ISPAT International announced plans yesterday to close its Irish plant in Cork, putting 400 people out of work. But the owner of the former Irish Steel company has said it is prepared to consider "any good proposal" as an alternative to closure.
Mr Malay Mukherjee, the chief operating officer of Ispat International, said last night it was willing to talk to other investors, the unions and the company management.
News of the threatened closure brought to almost 1,200 the number of jobs at risk around the country, following announcements by Xerox, Dell, GlaxoSmithKline, Wexford Weaving and Cara this week. Nortel's 3,700 Irish employees are also awaiting news following plans to shed 10,000 jobs globally.
Ispat sources said two European steel-makers, ARBED of Luxembourg and Celsa of Spain had both looked at buying the Haulbowline Island-based plant recently but decided against it.
Workers will meet today to see if the plant and their 400 jobs can be saved. Mr Joe O'Flynn, the regional secretary of SIPTU, said the unions had spent most of the week in discussions with the company and had offered savings worth £2.9 million over the next 21 months. The company was seeking immediate cost savings of £2.3 million.
Mr Mukherjee cited labour costs - which have grown by 40 per cent since Ispat bought Irish Steel in 1996 - as a major factor behind the decision to close the plant. New pollution controls imposed by the Environmental Protection Agency, requiring considerable investment, were also a factor.
Other problems included the high cost of electricity and a decline in the steel market.
The ESB last night disputed Ispat's claim that it paid 30 per cent more for power in Ireland than Germany. "Since deregulation of the [electricity] market, the company had decided to stay with the ESB, which speaks for itself," said a spokesman.
Ispat said yesterday that its Irish operation was losing £750,000 per month. Accumulated losses at the plant since it was bought by Ispat stand at £10 million. The company will seek the appointment of a liquidator at a creditors' meeting scheduled for May 28th.
Mr Mukherjee said last night he believed the operation's debts of £36 million would be covered by its assets if it were wound up. He also highlighted a surplus of £9 million in the company pension fund, which could be used to compensate the workers or as part of a restructuring.
He appeared to hold out the prospect of a rescue, saying the plant could cover its costs if workers agreed the cost-cutting package sought by the management and electricity costs could be reduced.