Report urges Guinness tore-examine closure decision

A consultants' analysis of the decision by Guinness last year to close its packaging plant in Dundalk has recommended that the company re-examine the plan.

The Joint Union Forum (JUF), which represents the 300 workers at risk of losing their jobs, has welcomed the report and called on the Tanaiste yesterday to support its request for the company to reverse its proposals.

A spokesman for Guinness said the company was disappointed the report did not raise any alternative solutions. The firm has raised concerns about a number of key issues in the report with the JUF.

However, Mr John King, SIPTU representative with the JUF said: "We believe this analysis vindicates the position we took last year. What happens now depends on what Guinness's objective was last year; if it was to close the plant at all costs it might still seek to do that."

The report A Commercial Assessment of the Decision by Guinness Ireland regarding Dundalk Packaging was drawn up by Clanwilliam Consulting Group.

It concludes that the analysis by Guinness of the cost issue on which the decision to close the packaging plant was made "is incomplete and the data reveal several internal inconsistencies and contradictions".

It also suggests that the cost difference between using Dundalk/Runcorn (in the UK) and Belfast/Runcorn as distribution centres, "becomes negligible" if the Dundalk plant is optimised.

"As this supposed cost difference was one of the key determining factors in the decision to close the Dundalk plant, that decision should now be reconsidered by the company," it says.

The report also says the staff costs, put at £47,000 per head (#59,678) in Dundalk were misrepresented and were in fact £34,500, a difference of 36 per cent.

"It is not clear if this misrepresentation of the staff costs in Dundalk has fed through the entire network analysis and this must be clarified with the company. If it has, then the network analysis is fundamentally flawed. This scenario would greatly reduce the case for the Dundalk closure."

The report concludes: "The optimisation of the Dundalk plant over the medium to long term will better serve the interests of shareholders through improved profitability and reduced exposure to commercial risks."

However, Guinness said yesterday that differences of opinion on the interpretation of some facts remained.