Limerick received a cruel and abrupt introduction to global economic trends yesterday when Moulinex said it would close its household appliance manufacturing operation in the city and make 500 employees redundant.
While workers and politicians expressed dismay, IDA executives said they had seen the decision coming, and predicted more of the same.
"Krups was here so long that we expected it to continue forever," said a worker with 32 years' service. An IDA source said the State had already lost 5,000 similar jobs this year, and was likely to see another 6,000 disappear in 1999.
Moulinex, bought Krups in 1991, said it needed to cut its operations worldwide to stanch losses. It has already laid off 3,100 people in France and Germany.
"Groupe Moulinex has undergone a fundamental recovery programme over the last two years and, with the recent downturn in the Russian and Asian markets, the proposed rationalisation measures are the minimum necessary to underpin the continuing viability of the group," said Mr Francois Carriere, a senior vice-president at the French firm.
Most production jobs at the plant will be terminated within two months, with "lights out" by June next year, the company said.
In April, Moulinex approached the IDA, admitting financial difficulties and indicating it was considering pulling out of the Republic.
As well as the Limerick facility, Moulinex also runs a 250-worker factory in Thurles, which is owned by itself, Glen Dimplex and the Irish Sugar Company.
Later, the Tanaiste, Ms Harney, and the chief executive of IDA Ireland, Mr Kieran McGowan, made an unpublicised trip to Paris in an attempt to persuade Moulinex management to maintain some of its Irish operations. Yesterday, the company said "intense efforts in recent weeks have secured the viability of the GMX plant in Thurles".
The Limerick plant has been a feature of the city's life for 34 years, at one point employing 1,400 people. Krups paid well, was seen as a good employer, and workers there perceived their jobs as stable.
In fact, according to industry analysts, the plant has been losing money for many years.
Limerick formed part of Krups's strategy to break into the price-sensitive North American appliances market. The plan eventually delivered a large volume of US sales, but scant profits.
"Krups was in bad shape. It was a very old-fashioned and badly run company. Moulinex got it and never really put it together," one industry insider said last night.
"This closure could have happened at any time in the last 10 years."
IDA Ireland believes Krups forms part of a low-tech manufacturing sector that is being squeezed by competition from low-wage economies.
Executives made it clear last night that their focus will not be to replace Krups with a similar investor but to help reskill the employees for some of the 5,300 new jobs announced this year so far in the Limerick area.
"The issue really is not so much are the jobs available. It's whether the workers put the effort into reskilling themselves and adapting to modern industry," one source said. A trade union official said the average age of the workers in the plant was 44.