The surprise departure of the two Irish directors from Fruit of the Loom has heightened fears for the long-term viability of its Irish operations. The company has already confirmed the closure of the Dungloe sewing plant which employs 48 workers. With a slump in sales in the European leisure wear industry, it appears that other employees may be requested to return to short-time working. More ominously, there is continuing discussion about the relocation of at least part of the company's operations in Donegal, where it employs some 2,500 people, to a low-cost location like Morocco. This would follow the lead taken by the company's US operation, which has already switched much of its production to low-cost locations in the Caribbean. A move to Morocco where average wages are but a fraction of the average £200 per week paid to its workers in Donegal has obvious benefits for the company. For all that, there has been a firm commitment - by the company's directors and local management - to its Irish operations. Fruit of the Loom is in no sense a footloose US multinational which enjoys only the most tenuous and pragmatic links with its host nation. One of Ireland's largest single employers, the company has been in Donegal for almost 12 years since it took over the McCarter family clothing business in Buncrana. Aside from its Donegal plants, it also employs 1,000 people at its highly efficient spinning plant in Derry, which is thought to be the most secure in any rationalisation.
IDA Ireland is reported to be `disappointed' by the latest developments in Donegal; indeed this is probably something of an understatement. For years before the major computer giants moved to this State, Fruit of the Loom was a shining light in the darkness: a substantial feather in the cap of the IDA and, better still, a huge employer in a region which was traditionally ravaged by unemployment and emigration. For all that, both the IDA and the Industrial Development Board in Northern Ireland, mindful of the extreme volatility in the leisure wear sector, have always insisted on a fully integrated operation between the two businesses in Donegal and Derry. The industrial agencies sought to safeguard employment by ensuring that the Derry operation spins the yarn which is later used in Donegal. It may be, however, that time has run out for at least some of the company's operations in the northwest with its T-shirt production plant, which employs some 700 people in Donegal, under particular threat. The group's chairman, Mr Bill Farley, gave a commitment to the Government last October of no job losses until October of this year at the earliest, but no longerterm commitment was forthcoming.
The Government appears to be bracing itself for further bad news. The Tanaiste, Ms Harney, has already met Mr Farley on four separate occasions this year, while the IDA has been requested to draw up contingency plans to deal with the loss of up to 700 jobs at the Donegal plant. With Mr Farley due to visit the Irish operations in the next couple of weeks, the north-west will hold its breath and hope that the company can ride out its current difficulties - without severing any substantial links with Donegal or Derry.