Close to 200 jobs have been lost at a medical devices manufacturing plant in Co Offaly, it has been confirmed.
Management at the healthcare group Covidien, which is the biggest employer in Tullamore, met unions and staff this afternoon to confirm the job losses.
A spokeswoman for Covidien said a 160 full-time positions would go through an early retirement and voluntary redundancies programme. A further 39 temporary jobs will also be lost over the next few weeks.
She said the decision to cut jobs was linked to declining sales and increased competition from low cost manufacturers for the medical supplies products manufactured in Tullamore. She added that it had exhausted all other actions before announcing the job losses.
Covidien employs 650 people in Tullamore, part of a 42,000-strong global workforce. The Dublin-headquartered company also has operation in Galway and Athlone. It has operated in Ireland for nearly 30 years.
A number of cost cutting measures were recently introduced at the plant, including the loss of overtime and new shift arrangements. However, Siptu branch organiser Frank Jones said that employees were shocked by today's news.
"There's a lot of shock because it came out this morning that there was going to be an announcement and that was the first we had really heard about it. We have been engaging with management as recently as last Friday when there was a meeting and we weren't told anything then. It was only when the news broke through the media that we became aware that job losses were a possibility," he said.
"This is a devastating because Covidien is the biggest employer in the town and so we're all in shock, "he added.
Mr Jones told The Irish Times consultations between unions and management would begin tomorrow.
"Management have told us they envisage people exiting the company by early September so the job losses will be taking effect fairly shortly," he said. "There's every hope that jobs can be saved and that's what we'll be focusing on in our talks with management. Our priority is to get the number of losses down to as low as we can."
Mr Jones said full-time workers are expected to secure a severance package of six weeks pay for every year of service plus the statutory two weeks entitlement.
The New-York listed healthcare group completed the transfer of its place of incorporation from Bermuda to Dublin in June 2009. The company, which is an offshoot of Tyco International, had signalled the move two months earlier when the incoming Obama administration introduced a clampdown on tax havens.
In a statement issued this afternoon, Covidien said it would continue to be a major employer in Tullamore.
"The company has made significant investments to automate key product lines to competitively position the plant for the future. A further investment of approximately €3 million is planned for this year," it said.
Taoiseach Brian Cowen described the losses as “deeply regrettable”.
Mr Cowen said he has spoken to the company’s CEO who assured him that Covidien remain committed to Tullamore.
“The fact is that this industry cannot escape the global downturn…competition from firms based in low cost countries mean that Covidien will not see a return to previous sales volumes.
“This decline in product volume meant that difficult decisions about scaling down the workforce were necessary to help secure the remaining 450 jobs in Tullamore,” he said.
Fine Gael said the IDA must conduct a thorough examination of Covidien's competitiveness problems in order to secure the future of the company in Tullamore.
“Most of Tullamore’s large employers have now been wiped out in just a fewyears. I am deeply disappointed that Covidien, through these redundancies, now joins the list of companies that have laid off huge numbers of staff. It’s extraordinary that the town’s employment base could be hollowed out in this manner," said Olwyn Enright, Fine Gael TD for Laois-Offaly.
The Labour Party described the job losses as "a bitter blow" for the local community.
"This announcement comes just days after we learned that hundreds of jobs were to go at Pfizer plants around the country, and it is difficult to escape the conclusion that the Government's supposed strategy of developing and supporting employment in high end industries like pharmaceuticals, medical devices and IT, is now in disarray," said the party's enterprise spokesman Willie Penrose.
