Category: Archive

Editorial Doom and Loom

February 16, 2011

By Staff Reporter

It will be a decidedly glum Christmas and an unhappy New Year for hundreds of families in Donegal. The decision by the U.S. clothing manufacturer Fruit of the Loom to close three factories will put 770 people out of work. This will have a devastating ripple effect on the entire economy of the Northwest. With another 700 jobs likely to go by the end of 1999, the outlook is bleak indeed.

Fruit of the Loom, which bought out the McCarter family operations several years ago, made its decision based on sound business, if not humanitarian, concerns. To be sure, it is more profitable to make T-shirts in Morocco, where workers will toil for $50 a week, than in Ireland, where union salaries and benefits have combined with unusually high inflation to make the cost of doing business an increasingly expensive proposition. There are, unfortunately, no easy answers and no quick fixes for the people of Donegal. The McCarters and their paternalism are gone, replaced by a bottom-line board of directors. Those manufacturing jobs too are gone — and they’re not coming back. If one needs a model, recall the bustling factories of the Northeast U.S. that began closing and moving south in the 1960s. Within 20 years, those new factories too were closing and moving to greener pastures — and lower wages — in Mexico and other developing countries.

The plight of Donegal’s Fruit of the Loom workers casts a harsh light on Ireland’s vaunted Celtic Tiger economy. While Dublin and its environs hum along on the back of the high-tech miracle, much of the rest of the country, particularly communities in the Midlands and Northwest, continue to struggle, hemorrhaging jobs and people. This is not unexpected. High-paying high-tech and service jobs put wage pressures on every sector of the economy. Those industries that require less education and specialized skills from their workers will suffer disproportionately in the face of increasing global competition, as the Fruit of the Loom closings reflect.

For several years, Irish governments have enjoyed a free ride from the country’s burgeoning entrepreneurial class. But the Donegal closings indicate just how vulnerable parts of the country remain to global economic pressures. Retraining laid off workers and luring good-paying jobs to long-suffering rural areas remains a challenge unmet — for business and for government.

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