Dáil Éireann - Volume 483 - 25 November, 1997

Adjournment Debate. - Announcement of Job Losses.

[593] Mr. O'Shea: May I share my time with Deputy Ferris and Deputy Deasy?

An Leas-Cheann Comhairle: Is that agreed? Agreed.

Mr. O'Shea: Today's announcement that 750 jobs will be shed by the Avonmore-Waterford Group as a result of the merger of the two constituent companies, Waterford and Avonmore Co-operatives, represents a major blow to the south-east region, in particular County Waterford. The news means that the company's plant at Dungarvan will be closed and the workforce in Kilmeaden will be reduced, but the plant will not be closed. Outside Waterford, the merger will also result in job losses in Rathfarnham, Castlelyons, Clonmel, and Dundalk. The reverberations of the merger will be felt throughout the country.

The announcement will result in great economic difficulty for Dungarvan and Kilmeaden and for many individual workers. It is a devastating blow for any family so close to Christmas. The closure of the plant will have a damaging effect on Dungarvan's local economy because of the number of firms and businesses which depend on spin-off trade from the co-operative. Approximately 200 people are employed at the milk processing plant which is the main source of employment in the town. There has been a processing plant in Dungarvan for the past 90 years. Not only is a considerable number of the town's workforce working at the plant, but it is part and parcel of the town's history. It is evident that Waterford will lose considerably as a result of the merger sanctioned by the Tánaiste.

When the merger was first mooted, members of Waterford Co-operative were justifiably concerned that their plant would lose out as a result. It is evident that Waterford will now be a junior partner in the new operation and Avonmore will play a leading role. It is imperative that the company begins immediate negotiations with trade union representatives about the proposed closures. Failure to do so will inevitably lead to industrial action and all that entails. Tonight's announcement by the trade unions that they will oppose involuntary redundancies is welcome. The company failed to consult fully with the unions when the rationalisation plan was being drawn up. Government and Opposition must ensure that the company will enter into meaningful and worthwhile negotiations with the trade unions representing the workforce.

The Government, in conjunction with the IDA and Forbairt, must ensure that replacement industries and employment be quickly found for the towns and regions which have been hardest hit by the fallout from this merger. A task force comprising all relevant Government agencies [594] akin to that which has proven so successful in Tallaght must be put in place to ensure workers who lose their jobs will be provided with training and reskilling to help them find alternative employment. Avonmore-Waterford Group has grown and developed thanks, in part, to the loyalty and commitment of its workforce through the years.

I welcome the allocation of £5 million to establish an investment fund and a development fund but in the context of the unfortunate lack of appropriate consultation in deciding to close the plants, this measure may only be seen as a sop by a disgruntled workforce. It is up to the company and the Government to demonstrate that this is not the case. Any rationalisation plan should be introduced on a voluntary and agreed basis. The company should make every effort to retain the maximum number of jobs at all the plants and it should also make every effort to develop new product lines. The Government and the Minister should commit every possible resource to minimise the impact of the situation and to provide worthwhile and decently paid alternative employment.

Mr. Ferris: I thank Deputy O'Shea for sharing his valuable time and the Minister for coming here. As this affects his constituency as well as mine we are both interested in what happens. When I spoke with company representatives today, they gave their reasons for the job losses. An amalgamation of two major companies is bound to lead to job losses. The losses in this case are not confined to Dublin and Waterford; they also affect my constituency. We have lost an integral part of the Avonmore Group at Suir Island in Clonmel with job losses for about 35 people.

The company hopes to retrain and relocate some of these workers. It has committed £7 million with the Government and Forbairt to a programme of retraining, replacement and redevelopment of the company. I hope every effort will be made to negotiate properly with the trade union movement, which is not unreasonable in these cases if its members are to be properly cared for. There is no compensation for the loss of a job. Money in the hand is great today but it will be gone by Christmas. A job is more important.

Mr. Deasy: As we suspected months ago, this is not a merger but a takeover and has been since the beginning. The part of the country where Deputy O'Shea and I live has suffered inordinately in this so-called merger. Will the Tánaiste and the Minister of State reassess the situation because I believe they were not told the full story by the company? The Tánaiste realised that last week when she met with the unions who had not been appraised of this disgraceful situation.

Some 250 jobs are being lost in Dungarvan, a small provincial market town which, with Mitchelstown, is the home of the dairy industry in [595] Ireland. The facility in Dungarvan is the best in the group and is second to none. There is no reason it should be closed other than favouritism by the parent group. This is appalling. The workers are shellshocked and one cannot blame them for feeling that way. It is not their fault. The management made some imprudent decisions, such as purchasing major operations abroad about which they did not know anything and which lost heavily and the workforces in Dungarvan and Kilmeaden are suffering because of this.

I ask the Tánaiste and the Minister of State to reassess the situation because the Tánaiste gave the so-called merger her endorsement last July. It is not a merger; it is a takeover. The treatment of the workers has not been even handed because the people in County Waterford have been victimised. I want the Tánaiste to intervene to ensure fair play.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. T. Kitt): I fully share the Deputy's concerns about the announcement today at the Avonmore Waterford Group of the major job losses of 750 which are expected to arise in Ireland from the major reorganisation programme which the group intends to implement in order to achieve world class competitiveness. The scale of the job losses envisaged is substantial by any measure and I accept that the group rationalisation will have a very serious impact on employees, their families and local communities in several areas of the country, including Rathfarnham in my constituency.

The Avonmore-Waterford Group has indicated that the scale of the reorganisation proposed reflects the seriousness of the issues facing the entire dairy industry which prompted the merger of Avonmore and Waterford. The reorganisation programme is expected to be completed in 1998. While the costs involved in human terms are substantial, the group is satisfied that such a comprehensive restructuring is essential to optimise efficiency and competitiveness and consolidate its significant international position.

The implementation of the programme is designed to achieve competitive advantage in key sectors of the food industry, such as consumer dairy and meat products and dairy food ingredients.

The Tánaiste and Minister for Enterprise, Trade and Employment urged the Avonmore-Waterford Group to seek to ensure that jobs losses arising from the merger were kept to the minimum possible while recognising that the objective was to create a major global player in the food processing industry and secure employment and growth in the long-term. In this context, in her recent meetings with management and trade unions, she strongly encouraged both sides to deal with restructuring on the basis of dialogue and partnership. The group acknowledges the serious impact which the rationalisation programme will have on employees and local communities [596] and is putting in place a comprehensive range of measures to alleviate or reduce the hardships which are likely to arise. These measures include attractive redundancy terms, a programme of retraining, reskilling and relocation support and a task force, in association with Forbairt, to identify and secure replacement employment projects.

In addition, the group is providing substantial resources for the establishment of support funds which are designed to attract jobs to the affected areas and ease the adverse social and economic impacts arising from closures or reductions in plant size. The Tánaiste has secured the agreement of the Avonmore-Waterford Group that it will establish a programme to deal with the retraining and counselling of workers who opt for redundancy.

Forbairt and other industrial development agencies will be working closely with the Avonmore-Waterford Group to lessen the impact of the closures and redundancies and will do everything possible to assist redundant workers through initiatives such as training and retraining, identification of alternative job opportunities and the attraction of replacement industries. The response from the group should take full cognisance of the scale and impact of job losses envisaged in this rationalisation.