Committee Reports > List of Committees > Joint > 1980 > Committee on State Sponsored Bodies > Report No. 16 - Nitrigin Eireann Teoranta

APPENDIX 13

SUBMISSION FROM NET ARKLOW WORKFORCE

Most of the history of NET, Arklow, is well known by now to your Committee and we will not dwell on it, but we just open by re-iterating that the main aim of founding the Company was to manufacture fertilizer, thereby making it available to the agricultural sector at reasonable prices, thus controlling the price of fertilizer, saving on imports and also introducing new technology.

We present this submission on behalf of members of the workforce, both Union and non-Union having contributed to it, to try to influence decisions in the future that may affect the viability of NET, Arklow, and consequently the investment of the workforce. It has to be based on our experiences in the past. If things continue into the future as they have in the past, particularly in the area of decisions that govern major development, we fear our jobs may be in jeopardy. Although the workforce have no input in the decision making process, they must accept job losses if decisions turn out wrong. These decisions are made far above our heads by Management, the Company’s Board of Directors, Government Departments and by the Minister himself, but they affect us and they must be more consistently correct in the future.

In the past projects have failed to meet their specification in terms of cost, date of commissioning, and consequently return on monies invested. For example:—

(a)Marino Point. We do not question the decision to build this plant. In the light of the economic climate around 1973 we see it as a natural development that would have benefited the whole workforce. Having made the decision we then seem to have got our sums wrong. Costs escalated enormously. It did not meet any of its projected time schedules. Having spent large sums we cannot bring it back to the original designer or manufacturer. Due to over optimistic calculations, time scales (on completion) under-estimating, the absence of financial control at top level, and possibly the lack of government investment, we are now saddled with unbearable losses.

We feel we must also point out that the present Plant is improving as is evidenced by the export figures.

(b)Arklow Gypsum. Arklow Gypsum had a similar history, i.e. costs escalating; not coming on stream on time; causing financial strain on parent company.

NET, Arklow, needed the development in Cork to overcome problems that were being created in 1973 by the increase in oil prices and other raw materials, but is now being dragged down by the miscalculations that occurred in the Cork project. It has also been adversely affected by the financial losses of Arklow Gypsum.

The workforce would assume that the projection for Cork envisaged putting the company into a profitable position, thus making available capital for further development in Arklow. The obvious failure of this projection has left no money available for development in Arklow. The last plant built in Arklow was the Nitric Acid in 1975. Due to the go-ahead for Cork and the finance needed for it, planned expansion and consolidation in Arklow was shelved.

We question, very forcibly, the structures from the Minister through his Department, Board of Directors and Senior Management, that allowed these mistakes to be made.

Further we note:

1.The amount of accountability among people concerned in projects that involved vast amounts of money seems to have been non-existent.

Some plants in Arklow in the past have failed to come on stream in the specified time or to deliver the tonnages projected for them until long after commissioning. Had we the proper expertise and experience to evaluate, construct and commission projects of the size we were involved in? It seems evident that projects where we have not involved UHDE and Lurgi who built the original Arklow plant, have been badly constructed and had a lengthy commissioning period.

2.We see the massive investment in proto-type plants as having too high a risk factor for too little return, although conceding that a successful proto-type has great possibilities on the world market, the failure of such investment, i.e. Arklow Gypsum, has helped in placing the Company in its present position.

3.The retention of the manufacture of CCF’s at Arklow is seen as absolutely essential for the following reasons:

Its cessation would remove the only alternative to imported CCF, and this at a time when the Government, Unions and Employers are spending large sums of money urging people to buy Irish in order to retain jobs. The alternative to NET’s CCF is that imported by blenders; and with ever rising prices on world markets the cost of such material would inevitably rise as soon as NET, as an alternative supplier was gone from the market, thereby creating a monopoly situation for the importer. The numbers of people both directly and indirectly employed in the manufacture of CCF’s in Arklow (including Avoca Mines) would see more sense in the Government subsidising Irish CCF products if necessary rather than have these workers join the dole queue.

4.NET’s share of the CCF market has been allowed to decline to its present alarmingly low position. In 1971 NET and Albatros had 72% of the Irish CCF market. In 1979 this share had shrunk to 26%. How has this happened? Were we tethered by government policy?

We feel the Government should examine thoroughly the dumping of cheap fertilizer MAP on the Irish market which makes the Irish product more expensive, and is placing the Irish fertilizer business in the same position as Irish leather, shoe and textile industries with the same disastrous results.

5.On the industrial relations front, we feel the image the Committee may have is erroneous. The credibility of the Company in the industrial relations sphere among the workforce is very low. The power to make decisions must be brought closer to the workforce in order to alleviate the agitating and unnecessary delays which have resulted in stoppages and strikes, culminating in a 19 week prolonged strike by maintenance fitters. As the Committee know, it takes two sides to provoke industrial action. Problems that are delayed have a tendency to frustrate and harden attitudes. The personnel function was not with Personnel Department but lay with line managers. This led to long delays, duplication and triplication of meetings and efforts, and lack of communication. There have been other smaller stoppages and strikes which we feel could have been avoided by a more helpful attitude from the Company. No great effort was made to avoid the long strike in the month immediately preceding the strike. If the original claim had been met the cost to the Company would have been small compared to the final cost of the strike. When decisions are made by Personnel Department they are not vested in a particular person but in a group. There seems to be no responsibility or accountability thus creating dissatisfaction.

Worker Participation

We have four Worker Directors on the Board. There are some structures below Board level, the principal one being a Communications Committee to receive feed back on Board matters from the four Workers Directors, after each meeting.

However, we regard this as but a start to full participation and look forward to the time, in the near future, when we will have representatives on the Board of Management contributing to and influencing decisions that affect the everyday running of our company; that we will have the structures right through the company to support this and that we will get the good will of Management to bring it about.

6.The area of usage of sub-contractors is a constant source of discontent because of the cost that contractors must charge. It is the opinion of the major part of the workforce that contractors and sub-contractors are sometimes unnecessary, undesirable and expensive; many jobs have gone to contractors which we feel should and could have been done within the factory, as instanced by the removal of the CO₂ plant to Marino Point due to internal pressure from the workforce the job was completed by NET, Arklow workers instead of by the sub-contractor, thereby saving a very considerable amount of money. The practice of sub-contracting has grown from a small one into a large problem through the years.

7. An impression seems prevalent in the public minds at present regarding salaries, wages in NET. Any work done by any group within the factory is paid for at the going rate for similar jobs in similar industries. At no time does any shift operator receive treble-time for covering another man’s shift. Claims by outside bodies and the local media are blown out of proportion.

We feel the future of NET, Arklow, is one of hope, that we may learn from the mistakes of the past. With proper leadership, the people are there to do it, that plants are capable of the required budgeted tonnage which can be seen from the example attached (Summary of performance of CCF plant for one year). What is needed is the money necessary to enable the Company to ride out its present financial crisis, an updating of the Equity Capital. We feel this money should have been invested on a one for one basis by the Government during the development of the Cork project and Arklow Gypsum.

A further reason for this financial aid to ensure NET’s future in its present state is the fact that if NET were to close the agricultural sector would be at the mercy of imported fertilizers in price and quality. Such imports would adversely affect this country’s balance of payments, and as can be seen from the balance of payment figures for August 1980 as against 1979 (—£67m Aug ’80, —£140m Aug ’79) exports of chemicals and agricultural products contributed greatly to this much improved figure. Chemicals constitute £13m; of this NET accounted for £2m.

On examination it can be readily seen the increased contribution NET has made to the chemical exports and to the improvement in agricultural exports.

Thanking you for the courtesy of allowing us to present this document to your Committee.

23 September 1980

ATTACHMENT

Summary of performance of CCF Plant from January 1980 to date as reported in Board Documents by the Factory Manager