Fruit of the Loom is understood to be close to making a decision on its Donegal-based manufacturing operations, with the number of job losses likely to be greater than 700 people.

Discussions between Fruit of the Loom senior US and European management and IDA Ireland are continuing and the company is expected to inform staff of its decision before Christmas. More than 1,000 staff have now been put on short-time working in a bid to run down company stocks due to a slump in sales in the European market.

A Fruit of the Loom spokesman stressed yesterday that the company has not made any decision in relation to job losses at this point and will immediately inform staff when the discussions with IDA Ireland reach conclusion.

"It is understandable that there will be speculation at this point but any such speculation is not helpful," he stated. "As soon as the process is concluded it will inform the workforce immediately."

The discussions are being conducted in private with both sides undertaking not to disclose the contents to the media. Earlier negotiations broke down in acrimonious circumstances. An IDA spokesman said the current discussion are going very well and progress is being made.

Fruit of the Loom is reviewing its Irish operations. Some 700 jobs at its T-shirt sewing plants are to be transferred to its sister operation in Morocco and there are growing fears that further jobs may also be at stake.

SIPTU regional secretary, Mr George Hunter, has written to Fruit of the Loom chief operations officer, Mr Bill Farley, urging him to inform workers of his decision on job losses and its future operations here.

In his letter, Mr Hunter asked Mr Farley to end the uncertainty for workers in the coming days or else to wait until next spring to make such an announcement. "It's high time they came forward on what's going on," he said yesterday.

The job losses are expected to come into effect early in 1999. SIPTU is keen to establish the company's plans for the Donegal workforce to allow the Task Force set up by the Minister for Enterprise, Trade and Employment, Ms Harney, to establish suitable retraining programmes for the workers to equip them with new skills to find other employment in the locality.

IDA Ireland is working to attract a new project to the Donegal region which could take on some of the Fruit of the Loom employees who are to be laid off. A number of potential companies have visited the region and there is growing optimism that a new employer will be secured in the area. Projects such as a call centre operation are thought to be most likely to set up in Donegal. The financial inducements are highly attractive, with grant aid of more than twice that available in the Dublin area on offer.

Fruit of the Loom's Dungloe plant is due to close at the end of the month with the loss of 50 jobs. The Task Force, which is headed by the Donegal County Manager, Mr Michael McCloone, and comprises representatives of SIPTU, IBEC and IDA Ireland, has already begun to interview these workers with a view to establishing their training needs and suitabilty for other employment.