Mexico.
In an effort to lessen the impact of the closure, the North American division of the parent company, Schneider Electric, has stated it is committed to working with IDA Ireland and the Irish authorities to find manufacturing firms interested in the Ballinasloe plant, which may be in a position to offer suitable job opportunities to a well qualified workforce, assist Ballinasloe employees obtain new jobs, provide outplacement assistance and job search training, offer counselling and information to employees on company paid benefits and provide five weeks' severance pay per year of service in addition to statutory redundancy entitlement. The agencies under the remit of my Department are also working to lessen the impact of the closure.
IDA Ireland has been aware of the difficult market conditions being experienced by the company for some time and began to intensify discussions late in 2002 when it became apparent that the company was in difficulty. IDA Ireland has already brought one potential client to view the plant and will continue to explore other possibilities as well as seeking out other potential clients. FÁS, the national training authority, has already been in contact with the company and is to meet the company management with a view to offering its services to all staff.
Tom Parlon (Laois-Offaly, Progressive Democrats)
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I am informing the Senator of the facts. It is very positive that, despite taking a decision with serious implications for Ballinasloe, the company has acted responsibly in terms of what it is offering to do. Many other companies have walked away without paying workers their entitlements.
Tom Parlon (Laois-Offaly, Progressive Democrats)
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FÁS will register people as job seekers, provide career information and guidance and carry out a training needs analysis. It will provide a range of training courses designed to meet the skill needs of individuals to enhance their employability, while also providing the area with a skilled workforce. Enterprise Ireland began discussions last week with the company to discuss supports for any possible start-ups by local senior management.
The industrial development agencies were working hard in Ballinasloe prior to the closure announcement. IDA Ireland was already active in the promotion of Ballinasloe for new inward investment, with the key focus being on providing international standard property solutions in the town to attract new companies. In light of the closure of Square D, IDA Ireland has now finalised plans and a planning application has been lodged with Galway County Council for a new 27,000 sq. ft. technology unit on IDA Ireland's 30 acre business park in Ballinasloe. When planning permission is granted, construction will be undertaken by private developers and IDA Ireland has already begun to actively market this facility as well as promoting the Square D facility in the town.
Enterprise Ireland has approved funding of €120,000 for the work in progress at the community owned enterprise centre and it is understood there is still some space available for potential projects. The Galway county and city enterprise board has been actively involved in industrial-community development in Ballinasloe. During 2002, considerable progress was made with the area community development group with £63,000 allocated to the small business development park which now houses four start-up businesses. Over the past three years, Ballinasloe has received some £350,000 in support from the county enterprise board.
At Galway-Mayo Institute of Technology and Galway University, there are enterprise platform programmes with places available for staff of Square D who may have an idea to start up their own manufacturing/international traded services businesses. This programme affords the opportunity to develop business plans and carry out market research for ideas before starting a business. A similar new programme is about to commence in the Athlone Institute of Technology.
In regard to development in the Galway area, it is significant that five new IDA Ireland investment supported proposals announced in 2002 will ultimately provide almost 2,200 high quality jobs in the health care and internationally traded services sector. The companies concerned are Abbott, Churchill, Medtronic, Micros and Net IQ.
Ulick Burke (Fine Gael)
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They are all located in Galway, where the Minister told people to go to get jobs.
Tom Parlon (Laois-Offaly, Progressive Democrats)
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They are in the Senator's county. I would be very happy at the prospect of 2,200 new jobs being created in my constituency.
Ulick Burke (Fine Gael)
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We have heard it all before. This is what I feared.
Tom Parlon (Laois-Offaly, Progressive Democrats)
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Recognising that urban environments are generally more attractive for mobile investments, IDA Ireland has adopted a target of having 50% of all new greenfield investment located in the Objective One region. IDA Ireland has sought to encourage investments in defined sectors to specific regions, which seeks to build on the relative advantages in different towns. An essential part of this endeavour has been the refining of IDA Ireland property offerings, a key tool in winning investments.
IDA Ireland has designed and developed high quality business parks, fully serviced to international standards, and continues to do so. In Tuam, IDA Ireland has acquired 27 acres and is currently carrying out site development works after which it intends to have a high quality facility provided by the private sector. At Loughrea, it is upgrading land to make it more marketable and in Gort it has a 20,000 sq. ft. high-quality building which it is actively promoting for suitable projects.
Ulick Burke (Fine Gael)
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In 25 years it did not create a single job. That is its record.
Tom Parlon (Laois-Offaly, Progressive Democrats)
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While IDA Ireland is convinced that it has excellent quality property solutions in the larger towns in the county, it is also cognisant of the slower inward investment climate that has prevailed for the past two years. This has also had an impact on jobs in existing client companies. Much progress has been recorded in recent years in many of the companies attracted here, in the shift up the value chain of many of these and in many aspects of our competitiveness.
Costs are a major issue for all companies. They have moved out of line with our competitors and this impacts heavily on lower technology businesses. Hence, IDA Ireland has a major emphasis on the health care and internationally traded services sectors. There is now a well developed health care cluster in the west region, particularly in Galway, which includes companies such as Transition Optical in Tuam, StarGuide in Oranmore and Medtronic, Boston Scientific and Abbott in Galway City.
Working with the third level institutes in the area, Enterprise Ireland has approved £2.6 million for the development of campus incubator units at Galway-Mayo Institute of Technology in Galway and €695,000 for units in NUI, Galway. A sum of €2.54 million has also been approved for the development of units at Athlone Institute of Technology. These incubation centres support the development and expansion of campus company activity, encourage and support the commercialisation of research and development carried out in the institutes of technology and embed the institutes of technology as major supports for the development of high-tech companies in the regions.
Tom Parlon (Laois-Offaly, Progressive Democrats)
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The Minister has also met many of the Ballinasloe interest groups and hopes to do so again in the near future.
Ulick Burke (Fine Gael)
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We have been listening to this for two and a half years. I am disappointed that the Minister of State has lent himself to this statement.
Tom Parlon (Laois-Offaly, Progressive Democrats)
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I have outlined a number of important facts that the Senator has totally ignored.
Tom Parlon (Laois-Offaly, Progressive Democrats)
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The Tánaiste has also met the interest groups and reassured them of her ongoing commitment to work on their behalf.