INDUSTRIAL DIAMOND company Element Six is closing its manufacturing and distribution unit in Shannon, a move that will lead to the elimination of 370 jobs.
The redundancies from the company, which says the Shannon operation was the most expensive in its global manufacturing network, are in addition to 200 job cuts in the past 12 months.
The Shannon business is one of several international plants operated by the company in China, Germany, the Netherlands, South Africa, Sweden and Britain.
Staff heard the news at a “special business briefing” meeting at 10am yesterday. The development was worse than expected. Many workers feared that 150 jobs were under threat at the company, formerly known as De Beers Industrial Diamonds.
Only 80 jobs will remain in the operation, which is now set to concentrate on research and development and customer services.
“This decision is the result of a comprehensive strategic review of Element Six’s global manufacturing operations to improve cost competitiveness and secure the Group’s long–term future,” the company said.
“The Shannon operation is the highest cost manufacturing site in the Element Six Group. Despite a series of cost reduction programmes in the past few years, continued production at the Shannon site is no longer sustainable or viable, and the primary business it serves is loss-making.
“The current economic downturn has simply served to exacerbate these challenges.
“This is a highly regrettable decision for Element Six and a number of alternatives were considered at length.”
Management at Element Six will commence the process of winding down the manufacturing and distribution operations to effect closure by the end of the year. Last December, the company cut its workforce by 150 through a voluntary redundancy scheme.
The Shannon plant has been operating at 40 per cent capacity in recent times, compared with the last year.
In June, Element Six general manager Ken O’Sullivan said he could not rule out further redundancies. “We want to retain what we have,” he said then.
Tánaiste Mary Coughlan expressed regret at the decision, stating that everything possible would be done to help those who lose their jobs.
However, Opposition parties said the development flowed from the Government’s failure to tackle business costs.
“For years this Government has failed to stop the loss of manufacturing jobs from this country,” said Clare Fine Gael TD Pat Breen.
“The fact is that Ireland’s competitiveness has declined significantly in recent years and they have taken no action to address the cost of doing business here.”
Chris O’Donovan, mid-west regional director of the employers’ body Ibec, said the development underlined the importance of restoring Ireland’s competitiveness.
“This closure shows the consequences for jobs in Ireland if we do not bring business costs down and into line with competing economies,” he said.