Dáil Éireann - Volume 334 - 05 May, 1982

Adjournment Debate - Closure of Dungarvan Factory.

An Ceann Comhairle: I have allowed Deputy Deasy to raise on the adjournment the matter of the closure of the Quigley Magnesite plant in Dungarvan. The Deputy has 20 minutes.

Mr. Deasy: I will be splitting up that time with some other Members from my constituency and from Kilkenny. I thank the Ceann Comhairle for accepting this subject for debate on the Adjournment.

The people of the town of Dungarvan and the surrounding district were deeply shocked by the announcemnt last week of this closure. On last Wednesday, 28 April, the Pfizer Company announced their intention of closing, in July next, the magnesite plant at Ballynacourty, Dungarvan, County Waterford, with the loss of 140 jobs and a further loss of 17 jobs at their quarry in Bennettsbridge, County Kilkenny, together with as many as 40 jobs in CIE. Will the Minister for industry and Energy be in attendance?

An Ceann Comhairle: He is on his way in.

Mr. Deasy: May we delay for a moment?

[459] An Ceann Comhairle: We could, but it shortens the time available. My advice would be to continue.

Mr. Deasy: I will continue. The announcement came as an absolute shock to the work force, as well as to the inhabitants of the district. The work force had no forewarning of the impending closure and feel deeply aggrieved that they were not consulted, although the Department of Industry and Energy and the IDA had, apparently, been told of the decision three weeks earlier. There is utter dissatisfaction amongst the workers and their unions at the manner of the announcement. Most of the work force have been with the company since it commenced operations at Ballynacourty twelve years ago. They feel they deserve better treatment, by way of consultation, for their service and loyalty, especially in view of the handsome profits reported to have been made by the company in that period.

I would be extremely interested to know if the Minister will ascertain the profits made in those twelve years by the company. We only hear about the losses, but are led to believe that there were substantial profits made. It is only fair that the public, and especially the work force, should be made aware of those profits. Will the Minister fully investigate the proposed closure to see if there is any possible manner in which the operation can be made viable in the foreseeable future?

The company state that the rising fuel oil costs have made the plant's production of magnesite non-competitive. It is just possible that the use of natural gas from the national grid—that is, from the Kinsale gas field — together with the quarrying of the dolomite which is known to be on the site, could reverse that position.

If the plant cannot be made profitable, we ask for an alternative industry, possibly on the site. A magnificent fresh water supply is available, of two million gallons per day, plus a special railway connection, and the site would be suitable for a variety of industries. In this [460] regard, the company have an obligation to their employees to assist in setting up another industry. It could well be that they could transfer some other section of their multinational operation to Dungarvan. We would also ask the IDA to press ahead with projects such as the Sterling Drug Company enterprise for Dungarvan which, hopefully, will give valuable alternative employment.

Dungarvan have suffered heavily in the last few years, due to the reduction in the number of employees in Irish Leathers and also in the Waterford Co-operative Society. We in Dungarvan and west Waterford are not satisfied that the IDA have made a sufficiently strong effort to attract new industry and provide new jobs. There has been a lot of ballyhoo, many public announcements, press publicity, but very little creativeness where jobs are concerned, We want more action in this regard.

Above all, if the plant cannot be kept open indefinitely, we want production to continue until at least the end of the year, to enable alternative employment to be found for the workforce. That is not too much to ask. The closure is due to take place in July. We ask that the company continue operation of the plant until the end of this year.

The loss of this factory to Dungarvan would be catastrophic. Not only will 140 jobs be lost directly, but many more in service industries such as Radley Engineering, other local engineering metal works and electrical contractors, as well as general merchants. A provincial town such as Dungarvan cannot sustain such a loss, hence the absolute necessity for a replacement industry. The Quigley Magnesite industry paid out £1½ million annually in wages and salaries, plus another £3½ million in company contracts and purchases in the locality, while the operation is estimated at having been worth £1½ million to CIE per annum.

Firstly, we want the Minister to make every possible effort to save the industry, and, failing this, to extend its life until a replacement industry can be found for the employees affected. Even before this threatened closure was announced, unemployment in County Waterford had [461] doubled over the past two years. More immediately, we ask the Minister to meet a deputation of workers and unions to discuss the problems involved. I would ask him, if at all possible, to arrange such a meeting this week.

Mr. Gallagher (Waterford): As my colleague, Deputy Deasy, has stated, the impact on the decision to close Quigley Magnesite at Bennettsbridge will have a serious effect on business in the Dungarvan area generally and in Waterford as a whole. It has been stated in relation to Waterford that there appears to be a very blasé attitude of mind on the part of the Government where that city is concerned, in relation to jobs and the provision of industry. The Quigley Magnesite has been a very profitable industry for the past 12 years and now, for reasons of recession or other reasons best known to the Pfizer multi-national company, they are pulling out and leaving a hole in the ground in Bennettsbridge. They will be responsible for the closure of an industry which gives a substantial income to CIE, with a consequent loss of approximately 170 jobs, including the ancillary services affected by the closure of this plant.

I would like the Minister to answer some questions. One, in particular, is were the IDA in consultation with the company prior to the announcement of the closure and, if so, why did the IDA not contact the union? The management had no consultation with the unions prior to the announcement of closure.

Would the Minister clarify a statement made in relation to the Waterford Co-operative which was published in the local press to the effect that Waterford Co-operative were engaged in a substantial investment expansion programme which would provide in the region of 200 jobs? It was not clarified whether these 200 jobs would apply to the Dungarvan area or to the operation of the Waterford Co-op, which ranges all over the south-east.

The Minister should meet the unions and public representatives to see if anything can be done to keep Quigley Magnesite [462] in business or to see whether a replacement could be found to operate in Dungarvan. There is one factor which I am somewhat reluctant to bring up in the Dáil. There is a suspicion among some people in the workforce in Dungarvan about the reasons for the closure being other than financial. Was there some medical aspect to the question as to why, after 12 years' profit making, this company decided to pull out? I would welcome answers to these questions. There are an awful lot of rumours flying around Dungarvan and these rumours should be nailed once and for all.

Mr. J. Fahey: I am glad to have an opportunity of adding my voice to the appeal which has already been made to do something with regard to the situation in Dungarvan. Quigley Magnesite commenced operations in Dungarvan 12 years ago. At that time there was a tremendous welcome given to the company, which promised to give much greater employment than they actually gave. We expected it was going to be of a permanent nature and the company got tremendous co-operation from the local authority and the State with regard to aid and from CIE in the provision of a railway line to operate between Bennettsbridge and their plant in Dungarvan. Having got this tremendous co-operation from all concerned, we expected the company to treat their employees better than they have done on this occasion. We realise they gave good employment during the years they were in operation, despite the fact that the job potential first announced was never realised. However, I think it was very high-handed of the company to make a decision to close without having any consultation with the unions representing the workers. This has left a very bad taste in the mouths of the workers of Quigley Magnesite which could create bad industrial relations with other industries as well. The workers who have given such loyal service to the company over a period of 12 years deserve to be treated in a better manner.

I also ask the company, and the Minister should use his influence with them, to show some recognition of the co-operation [463] they got in the setting up and running of the plant. They owe it to the State, and to the Dungarvan area in particular, to see that this closure should not take place now. It was mentioned that they had made a good profit over the years. I do not know their situation with regard to profit and loss but I ask the Minister to investigate it. The company should at least continue in operation until the end of the year in order of give everybody a chance to see what could be achieved during that time, whether there would be a chance for the industry to survive or to get a replacement industry for the area. Unemployment in Waterford in general is at a very high level and, while we sincerely welcome the efforts of the IDA in the Waterford area, nevertheless their success is not as great as we would like it to be. Due to the efforts of the IDA we got a number of new factories into Dungarvan and west Waterford but they have not given the employment we expected. It is not just the 140 workers in Quigley Magnesite who are affected, there will be a loss in other firms which supply the needs and requirements of this company. There is also the loss of Bennettsbridge and the loss within CIE. Therefore it is a very serious matter.

I attended a meeting in Dungarvan with my colleagues recently and I found grave unrest and dissatisfaction among the workers at the way in which they were being treated. They are seeking information, to which they are entitled, with regard to the profit or loss-making situation of this company. It is wrong that the workers have been treated as shabbily as they have been on this occasion. I urge the Minister to use whatever influence he can to rectify the situation, even at this late stage, and to show some regard for all concerned by extending their operation at least to the end of the year.

Mr. Pattison: I would like to add my voice to the appeal made here by the previous speakers that the Minister will do everything in his power to ensure that the hardships that have been caused by reason of the proposed closure of Quigley Magnesite will be alleviated. It appears [464] that very little, if any, account has been taken of the social implications and upheavals of decisions of firms like this. Quigley Magnesite are part of the Pfizer Corporation, one of the biggest in the world, and it amazes me that they can make decisions such as this that have such devastating effects on an area. As representing the Carlow-Kilkenny constituency, I know of the effects it will have in Bennettsbridge. The 17 job losses there will have, proportionately, as heavy an effect on the community as the 140 jobs in Dungarvan. Tyre remoulding firms, engineering industries and many others that service the plant in Bennettsbridge will suffer consequential job losses because of the lack of business. I appeal to the Minister to do everything in his power to ensure there is a full investigation to see if this plant could be kept open. The other disturbing factor is that the produce that was coming out of Dungarvan will now be substituted by imports. That will create a serious impact on our balance of payments and will have a further serious effect on our economy.

Mr. Aylward: I agree with the comments which have been made by my colleagues from Waterford and Kilkenny. The most frightening aspect of this announcement is the manner in which the workers were treated. These men have given loyal service to the plants at Dungarvan and Bennettsbridge, to a company we were led to believe made quite a sizeable profit in their operations during those years. I appeal to the Minister to meet the deputation as soon as possible to discuss the future of this plant.

My colleagues in Waterford will forgive me if I dwell particularly on the plant in Kilkenny. A very good case has been made for the Waterford plant and I do not wish to be divisive, but the effect of the Kilkenny closure has been disastrous for the work force and throughout the entire Bennettsbridge area. In that area in recent times a number of firms have closed down, all small firms. Therefore, nearly all the labour force in the area are unemployed. When at work they were impeccable from the point of view of industrial relations — they had a magnificent [465] record down through the years. While the Bennettsbridge plant was in operation I do not think one day was lost because of industrial strife, something that cannot be said for other work forces throughout the country.

I suggest that the Minister try to persuade the American company to postpone closure for at least 12 months so that the possibility of saving the company can be considered. If that cannot be achieved, the postponement would give the IDA an opportunity to consider the establishment of alternative industries in both Bennettsbridge and Dungarvan.

Seventeen jobs have been mentioned in connection with the Kilkenny plant. However, the material was transported to Dungarvan by CIE: the railway line to Dungarvan was opened specifically for this purpose. Indeed a mile of new line was laid at a huge initial capital cost to CIE. They will now be unable to recover that cost. There are ten railway crossing gates on that line and when the line has been closed those jobs, too, will be lost if the plant cannot be kept in operation. I think the loss of revenue will be £1.5 million per annum to CIE.

The work force at Bennettsbridge have been informed that they will be made redundant on 11 June although the work force in Dungarvan have been told they will be kept on until the end of July. That is unfair discrimination against the Bennettsbridge workers and I ask the Minister at least to ensure that both groups of workers will be treated equally, that if redundancy cannot be avoided both groups will be paid off on the same day. At the very least, I hope the Minister will be able to persuade the company to keep the two plants in operation for 12 months.

Minister for Industry and Energy (Mr. Reynolds): In the short time available to me I hope to cover all points made. I have listened very carefully to what the Deputies have said. Like them, I regret that Quigley Magnesite have found it necessary to discontinue their operations at Dungarvan and Bennettsbridge, making a total of 157 workers redundant. I fully appreciate the social impact in any area when a sizeable number of workers [466] are let go. I assure all Deputies that I will not spare any effort to do what I can, but first of all I should like to put the background of this affair into perspective so that Deputies will be made aware of what has happened.

The press statement of the company referred to the closure of the operation. My understanding of the situation from those investigating the matter on behalf of my Department and the IDA is that the company are mothballing the plant to cover the remote possibility of an unexpected upturn in the market. As we all know, the product produced by the company is low grade and its success depends on a healthy steel industry to use up the product. I am reaffirming what I heard in Europe yesterday, when there was a full day's discussion on the steel industry and industrial strategy, when I say that the prospects for an upturn in the steel industry before the mid eighties, at the earliest, are very remote.

In relation to unemployment, I share the concern of the Deputies here. Every effort will be made by me and the IDA to try to create as many jobs as possible. We are going full stretch in relation to the retention of jobs. Nobody should be under any illusion about the efforts being made in a very difficult situation. A number of European Ministers for Industry around the table yesterday were faced with the problem of 11 million people unemployed in Europe without any immediate short-term solution. I would be less than honest if I said otherwise.

Mr. L'Estrange: The Minister was less than honest down in Westmeath when he was blaming the Coalition, when he was down in Castlepollard——

Mr. Reynolds: The Deputy should have been glad to hear of the extension when I opened it. I am sure he would have been delighted about that. Deputy Deasy would be glad if I could go down to Dungarvan next week to make a similar announcement. However, the closure of the Dungarvan plant is being done in a phased basis in the next three months with only a minimal reduction in the work force during that period. Quarrying [467] operations at Bennetsbridge have ceased already, I understand from Deputy Aylward, but I understand the employees will be retained for about six weeks during the run down operations. A sister company at Tivoli in Cork which makes refractory equipment for the steel industry and which is part of this organisatin, will not be affected, I understand, by the closure of the Dungarvan plant.

My Department and the IDA first became aware of the company's intention to discontinue operations in Dungarvan on 5 April last, when a senior representative of the company telephoned the managing director of the IDA to say that they planned to make an announcement in Cork on the following day, 6 April, that they proposed to close the plant. I heard about it late in the afternoon of 5 April and immediately took steps to try to arrest the closure. That was the only notice we got. We were told that afternoon that market conditions were such that the company could buy their requirements of magnesite on the open market at a lower price than the cost of producing it in Ireland.

Following strong representations from my Department and the IDA, involving a lengthy meeting on 6 April with senior management of the Quigley Corporation, the group reluctantly agreed on 7 April to postpone any announcement for three weeks in order to enable the IDA and my Department to have the position evaluated by reference to detailed studies which the company had made. This evaluation was intended to establish if a reasonable basis could be found for continuing the operation. It was recognised that if the evaluation showed that there was no realistic alternative to closure this would have to be accepted, and that the possibility of getting a new project for Dungarvan would be pursued vigorously. The evaluation by the IDA was undertaken with the assistance of one of my Department's professional officers, a chemical engineer who had experience in magnesite projects.

The conclusions reached were as follows: One, the magnesite manufactured by the company was being sold to a [468] decreasing market as the use of refracttories in steel making had declined due to the very severe recession in the industry. Magnesite can be made elsewhere from superior ore bodies with lower energy input and plants responsible for their production have captured the market; two, the magnesite produced by the company has inherent manufacturing disadvantages and it is difficult to say how these could be overcome.

The evaluation also found that the only solution to the company's problems is the finding of magnesite adjacent to the plant. That would take several years to prove and to develop, even if it were found. That is why we put forward the alternative of putting the plant into mothballs until such time as that possibility could be considered. The removal of a good deal of the cost of the burden of energy — 60 per cent of the cost of this product is represented by energy — would mean supplying the company with natural gas at about 10p a therm which would require a subsidy of £10 million in a two-year period while arrangements were being made to supply them with gas.

That is the size of the problem facing us in relation to Dungarvan: it would take a £10 million subsidy for two years to keep that plant open and then we would be trying to sell in a depressed market which is shrinking all the time. I am satisfied that the competitive disadvantage under which the company has been operating for some time in such that there is not a realistic alternative to discontinuing manufacture. I have asked the IDA in the circumstances to give special attention to the possibility of attracting a new project to Dungarvan to provide alternative employment for those affected.

I have said that the steel industry is in serious decline and indications are that it will not be out of recession until the mid-eighties. When we looked at the total evaluation, I regret to say there was not a serious alternative to closure.

Deputy Deasy asked me about the profits of the company. As he knows, they are a private company and that information is not available to me. I regret that the workers were not consulted [469] but if it had not been for the action of the IDA and my Department the whole undertaking would have been closed down immediately. I will repeat to the management what I have already said to them, that the social implications for the work force are very serious.

I was asked to receive a deputation. I explained to Deputy Deasy that I am not flying away from deputations. In the short time I have been in the Department I do not think any Minister has received more deputations: Deputy Pattison will be aware that even on a Saturday afternoon I received a deputation. However, next week I am engaged in a promotion tour for the IDA in Europe, a very worthy exercise. If I could be here next week I would receive the deputation. I will do so at the first available opportunity. I have lists of deputations lined up in the book.

[470] I repeat that we did not spare any effort to do what we could. Deputy Gallagher made a point about the medical aspect. I am not aware of it but I will investigate it if the Deputy would fill me in on the details later. I do not know about any rumours in circulation. I will also consider the matter of the Waterford Co-op. I had no advance notice of it and therefore the information is not available to me.

In relation to similar industries, there have been many closures in other areas. A lot of this product is used in Eastern bloc countries, but the free market for it has decreased rapidly. All we could do in the circumstances was to defer the closure. We have asked the company if possible to put an alternative industry there.

The Dáil adjourned at 9 p.m. until 10.30 a.m. on Thursday, 6 May 1982.