A total of 136 jobs will be lost at the Donegal Shirt Company in the Border town of Lifford when the factory closes at the end of February. Making the announcement yesterday, Austin Reed, the English-based parent company, said it regretted the closure and had been unable to find a buyer for the factory.
The Minister for Tourism, Dr McDaid, described the closure of the company as "another bombshell" for Donegal. He also indicated that more closures were likely in the textile sector.
The announcement was made just weeks after Fruit of the Loom said it would lay off 770 workers in the county before April. It came as the first major initiative to help Fruit of the Loom workers find alternative employment was being presented.
An Austin Reed spokesman, Mr Colin Evans, said the closure was due to competition from low-cost countries and the impact of the strong pound sterling on exports. "It has been hit by a double whammy," he said.
Austin Reed, which has been in Lifford since 1967, makes high-quality shirts, and it is only recently that competition from low-cost countries has affected this end of the textile market. The company recently closed a small plant in Yorkshire.
The regional secretary of SIPTU, Mr George Hunter, said workers were taken totally by surprise when the announcement was made yesterday morning.
"There is great disappointment at the news, especially given that it is coming on top of all the bad news we have already had," he added. Workers at the factory had been temporarily laid off on December 17th and only returned yesterday. They said they were stunned by the announcement.
Mr Hugo McDermott, who has worked at the factory for 27 years and whose wife is also on the staff, said the news had not yet sunk in.
"We got the bad news first thing this morning and we are still in shock at this stage. There are the two of us there, so I don't know what we are going to do," he said.
Mr McDermott, a father of two, said unemployment was already high in the area and he believed it would be very difficult to find another job.
He said the Government would have to provide retraining for the staff. "I worked there for 27 years and I don't know anything else. We will have to retrain because our type of work has gone to these other countries."
Yesterday's announcement came as Dr McDaid, in Letterkenny, presented the first major initiative to help Fruit of the Loom workers find alternative employment. CERT, the State tourism training agency, will invest £500,000 to retrain employees for jobs in the tourism and hospitality sector.
He said more closures were likely in the textile sector due to competition from low-cost locations such as the Far East. "Austin Reed or Fruit of the Loom will not be the last to close. This is happening all over the country, and all over Europe."
Dr McDaid said the Donegal Employment Initiative, set up by the Government in response to the Fruit of the Loom crisis, would also now take into account the needs of the Donegal Shirt Company workers. He confirmed that CERT retraining would be available to them.
He said it made sense to look to tourism for alternative employment as there were up to 3,600 job vacancies in the sector throughout the State, and more than 1,000 of these were in the north-west. He accepted the industry had an image problem to overcome.
Dr McDaid said he was confident alternative industry would be brought to Donegal in the coming months and the telecommunications and pharmaceutical sectors were being targeted.
The perception that the county was isolated was not justified. It had huge potential, with the availability of a highly-skilled young workforce, he said.
It was important to see the north-west as a region, and this would include Derry, the island's fourth-largest city, with its airport and education establishments. The development of Derry City Airport was crucial.
"We have the capability to provide the factors that are necessary to attract industry into this county. It is not all doom and gloom for Donegal. There is a brighter future," Dr McDaid added.
Cert's chief executive, Mr Shaun Quinn, said people who availed of the training could be sure of getting jobs because of the skills shortage in the tourism industry.
A range of training programmes, provided in up to nine locations, will offer full-time 13-week courses geared towards jobs in hotels, restaurants and guesthouses, a "start-your-own-business" course, on-the-job training, and advanced training in the Tourism College in Killybegs.
The Donegal Employment Initiative, along with FAS, will meet Fruit of the Loom employees in factories in Malin, Milford and Raphoe later this week to carry out a skills analysis. The three plants will be closed on a phased basis before April.
Mr Michael McLoone, county manager and chairman of the Donegal Employment Initiative, described the CERT training as a very important initiative.
He said his task force had identified fundamental weaknesses in the Donegal economy. Some 45 per cent of industrial jobs were in textiles, and there was a low percentage of employees in the skilled or semi-skilled category. Only 4 per cent of third-level graduates stayed in the county.
Mr McLoone said he appreciated the fact that the problems in Donegal were being taken so seriously by the Government. It is expected that the Donegal Employment Initiative will make its recommendations in the middle of February.