The Tanaiste and Fruit of the Loom chairman and chief operations officer, Mr Bill Farley, remain deadlocked over the amount of money to be repaid to IDA Ireland in the event of up to 700 job losses in Donegal. IDA Ireland is understood to be immediately recalling up to £6 million in grant aid given to the company because it has failed to create the required number of jobs. Fruit of the Loom would also have to repay a further £5 million to IDA Ireland if it were to axe 700 jobs, as expected, at its Donegal operations next year.
Mr Farley left Dublin yesterday to continue his tour of the group's European operations after a crisis meeting with Ms Harney broke down without conclusion on Sunday night. A spokesman said he has no plans to return to Ireland at this time.
The Tanaiste confirmed yesterday that she is now satisfied that Fruit of the Loom had substantial grant repayment liabilities to IDA Ireland following a review of contracts between the State-agency and the company by her legal advisers.
Responding to the Tanaiste's comments, a Fruit of the Loom spokesman said the company has been in existence for 100 years and has a long history of meeting its commitments. "It intends to do so on this occasion."
The differences between the two sides centre on the exact amount of money that should be repaid in the event of up to 700 redundancies. Fruit of the Loom's interpretation of its liabilities, also based on its legal advice, is understood to differ substantially from that determined by IDA Ireland.
Ms Harney has stressed that she is "satisfied" with the legal position and that monies owed will be sought by IDA Ireland as a matter of course. The State-agency has always sought to recover employment grants to companies which fail to meet its job creation criteria and is required to do so by the Comptroller and Auditor General's office.
The relationship between the Tanaiste, IDA Ireland and Mr Farley is now considerably strained and will make any further negotiations between the various parties very difficult. No further meetings between Ms Harney and Mr Farley have been arranged.
Mr Farley is understood to have been taken aback by Ms Harney's focus on the repayment of employment grants to the State at their last meeting, and was surprised that the discussion was not centred on how to minimise the number of job losses at the company.
Fruit of the Loom has again stressed it has not yet taken any formal decision on the scale of redundancies at any of its Donegal plants. Aside from the central disagreement over the scale of liabilities which Fruit of the Loom must meet, the company is also being asked to consider making generous redundancy payments to workers who are to lose their jobs.
The company, which is losing money at its Irish sewing operations, maintains it does not have the flexibility to make such a commitment.
Mr Farley has given a commitment that there would be no job losses at its Irish operations this year. The company maintains that it has in fact sustained the sewing jobs for a much longer period already than has been economically viable, responding to both Government requests and calls from the Irish-American lobby.
Ms Harney has reiterated her position stating that she wants the maximum number of jobs retained in the Donegal plans. "In the event of redundancies, I want a fair and reasonable severance package negotiated with SIPTU," she said last night.
