Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I thank the Deputy for raising this matter and I share his concerns about the potential risk to jobs in Killarney as a result of this situation. Liebherr is a major international company which was established in 1958 and which employs 670 people in Killarney and a total of 39,000 worldwide.

In addition, it has two hotels employing 200 people. It is estimated that 500 additional local jobs are dependent on the company through supplies services and so on. It is no doubt a very important contributor not only to the Kerry economy but nationally. It has a turnover of €250 million and has been increasing employment in recent years. It is in a key sector exporting cranes globally. Its payroll is €40 million and €30 million is paid to local contractors. It has been investing in the plant - €30 million in the past three years - and has further investment planned in the future. It has put money into the defined benefit pension scheme and has shown very real commitment to the economy.

It is remarkable at a time of heavy losses in manufacturing which have, unfortunately, been a feature of our manufacturing sector, Liebherr continues to grow. While that trend has, thankfully, reversed in manufacturing through our manufacturing strategy, we are seeking to build the manufacturing sector again. None the less, Liebherr is a shining example of what can be achieved. It is a high quality, cutting edge manufacturing plant.

The company has been successful in attracting new orders but it has emphasised over time that it faces global competition. Against this backdrop, it has pointed out that wage levels face a competitive threat with much lower wages in Asia. It also needs to be borne in mind that this company has many plants in other locations and, as has been publicly stated, the company has transferred production of certain parts of its work previously undertaken in Killarney to a plant in Germany. This is clearly a worrying development.

Unfortunately, this plant has had a poor industrial relations record in recent times, unlike the industrial relations landscape generally, and it has impacted. The present dispute relates to a pay increase of 2.5% agreed under the Towards 2016 pay agreement. The company paid phases one and two of the agreement, but with the economic downturn which started in 2008, it felt that given the economic circumstances, it was not in a position to pay the final phase of the agreement.

The dispute around this pay increase has been ongoing for some time and has involved the full range of State industrial relations machinery and independent facilitators. The Labour Court recommendation of late December recommended a 2.5% pay increase to be given to the staff backdated to May 2012 and subject to the union engaging with management in issues regarding ongoing change, work practices, etc. Liebherr management ultimately accepted this recommendation.

Last evening, as the Deputy indicated, SIPTU members, who account for 270 workers out of the total workforce of more than 650, voted to reject the Labour Court recommendation. There is no question that this latest development represents a serious challenge for all involved, with potentially serious outcomes for the company, the workforce and the surrounding area. I urge all parties to take time to reflect and assess the implications of the ballot result and to engage in dialogue, through the appropriate channels, to seek to achieve a long-term and permanent resolution to the problem. The importance of such engagement cannot be overstated.

The Labour Relations Commission will remain in contact with both parties. We have a world class, high technology operation in Killarney which exports its products to all corners of the globe. We need to maintain and, one hopes, expand and embed its operations in this country. We need to maintain such manufacturing operations in this country as they illustrate our industrial capacity. They pave the way for the future investment in these sectors and the development of indigenous spin-off business. Our economic recovery depends on vibrant success stories like Liebherr and I strongly urge all parties involved to consider the full implications of the difficulties which have developed recently.

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