In spite of conspicuous prior warnings and the "cushions" put in place to soften the blow, the Co Waterford town of Dungarvan was rocked by the news that its oldest industry is to close as a result of the AWG rationalisation plans.
Three generations of Dungarvan people have worked in the Waterford Foods milk-processing plant since its birth as the Dungarvan Co-Operative Creamery in 1920, and its development into the 43-acre industrial complex has been crucial to the development of the town. With its planned closure at the end of next year 130 permanent manufacturing jobs will be lost and the potential for generating local added value from the raw material, milk, produced in abundance around the town will fade.
There was some consolation in the announcement by the AWG deputy managing director, Mr Matt Walsh, that Dungarvan is to be a "key administrative centre" for the restructured group, with the old Waterford Foods headquarters being used as a centre for the wages and salaries side of the group's activities, and possibly for accounts payments. More than 100 jobs will remain in Dungarvan, he said. Agri-trading and farm service activities will continue. But the town's economy will be hard hit by the loss of the industrial wages and also by the slashing of the massive rates contribution, said to be up to £350,000, generated by the Waterford Foods operations. An expected contribution of some £3.5 million by Waterford Foods to the cost of a modern waste treatment plant for Dungarvan will also be lost.
The ATGWU district officer in Dungarvan, Mr Tony Mansfield, said that the closure of the plant "is not, and will not be, accepted". He said it was "an utterly appalling indictment" of the input of the former Waterford Foods senior executives, and their "abject lack of leadership".
A spokesman for Dungarvan Chamber of Commerce, Mr Jim O'Dwyer, said the processing plant had been the backbone of the town. "We would say the town grew around the creamery." The amalgamation with Avonmore was exacting a heavy toll on Dungarvan, in terms of unemployment and the loss of the spin-off multiplier effects of the wage packets on its economy. A huge rates burden would also have to be made up.
The chamber hoped to be very active in regard to any action committee formed to find alternative industries, and might also seek a meeting with the Tanaiste, Ms Mary Harney, to impress on her the urgency of creating a task force with this objective.
The Waterford Fine Gael TD, Austin Deasy, condemned the AWG decision and claimed that the plants in Dungarvan and nearby Kilmeaden had been the most efficient in the group. Dairy products had been manufactured in Dungarvan for centuries, and to close an efficient plant defied explanation.
Mr Deasy said that 75 million gallons of milk were produced in the hinterland of the town and were converted into added value rather than intervention products. To transfer this amount of milk 60 to 80 miles away on a substandard road network was highly illogical, and he asked Ms Harney to intervene immediately.
"Talks of alternative employment ring very hollow with people whose whole life has centred around working in the dairy industry in its traditional home at maximum efficiency," he said. "Milk for processing must stay in Dungarvan and Kilmeaden, in the true spirit of a merger, and not a takeover."
A Fianna Fail TD, Mr Brendan Kenneally, also expressed dismay and said it had confirmed his views that the link-up had been a takeover rather than a merger.
A Labour TD, Mr Brian O'Shea, called on management at AWG to begin immediate negotiations with trade union representatives and said he intended to raise the matter in the Dail.
A Waterford ICMSA spokesman, Mr Tom Cronin, also said it would be counter to common sense to close the Dungarvan plant, which was one of the most modern producers of lactic butter in Europe.
Mr Cronin, who farms near Dungarvan, said: "I think if the closure of Dungarvan was being mentioned at the time of the voting they would have had a different result. It's a disaster as far as I would be concerned, and a lot of farmers would agree with me."
Mr Matt Walsh told a press conference in Waterford, however, that Dungarvan "has gradually become more off-centre for us as the company has developed over the years". He claimed that, in fact, in the new situation, "about 30 per cent of our milk will have less distance to travel in going to Ballyragget than it did in the past coming to Dungarvan".
He said that over an extended period from the early 1990s there had been a "quite inadequate" return on sales and investment in Dungarvan. With the new milk price being paid by AWG to producers, the Dungarvan plant would be returning a deficit. The returns they could get for whey product in Ballyragget, in some instances, was three times what they could get in Dungarvan.
They were confident of achieving the redundancies involved in the closure on an agreed basis. There had already been a high level of interest in the new redundancy package drawn up.
The AWG chairman, Mr Tom Duggan, said that 260 people would still be employed by the group in Co Waterford as a whole, around half of them in Dungarvan.
The group's Snowcream plant on the Dunmore Road outside Waterford would become the liquid milk centre for the south-east, and would double its output, creating some extra jobs.
The Kilmeaden cheese plant will continue to manufacture cheddar cheese on a seasonal basis, but will shed about 24 jobs.
Dungarvan, with a population of about 10,000 in the town and its immediate vicinity, has developed a reasonably strong industrial base in recent years, with Dungarvan Crystal employing about 500 and SmithKline Beecham and Stafford Miller Ireland employing about 300 each. The IDA is also actively seeking an industrial tenant for a 20,000 square foot advance factory built in the town.