PACKARD'S closure represents the end of a long and often bitter history of cutbacks, strikes and management/union confrontations. The company, owned by General Motors, manufactured electrical harnesses for cars. It' was set up in Ireland over 20 years ago and has received more than £4 million in IDA grant aid.
IDA sources said last night that it had maintained close contact with the company for the last two years, but was surprised the company had decided to close. The IDA will be seeking the return of all liabilities in the event of closure. A spokesman confirmed that this figure was above £2 million.
The industry is constantly being challenged by the entry of producers operating in low wage economies such as Portugal, Tunisia, Turkey and the former eastern bloc countries.
Industry sources said the cost structure in the industry as a whole had been a real threat to the plant during the past two years. Within General Motors there are a number of plants competing against each other for the same business. The only solution was to introduce new technology systems, new work practices and purchasing and this was unsuccessful, according to industry sources.
Ironically, other companies based in Ireland are expanding their operations here. Just last week, the Minister for Enterprise and Employment, Mr Bruton, announced that the Japanese company Alps was setting up a £5 million plant making electrical harnesses in Cork.
The events which led to yesterday's announcement began in December 1994 when workers were asked to accept a number of measures which the company said were vital to its survival. The company said it was losing £75,000 per week and could not guarantee the jobs at the plant after June 1995 unless new productivity measures were introduced.
Packard was seeking stringent cost savings, including a pay freeze to 1997 and a two hour extension of the working week.
The dispute rumbled on and Packard workers rejected the company's demands.
The Tallaght plant received a reprieve when the company said it was willing to keep the company open if a £4 million cost savings target could be met.
In late January 1995, the workers agreed to savings measures including an extra two hours in the working week and a two year pay freeze.
Problems surfaced again in May last year when workers voted to abandon the 41 hour week in a dispute following some 400 layoffs. Last June, the workers agreed a formula to save 800 jobs at the plant when the company agreed to minimise the duration of the lay offs.
But earlier this month workers held a protest over the continuing uncertainty about their future. The workers had been laid off pending a decision on their future, which was due on April 15th. The company delayed the decision which involved either taking the workers back or offering them redundancy.
But that decision came all too quickly for the workers. It will be hard for the IDA to find a replacement for Tallaght which, despite some expansion in recent years, still has a major unemployment problem.