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Fruit of the Loom may not repay IDA grants

February 16, 2011

By Staff Reporter

By Andrew Bushe

DUBLIN — Tanaiste Mary Harney has expressed “astonishment” that a firm of lawyers has advised Fruit of the Loom that it is not required to repay grants to the IDA if it moves jobs from Donegal plants to low-cost economies.

The issue has caused a major row between the company and the Irish government.

Harney said she was amazed that doubts had arisen about the grant money in recent weeks.

A legal firm had advised the company’s chairman and chief executive, Bill Farley, that “they don’t owe this money.”

“We find this astonishing because our advice is very clear,” Harney said.

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About 700 jobs are believed to be under threat in the Donegal plants and the IDA is understood to be seeking repayments of over _10 million in grants.

Harney, who is also minister for Enterprise, Employment and Trade, said she wanted the matter resolved and had offered arbitration to the company, but that it had been turned down.

“In the event of there being redundancies, there are commitments that have to be honored,” Harney said. “It’s important that we point that out to the company so that when they are considering their options, they know exactly what their responsibilities are.”

The tanaiste said she has always made it clear that her first priority was to minimize job losses and to negotiate a severance package for those affected. Staff needed to know what their employment prospects were for next year.

She said she had traveled to meet the company in Chicago on three occasions since she took office 15 months ago as she was aware the T-shirts jobs were vulnerable because they can be made for a sixth of the price in Morocco.

Farley, in an interview with RTE, said that he expected that jobs losses would be greater at the Donegal plants as a result of the Sept. 13 meeting when the grants issue led to a breakdown.

“I would say in all candor that there could be more jobs at risk based on that meeting rather than less,” he said.

Farley distanced himself from quotations from an unnamed company spokesman in Ireland who said he was “incensed” after the meeting and that he took the view that the government and the IDA were trying to distract and deflect attention from their failure to provide jobs in Donegal.

“Those are not my words. If a Fruit of the Loom spokesman used those words, they don’t have to be my words,” he said.

He said he was not satisfied with the company’s present relationship with the IDA. “I am concerned about it,” he said, “I felt the tone of the last meeting was more like adversaries and more of a focus on getting the IDA’s grant money back.”

Farley said jobs had been at risk for some time and he was trying to minimize the numbers lost. “This should not be about Bill Farley vs. the government or vs. the IDA; this should be about a cooperative spirit between the IDA and Fruit of the Loom on how to minimize jobs losses in the Donegal area,” he said.

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