The north Cork town of Fermoy was dealt its second major jobs blow in a month yesterday when a French-owned company announced it was to close its plant in the town with the loss of 240 jobs.
The announcement by FCI Ireland, which makes precision electrical connectors for the car industry, comes just a month after heath insurer Bupa Ireland announced that it was to quit the Irish market and close its headquarters in Fermoy with the loss of over 200 jobs.
Yesterday's announcement by FCI Ireland came after local management had briefed staff on the closure which will take place on a phased basis over the next two years.
The operation at the 7,432sq m (80,000sq ft) plant on the Cork Road will finally wind down in December 2008.
FCI Ireland plant manager Colm Hynes told The Irish Times that the decision to close the Fermoy operation was part of a global restructuring by FCI which employed 13,500 people in 30 countries.
He said the company was losing market share in the automotive supply sector and had decided to consolidate its production in fewer locations. It had also been forced into locating production in lower-cost countries to keep pace with its main competitors.
Mr Hynes said most of the work done at the Fermoy plant would be transferred to a factory under construction at Cochin, in southwest India, where labour costs were just 15 per cent of what they were in Ireland.
He said technical staff from the Indian plant had come to Fermoy to be trained for the new operation in Cochin, adding that FCI Ireland would maintain a service and support centre in Fermoy employing 15-20 people.
He said this support centre would oversee the logistics of getting the finished products from the low-cost countries into Europe and their distribution around Europe to a tier of firms who supply car manufacturers with car parts.
Mr Hynes said the phased closure would be determined by business contracts.
However it was envisaged that 70-80 staff would be let go before December, with the remainder being let go between January and October of next year.
Mr Hynes said the decision to close the plant on a phased basis was taken to ensure that the local labour market would not be flooded with jobseekers all looking for work at the same time. It would also give staff a chance to learn new skills in the meantime before seeking jobs elsewhere.
A proposal to close the Fermoy plant was first mooted last April, but the decision was only taken in December, said Mr Hynes, adding that a consultancy group would be set up with employees in the coming days to discuss redundancy terms and other staff needs.
The company began production in Fermoy in 1997 with 40 employees and at its peak employed 380 in 2000. About 50 per cent of staff come from the greater Fermoy area, with the remainder coming from within a 20-mile radius.
Fermoy Enterprise Board chairman Michael Hanley said the closure was a devastating blow to the town.
However the phased nature of the shutdown gave the enterprise board the chance to work with IDA Ireland and Enterprise Ireland to try to find a replacement industry.
"It's a huge blow economically - FCI were very good employers. But it's also a huge blow psychologically - losing a company like FCI with 240 jobs is a much bigger blow psychologically in a rural town like Fermoy than if it happened in a big city."