The news, when it came from Fruit of the Loom, was as grim as anticipated; the Donegal-based clothing company announced the closure of its factories at Malin, Milford and Raphoe and redundancies at its plant at Buncrana. In all, some 770 jobs will be lost on a phased basis during the first three months of 1999. The company has guaranteed that there will be no additional job losses within its remaining sewing operations in 1999, but there is still considerable apprehension about the company's plans beyond this. And there is a sting in the tail; it appears that the IDA agreed to write-off some outstanding grant-aid in order to secure the job guarantees.
Yesterday's announcement is a devastating blow for the entire north-west region - perhaps the darkest moment since a proud tradition of textile manufacturing was first established by the McCarter family in 1932. At one stage the company, which was taken over by a US multi-national twelve years ago, was one of Ireland's largest employers. For a decade and more, it was something of a jewel in the crown for the IDA; a world class-industry in a traditional unemployment black-spot.
In the end, the Donegal plants could not escape the global trend in the textile industry which has seen all the main players relocate to low-cost locations in Morocco, the Caribbean and elsewhere. A switch to Morocco, where wages are only a fraction of the average £200 per week paid to the workers in Donegal, has clear benefits for a company which has been suffering heavy losses. The developments at Fruit of the Loom have led to demands for a tighter rein on multi-nationals who receive generous grant-aid and then re-locate with little advance notice. The IDA will now recall about £5 million in grants to Fruit of the Loom because of its failure to deliver certain job targets. But, as a quid pro quo for the job guarantees, the company will not now have to repay a considerable amount of grant-aid. In truth, the Tanaiste, Ms Harney, faced an unenviable task as she sought to strike the correct balance between the needs of the workers in Donegal and the more general need to protect the taxpayer.
It is also the case that Fruit of the Loom is something of a special case in our industrial landscape. It is an old-fashioned labour intensive operation of the kind this State used to attract in the Seventies and early Eighties. Today's record level of economic growth has been achieved by the development of high-skilled, high-technology type industries, which have been keen to forge strong links with the community.
For all that, it would be unfair to characterise Fruit of the Loom as just another footloose US multi-national, happy to accept the grants and move on when conditions are less favourable. For a decade and more it made a serious commitment to its Irish operations. In the end, it could not escape the economic facts of life. The challenge now is to find some replacement industry for the region. It will not be easy; access to Donegal remains appalling, a constant supply of electricity cannot even be assured for a heavy energy user and access to the marketplace is difficult. Donegal can yet respond to the challenge; a number of high-class industrial facilities are in place and the workforce at Fruit of the Loom enjoys a good reputation. It is to be hoped that these will help to provide alternative employment as quickly as possible.