Belgard staff end protest at VW Ireland

Former staff at troubled motor group Belgard Motors were today seeking answers following Friday's appointment of a provisional liquidator to the Tallaght-based dealer.

Employees held a protest this morning outside Volkswagen Ireland's headquarters in Liffey Valley, Dublin, claiming VW had "shown no brand loyalty" to staff, many of whom had worked for Belgard Motors for some years.

About 20 staff attended the picket, which began at 8am. They ended the action after VW Ireland managing director Paul Willis spoke to representatives.

However, staff said they still seeking answers at to why a rescue plan drawn up by one of the group's former directors could not be implented and allow the dealer to continue selling VW vehicles.

Established in 1969, initially as a print business, Belgard Motors became one of the biggest car dealerships in the Republic in terms of sales. It holds the franchise for Volkswagen, Audi, Mercedes, Mazda brands and was Ireland’s official Porsche dealer.

It employs 82 people, having laid off 37 earlier this year. The group is insolvent with debts of more than €17 million.

Brian Murphy, a former director with the Belgard Motors group, had recently been requested to create a survival plan, and was prepared to invest working capital to refinance the business. Mr Murphy had left the business in 2005.

The survival plan, which had the support of staff, Belgard's main bank and the other franchise operators, would have saved about 55 jobs.

"Going forward with the balance restructured, and the company restructured, that company can survive quite well in a very much shrunken market," he said. "It is also the fact of the matter that the whole of the motor business in Belgard Motors didn't depend just on car sales. The vast bulk of the business was occupying an aftersales business, which is servicing, spare parts and body repairs. There is absolutely no decline in that business. In fact there is an argument to suggest that business has increased."

However, Mr Murphy said the survival plan was based on retaining the VW/Audi franchise, which accounted for 75 per cent of vehicle sales. The company was not viable without it, he said.

Mr Willis told The Irish Times this afternoon that VW had not pulled its franchise from the company. He said as of yesterday afternoon, the agreements had not been terminated although the company was intending to do so. He said he had not seen the proposed rescue plan.

"Many dealers in Ireland are in a very serious situation," he said. "The current level of demand is seriously below last year."

Mr Willis said he was sympathetic to the company's former staff. "I feel very sad for these employees. It's a terrible situation for these people," he said. "However, I have done everything I believe is right and appropriate to support dealers over the past 18 months."

Mr Willis said today that the Irish car market had collapsed and would not support the level of dealers operating in it at present, and warned that more dealer closures were inevitable.

He said VW Ireland would lose money as a result of Belgard Motors' closure, as there was still stock in the showrooms. Deposits that customers had lodged with the dealer for new VW vehicles would be honoured by VW Ireland, he said.

However, Mr Murphy said the company was not going out of business because of the weakness in the car market, although this was having an impact on trade.

He said over-borrowing was partly to blame for the current situation Belgard Motors currently found itself in.

The High Court heard last week the group’s projected turnover for this year was some €27 million, down 56 per cent from €62 million last year and €69 million in 2007. New car sales in 2008 were 1,585 but were just 555 last August, while used car sales dropped from 1,203 in 2008 to 591 last August, the court heard.