A further serious jobs blow was delivered to the north west yesterday with the announcement by Fruit of the Loom that it is to wind down its Irish operations.
The move will result in the loss of 630 jobs in Donegal and Derry over the next four to five years, culminating in the closure of the textile company's plants in the two counties.
While the job losses will be gradual, the news was described locally yesterday as "disastrous" for a region which has suffered a spate of company closures, particularly in the textile industry.
In July, the Unifi polyester manufacturer in Letterkenny, Co Donegal, closed with the loss of 300 jobs. There have also been significant job losses in the industry in Sligo and Leitrim.
The decision announced yesterday by Fruit of the Loom, which makes T-shirts, sweatshirts and underwear, is part of a planned restructuring of its European operations.
Its Irish workforce is engaged in spinning, knitting and dyeing at its factories in Buncrana, Co Donegal and Campsie, Co Derry. Most operations will be relocated to Morocco, where the company already employs 1,700 people.
The Tánaiste and Minister for Enterprise, Trade and Employment, Ms Harney, said the decision was "very disappointing but reflects the fact that the sector is no longer competitive, not just in Ireland, but in this part of the world."
The company, which has been in Ireland for 17 years, blamed high wage and utility costs and changes in World Trade Organisation rules for the relocation.
It said it had attempted over recent years to make its European operations more competitive. One measure had been to consolidate its Republic of Ireland operations into a single site at Buncrana.
However, external pressures, including the decision by the World Trade Organisation to remove quotas on imported products from the Far East, price deflation in the European market and wage and utility inflation in the Republic, had made the decision unavoidable, it said.
"We appreciate that this news will come as a shock to our 630 employees in Derry and Donegal, but we believe it is in everyone's best interest to make this announcement at this early stage."
The company said it would consult with employees and union officials on the detailed phasing of the project and associated redundancy terms.
SIPTU is to meet management tomorrow. It previously negotiated severance packages for 600 Fruit of the Loom workers in Raphoe, 300 in Milford, 250 in Malin Head and 50 in Dungloe.
The union's Donegal branch secretary, Mr Seán Reilly, said the increasing competition from the Far East was a factor in the job losses, but wage inflation was not.
"The workforce here have got the terms of the national wage agreement, no more, no less. The increases are extremely modest," he said.
The Mayor of Derry, Cllr Gearóid Ó hEara, said the announcement was disastrous news for the economy of the north west, and unless the relevant government agencies "rolled up their sleeves", the area could become an "economic disaster zone".
Ms Harney said the priority now must be to continue to attract "sustainable industry consistent with our recent economic performance".
Donegal had demonstrated in the past a capacity to do just that, she said.
"Retraining will be available to all those who will lose their jobs as a result of this announcement."
