Dairygold ‘cutting jobs to save firm’
Unless that happens much deeper job cuts down the line are in prospect, chief executive Jerry Henchy warned yesterday.
Addressing the Labour Relations Committee (LRC) in Mallow attended also by the union representatives, Mr Henchy said the group has no other option but to wield the axe to save costs.
Falling milk prices and pressures from EU reform among other considerations are forcing the pace of change, he said.
In his submission to the LRC, Mr Henchy repeated the arguments he has previously put to the workforce in various communications over the past few weeks and months.
There is no alternative to the survival plan and costs need to be cut by shedding 500 staff before the end of the year, he said.
Some 1,550 jobs in all are due to go from the group over three years, workers have been told. Of those, 1,000 will be net job losses while a further 500 have gone or will go in plant sales and through the contracting out of the transport division.
The 500 figure was not a negotiating tactic, he said.
“We need to reduce our costs now and this means making 500 staff redundant before the end of the year.”
Mr Henchy described Dairygold as a large ocean liner that has been holed below the water.
Dairygold is close to the “tipping point and if we do not act now, it will be too late and we will not be able to salvage the business and as many sustainable jobs as possible”, he said.
“It is the sad and unfortunate reality of the situation in which we find ourselves. To put it simply, Dairygold is in deep trouble.
“In our last financial year, 2002, we lost €3.4 million on our business operations and our profitability dropped by €20m. Indeed, in our core business of dairy processing we lost €13m last year and projected losses for the coming year are €3m with this figure escalating year on year going forward,” he said.
If action is not taken annual losses for the business will reach €26m in 2007 and that would be a disaster for the group, he said.
