Ten year boom to bust cycle
Clothing industry is in terminal decline
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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.
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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.
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