Aughinish Alumina looms in the distance like the Emerald City of Oz, except there's nothing green about it. The maze of towering cylinders and bridges is an unexpectedly beautiful dusty pink, tinted by the fine residue of a reddish mineral called bauxite.

The plant was set up in the late 1970s by Canadian multinational Alcan to process bauxite into alumina for export to aluminium smelters. When it opened in 1983, Aughinish was the most expensive single industrial project in the history of the State and promised substantial employment and prosperity for the area.

Those dreams turned rapidly into the kind of nightmare much of Irish industry faced during that decade, with massive overtime bills and running battles between management and union. By 1993, the plant had been losing money for more years than it had been making it and faced closure unless it could cut production costs by $25 a ton.

Management produced a plan. Media reports highlighted the predictable element, a loss of 140 jobs. But the full plan was so radical even the then owners were not fully aware of the extent of what was proposed - partnership and teamwork weren't words in vogue at the time.

But the results have been startling. Every year from 1993 on, production records were broken. The cost reduction target was met by 1996, and today Aughinish has "preferred supplier" status with smelters across Europe. It is a world class operation, producing more than 3,000 tons of alumina per employee per year and competing on an equal footing with the world's largest alumina processing plant, in Queensland, Australia.

Now owned by the Swiss firm Glencore, Aughinish has for the first time an all-Irish management team, led by the managing director, Mr Michael Collins, and has become a resource for other firms on the quest for success.

Visitors are met by Mr Pat Sweeney, the human resource and public relations manager, with three union leaders: Mossie Stack, SIPTU's senior shop steward, John O'Connell, chairman of the AEEU shop steward committee, and Brendan Judge, TEEU shop steward.

They agree it took a crisis to bring about real change, though several people in management had been aware of that need for some time, Mr Sweeney said. "We had a fundamental belief that our workforce, which was highly skilled, could work without supervision and would contribute much more that way."

Some attempts at team training had been undertaken in the 1980s, with little effect. With that lesson behind them, considerable effort was put into preparing the ground, consulting staff and investigating best practice across a range of industries.

The redundancy scheme itself was radical, proposing job cuts across the company. Admittedly, those at management level were not all voluntary. "We were looking for a new way of working," Mr Sweeney said. "Facilitative rather than directive leaders were what we wanted."

Those who opted to stay with Aughinish agreed to restructuring proposals that were implemented virtually overnight. The number of plant managers fell from nine to three. The 53 supervisors of work teams were completely eliminated; instead there are now 13 facilitators, each working with several teams as required.

On the union side, given the history of conflict between workers and supervisors, unsupervised work teams were a positive incentive. Accepting that the bitter relations with management could be put in the past was another matter. When Mr Sweeney said "There was very little trust - zero, really", there was a general nod of agreement.

STAFF from Harvard Business School were brought over to kickstart the process with a residential training programme called "Getting To Yes", aimed at replacing adversarial bargaining with a co-operative negotiating style. Asked what they wanted, unions produced their wish lists. Common conditions - meaning an end to favoured treatment for some employees - and a company-funded sick pay scheme were high on the list.

Annualised hours was a longterm aim and trickier to achieve. Workers were slow to believe the company would pay them for hours they weren't working.

Again, great care went into the groundwork. A joint implementation team was set up to analyse the causes of overtime, anticipate problems and produce solutions. Even at that, it was more than a year before the craft unions voted by a narrow margin to accept the proposals, and another year before SIPTU followed suit.

Pay now includes an extra 450 contracted hours a year which are only worked if necessary, and pensions are based on that rate. It has been a spectacular success; on average, only 7-10 per cent of the contracted hours are worked. "The message is simple," Mr O'Connell said. "The better the plant runs, the more time off we have."

Training and teamwork are constant themes. The work teams didn't need to be supervised, Mr Sweeney says, but they did need training in the mechanics of teamwork: handling conflicts, customer service, listening skills. Teams now operate at every level, monitoring all aspects of the production, including absenteeism and recruitment.

The result has been a complete cultural transformation. During the 1980s an average of 150 grievances were dealt with every year through the normal industrial relations channels, with about 10 per cent of cases ending up in the Labour Court.

Asked about the current rate, the union leaders pondered and came up with "about five" cases in the last few years. "Grievances are now dealt with by the team," Mr Stack said. "If something can't be sorted out there, it goes to a facilitator. But 99.9 per cent are resolved in the team."

A joint Business Performance Improvement Initiative has now been set up. The goal is to find ways to persuade workers to regard the business as if it was their own. Incentives will be an issue, with improved communication and accurate information. These days, that's likely to have an effect.

In the old days, Mr Judge said, it wouldn't have mattered whether the information from management was accurate. "We wouldn't have believed it."