Major efforts were made by the State to avert the closure of the Irish Steel plant at Haulbowline, Co Cork, during 1983.
Within weeks of taking office, then minister for industry and energy John Bruton sought government approval in February to allow the company continue to operate until the end of 1983 to ascertain whether the steelworks was still viable.
Bruton asked for £5m immediately to help Irish Steel overcome a cash crisis as well as a further investment of about £20m to meet its operating costs for the year.
Documents show that the company’s bankers had refused to provide any further finance to the company in Jan 1983 and Irish Steel was set to run out of cash the following month.
The minister also tried to find out if electricity and gas costs for the company could be reduced.
He warned unless such measures were taken, Irish Steel would be closed in March with the loss of £60m to the exchequer.
It was estimated the net cost of keeping the facility open during 1983 was between £5m and £9m.
The previous government had given financial assistance worth £65m to Irish Steel in 1982.
A consultant’s report had shown that with an injection of £65.5m and a reduction of 40% in its energy charges combined with a reasonable growth in sales that Irish Steel could be viable.
However, it also advised that Irish Steel should be shut down under its existing cost structure.
Bruton proposed several measures to counteract its large losses including a reconstitution of the company’s board and the reassignment of the executive responsibilities of its chairman, Kevin McCourt to the chief executive, Liam Coughlan, and a more hands-on approach by officials from his department to monitoring Irish Steel’s performance.
In recommending fresh investment, the minister said sales over the previous period were good and ahead of targets, despite falling prices globally.
Bruton proposed the company should be “given another year” although he acknowledged the cost of closure would increase by £25m by its postponement for 12 months.
Cabinet papers show that discussion between Irish Steel and the ESB failed to achieve any significant reduction in the company’s energy costs.
Talks with Bord Gáis were more fruitful, with a gas price reduction worth £200,000 per annum.
In Dec 1983, Bruton noted the Government would soon need to take a final decision about the company’s future. He acknowledged it would require a further £89m investment to keep it viable.
Irish Steel was event-ually sold by the State to Indian tycoon Lakshmi Mittal for £1 in 1995. The plant shut in Jun 2001 with the loss of 450 jobs.
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