There are fears in Letterkenny that the closure of Unifi, with the loss of nearly 300 jobs, could stifle the town’s rapid growth.
At its peak about five years ago, the firm employed more than
780 people, the equivalent to about 5 per cent of Letterkenny's population.
Local business leaders pointed out yesterday that Unifi’s closure in Letterkenny was the equivalent of a firm which employed 50,000 in Dublin shutting its doors.
It’s like a death in the family,” one worker said yesterday. “We were all numbed when the word was announced. We knew things were not going well, but thought maybe there would be an extended shutdown for the summer holidays. We didn’t really expect it to go completely. The real fear is about getting another job.
Many of those who got laid off last year are still without work. It’s not going to be easy.” Unifi’s growth was in tandem with the expansion of the town.
When Courtaulds set up the original factory in 1976, the town had a population of just over 6,000. Unifi took over in 1984 and at the end of that decade, announced a major expansion programme.
Its workforce grew from just over 300 to almost 800 in the
space of a decade. Meanwhile, the town's population leapt from 10,726 in 1991 to 15,231 by 2002. The annual wage bill exceeded €20 million in recent years and the workforce was drawn from a large part of Donegal – some of the employees making a daily round trip in excess of 100 miles.
The firm was seen as a good employer which paid good wages. However, increasing competition from Asia in the textiles sector combined with rising costs in Ireland led to margins being squeezed. In the year ending June 2001, Unifi’s Irish operations incurred losses before tax of €11.7 million on turnover of €116 million.
Operations were cut back and a series of phased lay-offs followed. In April last year, the firm announced it was shedding 250 jobs. The writing was on the wall.
A leading player behind Unifi's growth in Ireland, Sligo man Mr Brian Parke, was by now president and chief executive officer of Unifi Incorporated. He warned: "Every level of the supply chain is being hit hard as the centre of gravity for the
supply of fabrics and garments moves to Asia."
An internal memo warning of "tough decisions" raised real
doubts for the first time among the workforce about the longterm future of the operations in Letterkenny. Earlier this year, another 120 jobs went and some of the machinery was earmarked for transfer to China. Unifi also closed its dyed yarns facility in Manchester with the loss of 100 jobs.
Production in Letterkenny was consolidated in its more modern plant with the older plant being put up for sale. Donegal’s high dependency on the vulnerable textiles sector has means that it has suffered more than most in recent years.
More than 4,000 textile related jobs have been lost in the county since 1999, is a major reason why it still has an unemployment rate three times the national average.