Limerick firm closes suddenly with 117 lay-offs

A mid-west town lost one of its major industries yesterday when an engineering firm employing 117 staff closed suddenly.

Staff arriving for work at Diamond Engineering, Kilmallock, Co Limerick, found its front gates locked after the company, a staple of the local economy for 18 years, unexpectedly went into liquidation. Management said unsustainable cost increases and a backlog of insurance claims had driven the business under.

The lay-offs came as Dublin Institute of Technology (DIT) announced it was letting 84 part- time lecturers go in a bid to trim nearly €1 million off its wages bill. It was also reported last night that Blanchardstown-based electronics group Teradyne would let 100 workers go.

DIT said the cuts - equivalent to 23 full-time positions - have been forced by new Government regulations improving pay and conditions of part-time academics, which have prompted a 30 per cent increase in wages.

The closure of Diamond is a surprise as it produced pressure vessels for the pharmaceuticals sector, one of the few areas of the economy to have shrugged off the economic downturn.

Union representatives said workers had no inkling the manufacturer was in so perilous a position and were shocked at the suddenness of the firm's demise.

Managing director Mr Seamus Buckley said wage inflation, climbing overheads and the crippling insurance charges had sent Diamond to the wall. He said: "The simple fact is that the business just couldn't keep its head above the water any longer. The economy took a downturn at the very worst moment for us. We did everything we could to keep things going."

There is little hope of Diamond emerging from liquidation as a going concern, says Mr Buckley. He will seek to have Ernst & Young appointed liquidator at a creditors' meeting in early August.

It is understood the cost of discharging insurance claims, which the firm was saddled with following the collapse two years ago of British-based Independent Insurance, hastened its closure. Accounts filed for 2001 show a €1.7 million loss after tax, compared with a €438,347 profit the previous year.

Because of Diamond's precarious finances, staff can only expect to receive statutory redundancy and back-pay. Severance details will be discussed by management and union representatives of SIPTU on Monday.

"Workers were shocked. They didn't see this coming," said Mr Tony Lowe, SIPTU branch secretary, Limerick. Local politicians urged the Tánaiste, Ms Harney, to intervene and help staff find alternative employment.

Ms Jan O'Sullivan, Labour TD for Limerick East, said: "This is a terrible blow for Limerick and the mid-west, coming at a time when a job is now being lost every 15 minutes.

"The Tánaiste and her colleagues are sleep-walking us into a jobs crisis and ignoring the pressures on employers, which are causing so many jobs to be lost.

"Ireland is now a high-cost, high-inflation, high-prices economy. The inflation rate is still at twice the European average, thanks to the Government's inflationary policies. Industry is operating from a very high cost base and Government policy is doing nothing to address this," she added.

DIT says most of the lecturers to be let go worked less than six hours a week and taught part-time night classes. The institute is considering holding certain specialist night-time courses on a two-year instead of one-year basis to cope with the cuts.