Rescue of Transtec car plant broadly welcomed

The acquisition of the troubled Transtec car component plant in Derry by the French company Montupet has been welcomed as a much-needed stimulus for the economy of the north-west.

Transtec, which employs 320 people making engine heads for the Ford Motor Company, has received more than £7.5 million sterling (€13.05 million) in grants from the taxpayer in the past 10 years, including almost £3 million from the North's Industrial Development Board.

The company issued a profit warning in September 1998. Dealing in shares was suspended in December 1999 and receivers were called in last March when debts were estimated at more than £129 million. When its cashflow problems first emerged, Transtec's largest shareholder, with a 16 per cent stake in the company, was former British paymaster general, Mr Geoffrey Robinson.

He was forced to resign from the cabinet after it was revealed he had lent then trade secretary and now Northern Ireland Secretary Peter Mandelson £373,000 to buy a house. The company has now been renamed Calcast UK and will benefit from a multi-million pound refurbishment programme.

The factory at Campsie, outside Derry, will continue to supply Ford in Cologne with almost half of its V6 engine volume for the Explorer model.

Montupet set up its operation in Northern Ireland in 1989 in the former De Lorean car plant in Dunmurry, west Belfast, and employs around 850 people. The group makes 80 per cent of cylinder heads for Volvo cars and is a key supplier to Ford.

Among its other customers are the Volkswagen/Audi Group, Citroen, Peugeot, Renault and General Motors. According to outgoing Montupet UK managing director, Mr Nicolas Jeanson, the Northern Ireland operation plays an integral role in the group's global operations.

The Dunmurry plant is currently involved in a major cylinder head development project which will have implications for the automotive components industry. Montupet has earmarked around £3.5 million for the cost of the project, a significant percentage of which will come to the company's Belfast plant.

"Montupet could have located this project anywhere," Mr Jeanson said, "but it chose this plant. The new technology is crucial to the business." An industrial dispute at Montupet's Northern Ireland plant during the summer of 1997 was estimated to have cost the company more than £2 million.

However, Mr Jeanson, who is leaving Dunmurry shortly to return to work for Montupet in France, said there has been a dramatic turnaround in industrial relations since he first arrived at the plant almost two years ago. Mr Uel Adair of the engineering union AEEU welcomed the Transtec takeover. It said the company's workforce should be given credit for consistently meeting production targets over nine months while the cloud of receivership hung over them.

A report commissioned by Foyle Development Organisation recently found that more than 8,000 jobs were needed over the next five years to bring the city into line with average employment levels in Northern Ireland.

Mr Adair said much of the area's problems in recent years had been caused by the decline of the clothing and textiles sector. Until relatively recently it had been central to the local economy.