The fate of the Verolme Cork Dockyard was sealed more than a year before its closure in 1984 when the government accepted a report by a consultant that it was not commercially viable.
State papers show the government was informed in 1983 that the Dutch- owned shipyard based in Rushbrooke, Co Cork, which employed almost 1,100 staff at the time, had no prospect of securing either foreign or domestic orders due to its low productivity rates and high prices.
The company — which was profitable up to 1978 — suffered as a result of “the worst slump in living memory” which hit the global shipbuilding industry from the mid-1970s.
At a Cabinet meeting in May 1983, John Bruton, the minister for industry and energy, recommended the government not place any more orders with Verolme for patrol or fisheries vessels. Bruton pointed out that both B&I and Irish Shipping had no requirement of new vessels.
Verolme had submitted a survival plan to proceed with two orders for vessels needed by the State which would delay the need to secure foreign orders until early 1984.
While the Department of Fisheries and Forestry did wish to order a new research vessel, Verolme’s original quote had risen from £3m to £7m compared to a rival quote by a Norwegian shipbuilder of £4m.
A Cabinet memo claims foreign orders could only be obtained with massive government subsidies as the dockyard was uncompetitive to the extent of up to 100% of order prices.
“Even if the government were prepared to meet the prohibitive costs of such subsidies, there is no possibility that such aid levels would be permitted by the European Commission,” it noted. It claimed there was no compelling argument for keeping Verolme open either to save jobs or for strategic reasons.
Bruton pointed out that the last time Verolme had won a foreign order was in 1975, at the height of the shipbuilding boom and only then through its Dutch parent company.
He claimed the majority Dutch shareholder had also left the Rushbrooke facility to its own devices in terms of sales, marketing, and technical assistance for many years.
However, the government supported the provision of “delivery incentives” to ensure the timely completion of vessels which it had already ordered in 1980 to assist the shipyard during a crisis caused by a lack of orders. They included a new bulk carrier for Irish Shipping, despite the fact that it cost £29m — twice as much as the price quoted by rival bidders at the time.
Alan Dukes, the finance minister, said the consultant’s report showed Vero-lme’s survival had been solely due to the provision of State orders for ships which were “seriously overpriced and in some cases unnecessary”. Opposing the ordering of a new fisheries vessel, he said it would amount to “a major waste of public funds”.
Liam Kavanagh, the minister for labour, expressed concern that the disclosure of the plans for Verolme’s fate would be managed in a sensitive manner in order to minimise the ill-feeling which already existed among staff towards the company because of the lack of information about the shipyard’s future.
Kavanagh urged the Cabinet to appraise trade union representatives at Verolme of the situation as quickly as possible. He advised his ministerial colleagues that “a very militant stance” could be expected by Verolme staff on the question of redundancy.
However, Peter Barry, the foreign minister, opposed Mr Bruton’s recommendations claiming the difficulties faced by Verolme were by “no means unique” and other countries like the Netherlands and Sweden had provided huge subsidies to their shipbuilding industries. He criticised the consultant’s report for failing to examine in detail its preferred option for Verolme to move to a 50% reliance on ship repair and to concentrate future shipbuilding on offshore supply vessels for which there was a good demand.
He argued such a measure should maintain 75% of the jobs at Rushbrooke.
However, Bruton rem-inded him that the “preferred option” was dependent on the unlikely scenario of Verolme winning new foreign orders.
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