The deal is particularly important to the economy of the west midlands, writes Barry O'Halloran
IT WILL be business as usual at car parts manufacturer Iralco today after a turbulent three months during which it looked like the company was set to join the long list of Irish manufacturing closures.
The company's 420 workers voted yesterday in favour of a rescue deal put together by Galway-based entrepreneur John Flaherty, owner of CF Tools, saving not just their jobs, but an industry that is particularly important to the west midlands.
Neither side would reveal what CF is paying for Iralco but, under the deal's terms, the car parts manufacturer will become part of Flaherty's group and will be renamed CF Automotive over the coming weeks. Reports have suggested that any rescue plan will involve an investment in the region of €10 million.
Iralco is a strong brand, but is a small player in a big business. It makes decorative trims - the chrome and other metal fittings on bumpers, boots etc - for cars, and in particular for well-known marques such as Ford, Volkswagen, Audi and Volvo.
The company has sales of between €20 million and €30 million. It may be small in global terms, but it's a big part of life in Collinstown, Co Westmeath, a region where it has provided work and helped to spawn other industries for 44 years.
Tom Hyland, a one-time Iralco manager who is due to take over at the helm of CF Automotive, said yesterday that without it, "the west midlands would be an unemployment blackspot".
The deal will involve some pain for the workers. It plans for 20 redundancies, with a further 60 phased in over time if necessary, largely on a voluntary basis. Overtime will be cut and the working week lengthened. However, there will be no pay cuts.
According to Hyland, its key multinational customers are on board and keen to continue doing business with the Irish company, something that would be the central plank of any rescue plan. When it went into liquidation in April, the company had a healthy order book which helped sow the seeds for the rescue deal.
Flaherty is confident that CF Automotive can grow its business. "What we've got is a uniquely skilled workforce that is united behind this," he said yesterday.
He added that there are opportunities for the business and said that, ultimately, it could become the headquarters of an international operation.
Becoming part of CF, which supplies large hi-tech multi-nationals such as EMC, will bring practical benefits.
One is that both work with the same raw materials, essentially sheet metal. Bringing the two together increases buying power and should help cut this cost.Another benefit is that Flaherty, who owns CF with his wife Christina, is keen to maintain and develop manufacturing and value-added activities in Ireland, rather than joining other industries in exporting them to lower-cost countries.
This is a view that resulted in Iralco opening its doors in the first place. Its founder, Franz Pohl, was a German who bought a house in the area, recognised its potential and set up Iralco in 1964.
The business grew from there with help from State agencies such as IDA Ireland along the way. Hopefully, yesterday's deal means that it can get back on that road to growth again.
