Ten year boom to bust cycle

Clothing industry is in terminal decline

     
There is a way to breach the beggar thy neighbour mentality that has forced development agencies into competing against each other and playing into the hands of foreign industrialists.
What do the names Atlantic Mills, Farah, Asahi, Shamrock, Gaeltex, Klopman and Sunbeam mean to you? They are all textile companies that over the past year have either been shut down or were teetering on the brink of closure.

What was once an important industry built by IDA grants, government tax breaks and training subsidies is being shut down by owners from the USA, Japan and Hong Kong. Even the industry flagship companies like Fruit of the Loom are not without their problems.

The closures have hit rural communities in Kerry, Mayo, Offaly and Donegal as well as Cork and Dublin and now thousands of workers are jobless. So what has gone wrong? ``Severe cost problems'' in the industry is the explanation given by the Department of Enterprise and Employment. This cost crisis has led management in many companies including Farah and Asahi to look to their employees wages and working conditions as the means to cut costs.

The 162 workers at Farah for example had unpaid wage increases owed to them under the both the PESP and PCW. That's almost six years of overdue increases. So in fact wages had already been effectively cut at this company.

The other reasons for these closures comes under the loosely titled heading ``international conditions''. In the case of Gaeltex this meant cheap clothing imports flowing in the Irish economy. For Shamrock Apparel this meant the ``recent strength of the pound against the dollar''.

The experience of the clothing and textile industry is in stark contrast to that of the computer industry which is in overdrive or the telesales sector. There are at present over 50 telesales companies up and running, providing over 5,000 jobs while there could be 80 or 90 by the end of the decade.

The government agency responsible developing both industries is the IDA. We asked them what prospects there are for the textile sectors. A spokesperson said the clothing sector had ``been in decline for at least five years'',''there was no saving it'' and that the sector was ``under pressure from low cost labour'' in Eastern Europe, the Far East and Portugal.

In fact any business that can last more than ten years is ``doing well''. Industry is constantly changing and only companies ``with the best and most efficient structures will survive'' said the IDA. The IDA can give no guarantees about how long a company will stay in the country but they will ensure that any company who get grant aid and leave within ten years will be pursued for the cash.

That gives some solace as last year the IDA spent £182 million on foreign industrial development, but what was more worrying was the IDA's assertion that there was no alternative to this method of industrial development. In the framework that there is no alternative to global market economies this is true.

There is though one path that has not been taken. There is a way to breach the beggar thy neighbour mentality that has forced development agencies into competing against each other and playing into the hands of foreign industrialists. What's needed is a co-ordinated agenda so that they could dictate terms to the multinational corporations and not the other way round.

What is the point in losing jobs to workers in Korea, Slovenia or Portugal. In the end of the day they too will be preyed on by other countries in a costly cycle of bids and counter bids.

Getting a multi-national to site in your state is an expensive business. You have to build factories and offices, often to a custom design as well as roads and communications networks. You have to have trained workers and none of this comes for free.

Take for example the already mentioned telesales sector in Ireland. Our selling point is the availability of low paid language graduates who are now completing Government accredited telesales diplomas. In ten years though this could all be water under the bridge.

This is no solace to the workers who this summer have lost jobs. In ten years we could be writing about the closure of the telesales offices Hertz, Gateway 200, Digital or IBM. As the government comes back off it's holidays next week they could maybe focus in this industrial development merry go round. They could start by asking themselves the question could they hack it in the world of international efficiency and global competitiveness. Somehow I think for many of them the answer would be no.

 

Supermarket workers claim share of £640 million

Imagine for a moment you are running a multinational corporation. How do you put a value on your workers? Of course there are the wages you pay them but if you were to sell them to another company how would you value them? Would you care? For some privileged workers such as premier league footballers they are deemed to have significant value and get a healthy share in their sale price. Most other workers though don't enjoy such rights.

Earlier this year Associated British Foods (ABF) sold their Quinnsworth, Stewarts, Crazy Prices and Lifestyle retail chain to Tesco Supermarkets for £640 million. Ever since then 7,500 26-County workers have been making their claim for a share in the £640 million windfall ABF made from their sale to Tesco.

The workers are also frustrated according to MANDATE General Secretary Owen Nulty at the ``seeming inability of the Irish management of Power Supermarkets to provide detailed information on current and future developments at the company''. Examples of this include the uncertainty of the of the proposed sale of the Lifestyle chain and the security of their jobs in the future.

Last week shop stewards representing the 7,500 staff at Power Supermarkets called on the executive councils of MANDATE and SIPTU to ballot members for limited industrial action. The possibility of stoppages is some weeks away but what is clear is the workforce of Power Supermarkets are determined to make their claim for a stake in the £640 million that their work created.