The Geneva-based owner of an aluminium plant in Co Wexford which manufactures radiators for the European motor industry has announced that it will close in July with a loss of 150 jobs. It is claimed that high costs have made production in Ireland uncompetitive.
The decision to close the Wexal Factory on the Dublin Road, Enniscorthy, which has been in operation since 1977, was taken by the parent company Alcoa Europe at an extraordinary general meeting on Wednesday.
The workforce was informed of the closure plan yesterday afternoon and reacted with shock despite earlier indications of trouble in March when 35 employees were temporarily laid off due to a slowdown in orders.
The closure was described as a "devastating blow" to the town by local Fianna Fail TD Mr John Browne, who said he had spoken to the Taoiseach about the matter yesterday.
Wexal's managing director, Mr Patrick d'Helst, cited high production costs as a factor. "Ireland is becoming a much more expensive place to produce for a labour-intensive industry and inflation is higher here than in countries like Denmark and France where our competitors operate. We are not alone in this situation and we will see more of it in the future."
Six weeks ago, one of Wexal's biggest customers, the giant Valeo Radiator Manufacturing Company in France, tried to negotiate price reductions and failed to renew a major order. Mr d'Helst said Valeo sought to reduce costs but the Enniscorthy firm could not cut its prices because workers were due pay rises of 7 per cent under national wage agreements while the equivalent for their Danish rivals was just 2 per cent.
"Our costs have gone up more than those of our Danish and French competitors," he said. He also blamed the recent downturn in European car sales. He said car manufacturers across the EU had experienced a sudden drop in sales and instead of the 2 per cent growth forecast there had been a drop of more than 5 per cent, leading to a reduced demand for radiators and other parts.
Mr Browne said Mr Ahern had contacted both the IDA and Enterprise Ireland to ask them to seek a replacement industry immediately. The two agencies are expected to meet representatives of Enniscorthy Urban District Council and local business leaders early next week.
He had also asked the Taoiseach to consider setting up a task force to address the need for new industry. One option for the Wexal plant might be a management buyout. At the very least it was hoped the vacated plant would be available to potential new employers.