The decision by Krups to close its factory in Limerick is both typical and untypical of the closures that have affected traditional Irish industries. It is typical because the Limerick operation, like so many others throughout the State, found that similar goods being manufactured in low-cost countries were beating it on price and taking its customers away. It was untypical in that the Asian slump dealt a critical blow and the Russian consumer market, which took a lot of the company's produce, all but collapsed. In Russia, very few consumer products are being bought - at any price.
The closure announcement is a terrible blow for Limerick. A factory in existence for 34 years, in which not a day was lost to an industrial dispute, paying relatively good wages to 500 people, will be no more. But Krups once employed 1,400 in Limerick. The pressure was on for years and not even its acquisition seven years ago by the French giant, Moulinex, could save it. The Krups export base suffered badly early this year when the Asian troubles got a grip. Sales were lost but, more importantly, the Asian currencies tumbled making produce from there far cheaper on the world markets. The Russian implosion sealed its fate. The company's 250 employees in Thurles can consider themselves fortunate.
Krups is not the first Irish company to tumble in response to recent overseas turmoil and it won't be the last. Tarkett in Mullingar, which produces vinyl floor covering, is closing its doors with the loss of over 180 jobs; eighteen months ago it was reporting profits of £5 million a year. Throughout the State, there are plants producing consumer goods for newly-weakened economies whose continued existence is less certain - Fruit of the Loom, Bissell in Drogheda, Atlantic Mills in Longford; even perhaps, Braun in Carlow, a state-ofthe-art facility employing a thousand people. The casualties of this shake-out could include some the biggest and best facilities in the State. Recessions don't recognise reputations.
The Krups closure is a reminder, albeit a painful one, of the downside to the transformation of the Irish economy. It is moving away from labour-intensive, low added-value industry to high-skilled, high-value production. And this is the way it should go. Ultimately, it would be self-defeating to subsidise assembly-line, screwdriver production of low-value when the national objective is, and should be, full employment in high-value industry. The State loses some 5,000 jobs a year from the older industries; next year, because of events overseas, the figure will be higher. The IDA-supported companies create 15,000 jobs a year. The trick is to ensure that the newly-unemployed are trained adequately in the skills required by the newly-arrived.
The outlook for Limerick is encouraging. Yesterday, following the Krups announcement, Dell Computers said it had vacancies for 650 workers. There are another 150 positions open elsewhere and early in the new year there is expected to be at least a thousand new jobs in electronic assembly and other related areas.
The Krups closure is a tragedy but an unavoidable one. The inter-agency task force which has been promised by the Tanaiste, Ms Harney, should concentrate on ensuring that as many as possible of those made redundant can be re-trained quickly so that they can avail of the higher-skilled and higher-paid opportunities in Limerick's industries of the future.