Reply by Tánaiste to Dail Question on Fruit of the Loom today (Tuesday, 8th December, 1998).

I have already expressed my concern at the manner in which Fruit of the Loom has announced the temporary lay-off of the majority of staff at its plants in Donegal this week.

The company's announcement on Monday, 7th December regarding a temporary lay-off to take effect before the Christmas break, from Friday 11th December until full-time work resumes in early January 1999, came as a major surprise to both myself and the IDA, neither of whom had been consulted. I understand, however, that rumours were circulating in Donegal last weekend about such an announcement.

Since I became Minister for Enterprise, Trade and Employment, I have been concerned about the threat to the maintenance of T Shirt sewing operations in Donegal. I have met the Chairman of the company on five occasions to discuss their future plans. The company made me aware of the international market pressures its T Shirt sewing operations were under and its options to transfer production from Donegal to Morocco, where labour costs are 15% of those in Ireland.

The company consistently maintained that, with the exception of the position in Dungloe, there would be no redundancies before the end of 1998.

Since September the IDA has been engaged in protracted discussions with Fruit of the Loom in an effort to safeguard jobs and resolve all issues relating to grant liabilities arising from prospective job reductions.

The IDA Board is to meet tomorrow to review the outcome of negotiations with the company. I hope that after the IDA meeting the company will make a statement on both its short term and longer term plans for its operations in Donegal. I believe that through such an announcement the company can begin to deal in an open and mature way with its workforce. It should also help to trigger the range of support services which have been held in waiting pending clarification of the company's intentions.

On 16th September, 1998, I established the Donegal Employment Initiative which is intended to focus the efforts of the development agencies upon improving the county's capacity to generate jobs and attract foreign investment. Over the past three months the IDA has conducted over 8 promotional itineraries to Donegal. I have kept in close touch with the progress of the work of the Initiative and met with the Chairman in Letterkenny during the past fortnight to discuss developments.

I am meeting a delegation from the trade unions this evening to discuss the situation.