The Irish Exporters Association ( IEA) warn that in the current extremely difficult economic climate , cost reductions on wages, materials imports, government services, and other business services, are now urgently required to ensure survival for many exporters.

The IEA advised that not only will the many companies trading internationally have to use the ‘Inability to pay ’ clause of the Towards 2016 Social Partnership Agreement , but they will have to negotiate wage reductions, as part of their survival plan in these very difficult economic conditions.

The IEA also stated that the Government itself as an employer , is obviously in no position to meet this pay increase and must also plead an ‘inability to pay’, when the first 3.5% pay phase is due to public sector workers.

Liam Shanahan, president of the Irish Exporters Association stated; ‘’Over the past 12 months

• Exchange rate losses have severely hit the profitability of many exporters,
• Bad debts are rising in many international markets as the recession takes it’s toll,
• Business and consumer demand is falling rapidly for a wide range of our exported goods and services ,
• Cash flow is drying up ,
• Labour costs are already too high in Ireland compared to our main trading partners.’’

He went on to say

‘’In these circumstances ,exporters will have to look at all input costs to their business, both wage and non wage .Suppliers from the UK and USA will have to be pushed also to ensure currency related price reductions are passed rapidly onwards. And government departments will have to look again at their fees and charges’’

He further stated;

‘’the Towards 2016 Social Partnership framework, can still be used as a means to regulate the employment framework in Ireland , but it is incapable of responding to major economic crises , such as the one we are now facing. The Irish cost base must be brought down to ensure export industry can continue to sell it’s products and services in these more recessionary times. This must start with our labour cost base. Failure to do so now will accelerate job losses and business closure’’

Liam Shanahan concluded by saying;
‘’The cost of the Public sector is unsustainable , and must be urgently reduced as part of the return to a more cost competitive economy. The Public Sector 5% Benchmarking pay increase implemented on the 1st September this year , and the 8, 600 increase in the public sector employee numbers over the past twelve months , is already putting an unacceptable burden on industry , before the Towards 2016 new pay deal is applied to the sector. Urgent measures must to taken to control these public sector costs, ifwe are to avoid further damage to the economy.’’

END

For further information contact;

Liam Shanahan president of the IEA

OR

John Whelan, CEO
Irish Exporters Association
Mob; 087 9271243, Office 01-6612182

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