The stand-off between Fruit of the Loom, the Tanaiste and IDA Ireland continues with both sides confirming that no meetings are scheduled to discuss the expected loss of 700 jobs in Co Donegal.
Fruit of the Loom chairman and chief operations officer, Mr Bill Farley, has indicated to SIPTU that he will make a decision in relation to the group's Irish T-shirt manufacturing operations in the next couple of weeks. Mr Farley has rejected the Tanaiste's offer of the services of an arbitrator to break the deadlock.
The company is expected to close its T-shirt manufacturing operations in Ireland transferring it to its sister company in Morocco. This would lead to the closure of factories at Malin Head, Milford and Raphoe.
The dispute between both sides centres on the repayment of grants to IDA Ireland and the negotiation of a generous redundancy package for the 700 workers.
IDA Ireland is insisting that such a diminution of its Irish business would incur liabilities of more than £11 million through a clawback of grant aid payments. And while Fruit of the Loom has insisted it will meet its financial commitments, it disputes the scale of its liabilities.
IDA Ireland has issued three grants to Fruit of the Loom since 1988 each of which relates to the company meeting specific job targets. These grants are issued for a 10-year period and once the company meets the terms of the original agreement for its duration any liability ceases.
Fruit of the Loom is understood to be not disputing the repayment of the last grant, issued in 1993 for around £5 million, because of its failure to achieve certain job targets. The discrepancies relate to the repayment of monies issued under the 1988 grant.
IDA Ireland is arguing that while it was issued 10 years ago, the company did not meet its full job targets for up to two years after it began to draw down the funds. It has stated that it is satisfied Fruit of the Loom would have to repay a further £6 million if 700 job losses were announced. Fruit of the Loom has offered to give the three plants to IDA Ireland in part-payment but this is being rejected by the State agency, arguing that their value is negligible.
Industry sources believe some form of a compromise will eventually be brokered.
