UNION REACTION:THE GUINNESS Staff Union (GSU), which represents the majority of employees affected by the plans to transform brewing operations, said the move represented "very bad news for workers".
General secretary of the GSU Sean Mackell said the union would be totally opposed to compulsory redundancies in the company. The final details of the plan would only be determined following discussions and negotiations with staff.
Mr Mackell said Diageo was trying to give the impression that the announcement was good news for Ireland, when in fact the opposite was the situation.
He said the company had made a profit every year in Ireland since brewing began at the St James's Gate plant in 1759.
"Diageo is investing €650 million, but last year it made €250 million in Ireland. All they are giving back is a minuscule amount compared with the sums taken out of the country over the years," he said.
Meanwhile, Siptu said all the unions at the company would be adopting a centralised approach to try to maximise their negotiating power and to facilitate the movement of staff between the various plants to keep job losses to a minimum.
Siptu branch organiser John Dunne said: "Our other priority is to ensure that any redundancies are voluntary. Obviously the fact that the company expects to generate large profits from disposing of property assets means it will be in a strong position to provide adequate compensation to employees.
"The fact that the new plan will be put in place over a number of years up to 2011/12 provides time to address our concerns," Mr Dunne said.
Siptu said that while members of the union faced the greatest challenge as a result of the plan put forward by management, its members would also suffer significant job losses, particularly in Kilkenny, and to a lesser extent in Dundalk and Dublin.
Meanwhile, employers' group Ibec welcomed the €650 million investment plan announced by Diageo.
Ibec director general Turlough O'Sullivan said it represented the biggest single investment in the history of the Irish food and drink sector and was a massive vote of confidence in Ireland as a location for business, and in Irish workers.
"Today's announcement provides an extremely welcome and crucial boost to the Irish export sector. The scale of investment in cutting-edge technology at its brewing campus makes it clear that Diageo sees Ireland as a global export hub.
"The decision to keep production of Guinness at St James's Gate shows Diageo's dedication to inner-city Dublin and the exciting plans to redevelop the area," Mr O'Sullivan added.