GERMAN-OWNED car component manufacturer Kostal is seeking 300 redundancies from its 1,100-strong Irish workforce at manufacturing plants in Limerick and Cork.
Management at the plants at Abbeyfeale in west Limerick and Mallow in north Cork met staff at 8am yesterday and informed them that they are seeking 200 voluntary redundancies at the Abbeyfeale plant, and 100 at Mallow.
Kostal, which set up operations in Abbeyfeale in 1981, employed more than 1,000 staff there at its peak. It employs 650 in Limerick, while the Mallow plant, established in 2001, employs about 450.
Originally established in 1912 as a producer of insulating material, Kostal entered the automotive market in 1927. Its most important customers include Mercedes Benz, BMW, Volkswagen, General Motors, Ford, Volvo, Nissan and Toyota.
Kostal Ireland managing director Michael Genster cited the global downturn in the motor industry as the reason for the redundancies. He said the move was being taken so that Kostal can continue to operate competitively in Ireland.
“Kostal regrets having to take the decision to reduce its workforce but, unfortunately, this decision had to be made with the long-term future of Kostal Ireland in mind and in order to ensure that Kostal can continue to operate competitively in Ireland,” he said.
“Kostal is wholly committed to the future of both its operations in Ireland, and continues to invest in updating equipment and new product development for both plants,” he continued, adding that the move would not affect the €19 million forecasted investment in the Irish plants in 2009.
Reaction among workers at the Mallow plant was mixed. Some were worried about their future while others were relieved that the factory was being retained. The number of redundancies being sought is fewer than many had feared.
Workers at Kostal have been on short time since December because of the global downturn in business.
It is understood that orders at the company fell by 30 per cent last year, with no immediate improvement in sight as car sales remain sluggish as a consequence of the global credit crunch.
Local Siptu representative John Cooney said that the proposed series of redundancies will take the company up until March. However, workers are concerned that there may be further job losses beyond this point if the global automotive market hasn’t picked up by then.
Opposition politicians called on Minister for Enterprise, Trade and Employment Mary Coughlan to assist the company to ensure that it can continue to operate competitively in Cork and Limerick.
Cork East Labour TD Sean Sherlock said the announcement was further evidence of “serious decline” in the manufacturing sector, particularly in north Cork.
“State agencies must get involved to ensure a viable future for the company, while the National Training Fund must be made available to allow Kostal workers who are to be let go, upskill without loss of benefits,” he said.
