Conor Lenihan (Dublin South West, Fianna Fail)

IDA Ireland was informed on Wednesday, 11 November 2009 that BERU was announcing the impact of the decision made in June 2009 by BERU Group to transfer the quick-start glow plug line from Tralee to Germany. An announcement was made that afternoon to all staff updating them on the future of the Tralee plant, which will include the likely loss of up to 80 employees at the plant and the timing of the transfer, which is scheduled for February next year.

BERU Manufacturing GmbH was established in Tralee in 1986 by BERU AG, Ludwigsburg, Germany. BERU is now 100% owned by Borg Warner Incorporated, Auburn Hills, Michigan, United States, which purchased a controlling 60% stake in BERU in 2005 and purchased the remaining share in May 2009.

BERU was founded in 1912 and it is one of the leading manufacturers of diesel cold-start systems with an estimated world-wide market share of 40% for glow plugs. In the field of ignition technology for petrol engines, BERU is one of the four major manufacturers in Europe. The electronics and sensors division provides focuses on electronic systems solutions for the automotive industry. The company also produces sensor technology and ignition systems for the oil and gas burner industry.

IDA Ireland approved assistance towards the start-up of the operation in 1986 and a major expansion of the plant in 1999. Employment grew to a peak of 300 people in 2000 and the company currently employs 204 in the manufacture of diesel glow plugs and electronic sensors.

BERU is suffering badly in the current automotive industry downturn. Since the end of 2007, the company has been focusing on reducing costs. It released its results for the period January 2009 to March 2009 on 14 May 2009 and they showed a decline in first-quarter revenues of 38% and a decline in earnings before interest and taxes of 73%. Employment in the group reduced from 2,461 in the first quarter of 2008 to 1,898 currently. The group has closed plants in Hungary and Italy.

In line with the company's cost cutting, the Tralee plant has had to make significant progress in respect of lean implementation and process improvements to strengthen engineering capability. In April 2009, the Tralee plant announced 20 job losses but a visit by the BERU CEO in January confirmed the group's commitment to the plant. However, following the deterioration in revenues and earnings, the group reviewed its production operations which lead to the recent decision.

IDA Ireland is working closely with the company to secure new investments and to protect the remaining 120 jobs. The locations that IDA Ireland is focusing on in Kerry are the national spatial strategy-linked hub locations of Killarney in south Kerry and Tralee in north Kerry.

IDA Ireland's strategy for County Kerry is to work with local authorities and relevant infrastructure and service providers to influence the delivery of appropriate infrastructure to the region; to progress the development of a knowledge economy so that the region can compete both nationally and internationally for foreign direct investment; to work with the existing IDA client base and to help it to further develop its presence; and to provide modern property solutions with supporting infrastructure.

The recognition under the national spatial strategy of the importance of Killarney and Tralee as linked hubs will assist IDA Ireland in promoting the region for inward investment. It will also assist in the development of the necessary critical mass needed in terms of population, skills and infrastructure.

Kerry has traditionally been a centre of manufacturing for foreign direct investment. However, over recent years it has proved challenging to maintain and attract overseas manufacturing companies into the county as much of this investment globally is going to low-cost destinations such as eastern and central Europe and China. As a result of this locational shift in global manufacturing, Kerry has seen a number of closures within the multinational sector. At the end of 2008, there were 15 IDA Ireland-supported companies in Kerry employing approximately 1,798 permanent staff.

IDA Ireland promotes Kerry as part of an integrated region with access to the county population base of 139,616 in addition to the expanded population of both the mid-west and south-west regions with a combined population of 935,039. Based on the strengths of the region, IDA Ireland is particularly targeting the ICT sector, including the software sector, and the international financial services and globally traded business sectors. To support this strategy, IDA Ireland is working closely with educational institutions in the region in developing the skill sets necessary to attract high value added employment to the county. The IDA is also working with FÁS to provide guidance in developing the skill sets needed by those in the workforce who are interested in upskilling.

It continues to market all available land and buildings in the county including its 12 acre business and technology park at Tiemaboul, Killarney, County Kerry. In Tralee, the IDA is also marketing the Kerry Technology Park which is owned and managed by Shannon Development in partnership with the Institute of Technology Tralee.

In addition to attracting new foreign direct investment, the IDA continues to work closely with its existing clients in Kerry to encourage them to expand their operations in the county. An example of this is the recent announcement in September 2008 by Aetna that it is to expand its existing operation with the addition of 70 jobs in Castleisland.

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