Hitting new heights despite the recession
The workforce at the Liebherr Container Cranes Ltd factory in Killarney stands at 607, with a three-cycle shift system in operation to meet the demands of production, which is now at capacity.
The German-owned company, believed to be the longest established multinational in Ireland, has survived recessions, slumps in the international market, three-day weeks, and other difficulties to become one of the country’s most successful manufacturing industries.
Part of the worldwide Liebherr group, which has annual turnover of €8.2bn and 33,400 employees, the Killarney factory is an essential element of the local economy, which largely depends on tourism. Three Liebherr-owned hotels employ an additional 200 people in the area.
The annual wage bill in the sprawling crane factory is €30m, while a large number of suppliers and service providers in Munster also do business with Liebherr, reckoned to be the equivalent of 1,000 jobs.
Average, trade union-negotiated earnings in the plant are in the €45,000 to €50,000 range.
A road in Killarney has been named after the family-owned company’s founder, the late Hans Liebherr. Recently, his daughter, Isolde, who runs the group’s global operations with her brother Willi, was accorded the freedom of Killarney by the town council. She said the company had a long-term commitment to Killarney and to investing in its interests locally.
Planning permission has been obtained for a 16,500sq m expansion — the size of two football pitches — costing €30m.
While the expansion may not necessarily mean more jobs, it is vital for the consolidation of the huge Killarney plant, according to the company. Locally, the development is seen as a vote of confidence in the future and a further sign of the company’s commitment.
Managing director Pat O’Leary said the key ingredients for success included a quality product, loyal customers, astute management, and a dedicated, highly skilled workforce. The company receives orders from all over the world and its cranes are now in 75 ports in 44 countries. The Middle East continues to be the biggest market, but the black Liebherr logo on a yellow background can also be seen in ports in this country, Argentina, Canada, Germany, Italy, the Philippines, Spain, Britain, and the US.
Main competition comes from a Chinese company and there are other competitors who have moved from Europe to China to avail of cheaper labour and lower production costs.
Mr O’Leary said that while Liebherr’s competitors may be cheaper, Killarney was able to produce a better quality crane.
“We win on technical grounds by way of concept, quality, and technical support. The fact that we have 40% repeat business speaks for itself,” he said.
Mr O’Leary, a Killarney native who started working with Liebherr as an electrical engineer 34 years ago, was optimistic about prospects for the future but stressed they would have to continually deal with aggressive competition and cost issues.
“The market is out there but we have to keep control of costs. That’s the key to getting more business.
“One of our big advantages is that Liebherr has the reputation of being a very sound company with an excellent product and customers know that.”
The Killarney plant has annual turnover of €170m, just 2% of the group’s total, but it is of enormous economic importance to the area.
Speaking at the reception for Isolde Liebherr, Killarney mayor Sean Counihan said: “To say that the Liebherr company and family has played a major part in the growth of Killarney’s economy and its surrounding districts is to understate the importance of the company and the name Liebherr to Killarney.”
The plant is run by three directors: Pat O’Leary, who has responsibility for sales, marketing, and design; Rudolf Ganser, on production; and Skender Mirakaj, in finance.
Liebherr has an ongoing apprentice training programme, with 40 apprentices at present. Some of the apprentices may yet rise to senior management positions, as has been the company’s practice.
Over the years, the size of the workforce has varied enormously and hit a low 247 in the mid-1990s. However, from the late 1990s, it experienced a new lease of life and the start of what has been described as a “golden age” which continues.
A member of the Liebherr family was credited with saving the extinction-threatened Southampton soccer club three years ago.
Markus Liebherr, who was not involved in the Liebherr group, became owner of the financially-troubled club for a reported £12m (about €14.7m) to £15m, in 2009. He died in Aug 2010, aged 62.
A son of the late Hans Liebherr, he had run his own company, the Mali group, since 1994. Based in Fribourg, Switzerland, Mali is involved in cutting edge rail and transport technologies and design.
The German-born industrialist took Southampton FC out of administration in July 2009 and immediately invested money aimed at providing the foundations for promotion to the Premier League, which the club has won this year.
Prior to Mr Liebherr taking over, cumulative losses over the previous two years had run to more than £30m, but he made the club financially stable.
His family retains ownership of the club.
The Murphys have a remarkably long service record with Liebherr hotels in Co Kerry, touching on 200 years between them.
Donie Murphy, concierge at The Europe, is the hotel’s longest-serving employee and plans to retire next year after 51 years.
The Millstreet, Co Cork, native started as a commis waiter in 1962. It was a summer job that became permanent and he now wonders where all the years have gone.
“Working at the porter’s desk, you meet hundreds of people and I certainly love that. If you put an effort into your work, you don’t miss time passing and I’ve always enjoyed being with people,” he says.
At this stage, Donie could spend hours listing the names of celebrities, leading politicians and sports stars he has welcomed.
Singers Rod Stewart and Joe Dolan, actors Rex Harrison and Maureen O’Hara, golfers Nick Faldo and the two Christy O’Connors, politicians Charlie McCreevy and Bertie Ahern and the then German president Dr Karl Carstens in 1980, among countless others, he recalls.
His wife, Liz, is accommodation manager at the hotel where she has worked for 36 years.
“Standards are very high in a five-star hotel and the job can be tough at times. You have to be professional in what you do and take pride in your work,” she says.
Liz’s aunt, the late Lily Doyle, was the first person to be employed by Hans Liebherr and worked in the Ard na Sidhe Country House.
Donie Murphy’s brother, John, was head barman in The Europe and retired last year after 50 years.
Another Murphy brother, Tommy, was head barman at The Dunloe where he worked for more than 20 years and where his wife, Mary, was a pastry chef.
The Liebherr company has continuously invested in its three luxurious Kerry hotels, which have a total of 308 bedrooms.
More than €70m was spent on a total refurbishment of The Europe Hotel and Resort in a programme started in 2007.
The group’s other hotels are The Dunloe, with 102 bedrooms, and the 17-bedroom Ard na Sidhe Country House.
Opened in 1961, The Europe was the first of the three. It has since trebled in size and has 187 bedrooms.
Located in an exquisite setting on the shores of Lough Léin, with unrivalled lake and mountain views, The Europe is still the flagship hotel and the venue for many prestigious events.
However, Hans Liebherr, who prioritised the crane factory, did not have major plans for hotels in his early days in Ireland.
The initial idea was to build a guesthouse to entertain customers coming to purchase cranes and 36 bungalows were built on the site to accommodate key personnel in the factory.
However, given that it commands such panoramic views of Killarney’s tourist attractions, the site was readymade for a hotel.
Despite the recession, Michael Brennan, managing director of the three hotels, reports business is up by 15% this year.
“Irish business, in both the leisure and conference sectors, is very good and the US incentive market is up by 50%.”
Sales and marketing director Gerry Browne says advance bookings for 2013 are encouraging. With nightly rates at The Europe in the €110 to €120 range, he says the priority is value, as well as first-class service and access to facilities.
The Ard na Sidhe, which has a four-star grading, has been fully restored, while the next plan is to refurbish The Dunloe, a five-star hotel, which became officially dog-friendly last year.
The Liebherr group also has two hotels in Austria and one in Germany, bringing the group’s total number of hotel bedrooms to 1,450.
Kurt Neher was among 10 workers in a Liebherr factory in Biberach, Germany, to respond to a request to go to Killarney for six weeks in Nov 1959. The skilled men would lend their expertise to the fledgling Kerry plant.
Eight returned to Germany after Christmas and, after two years, just one remained — Kurt, who is now retired and still living in Killarney.
Cupid struck. Kurt, a fitter, was one of at least 12 young German men who met and fell in love with Killarney girls and decided to stay. Kurt met his wife-to-be, Maureen Doolan, at a dance in the Gleneagle Ballroom in 1961.
“After that, I never had any intention of going back again. Irishwomen,” he said, chuckling.
The couple had a family of four: Roland, Karen, Yuri, and Erika. Yuri works as cost control manager in the factory.
Sadly, Maureen is deceased, but Kurt, who was a supervisor in the factory, continues to enjoy Killarney and his game of golf.
“I love the beauty of the place and the people are great. I never felt a foreigner in this country. Liebherr are an outstanding company to work for. There were wonderful years in the factory.”
He takes pride in the fact that his son, Roland, was a star footballer with the local Dr Crokes GAA club for many years.
A friend and compatriot, Willy Steinbeck, came to Killarney from Westphalia in 1968 to work as a commis chef in the Europe Hotel. His plan was to learn English with a view to emigrating to Canada or Australia. However, he quickly learned that love spoke all languages.
Willy was only in Killarney for four weeks when he put his eye on Maureen McCarthy. It was in the Laurels singing pub and his fate was sealed.
They had a family of four and Willy’s career progressed in the Europe, where he became head chef and, later, executive chef.
“I felt at home straight away here. I was accepted and there was no leaving the place.”
The Killarney Liebherr plant was the first to be built by Hans Liebherr outside his native Germany, which probably explains the particular attachment the late Mr Liebherr had, and his family still have, to the Kerry tourist haven.
The opening of what was known locally as “the German factory” at Gortroe on the outskirts of the town paved the way for Liebherr’s global expansion. Today, the group has 120 companies on all continents and 33,400 employees.
The group’s international operations include aircraft parts, mining equipment, and household appliances such as fridges and freezers, as well as cranes.
Jointly managed by brother and sister Willi and Isolde Liebherr, the group continues to be entirely family-owned.
On a recent visit to Killarney, during which she was granted the freedom of the town by the local town council, Ms Liebherr recalled how her father set up the factory in the late 1950s.
“When he arrived in Killarney, he immediately fell in love with the area and he always retained a great affection for Killarney and its people,” she said.
“At that time, he was fortunate to meet some wonderful local people. That was the beginning of friendships which would last for a lifetime.”
His new friends in the area, who included people such as leading local businessman Michael (Mackey) O’Shea, public officials, and local politicians, were hugely supportive in the early years. Despite being busy setting up companies at various locations worldwide, Mr Liebherr enjoyed returning to Killarney.
His five children also visited the area regularly and Ms Liebherr — who will receive an honorary doctorate from University College Cork in the coming days — has fond memories of those days.
“My brothers and I grew to love Killarney, as my father did, an affection which we retain to this day.”
She worked for two years in the Europe Hotel, Killarney, also owned by the family, which gave her a deeper insight into local people and the area.
Ms Liebherr was accompanied at the town council reception by her daughters, Stefanie, Patricia, and Joanna, and Willi’s children, Jan, Sophie, and Philip.
“This is the next generation of the Liebherr family who will lead the company into the future,” she said.
Crucially, she also pledged the company’s long-term commitment to the area. “We are committed to our factory and hotels in Killarney and continue with our policy of investment in buildings and equipment.”
The Killarney factory has been affected by slumps over the years. However, the fact that group is made up of many companies and that it is run by a family is an advantage, she said. “If times are bad and one company is in difficulty, it can be supported by others in the group. We have never closed a factory.”
Another advantage is that the Liebherr group is divided into units of manageable size to ensure closeness to markets and the ability to react to market trends.
Fenit Port, through which the huge cranes are exported, is the factory’s gateway to the world.
The crane components are moved by road from the plant and the final assembly of large beams, which are too long for road transport, also takes place in Fenit.
It takes about 40 truckloads and three weeks to transport the hundreds of components of one crane.
Christy Lucey Transport Ltd, of Ballymakeera, Co Cork, has had the contract since 1968. Christy’s sons, Conor and Jimmy, are now involved in the business. Today, work for Liebherr accounts for 15 jobs in the company and 60% of its business.
In order to avoid traffic, they leave the plant with loads at 4am and arrive at Fenit at about 8.30am.
Road improvements in recent years, including the Hans Liebherr northern relief road in Killarney, have made transport easier. Kerry County Council also works in close consultation with Liebherr in relation to work it undertakes on the Tralee to Fenit road.
Eircom, the ESB, and the gardaí are sometimes involved to ensure safety on the 90km round journey.
In the early days, Liebherr manufactured tower cranes for the construction industry, which were much smaller than today’s cranes.
In the late 1960s, it started to produce the bigger and heavier container cranes which can be seen operating in ports around the world.
Cranes are made to each customer’s specifications and can weigh up to 1,200 tonnes. Some are 87m high at the apex, higher than the spire of St Mary’s Cathedral which towers over Killarney.
Upwards of 23 cranes can be produced in a year. Liebherr has highly skilled teams erecting its cranes on sites around the world and maintaining close contact with customers.
Seeing at first hand the destruction caused by the Second World War in Germany, Hans Liebherr was alive to the opportunities that would be created by a post-war rebuilding programme.
Born in 1915, he grew up in Kirchdorf, a small town in southern Germany. He left school at 13 and started an apprenticeship in his stepfather’s building company, which he took over in 1938 at the age of 23.
He continued work as a building contractor after the war. In 1949, he put into practice an idea that was on his mind for a long time.
He had been working on the design of a crane that could speed up the rebuilding of residential and industrial areas damaged during the war. Liebherr’s plan was to build an affordable tower crane that could be transported quickly and erected easily.
In a little wooden shed, along with blacksmiths and a few other workmen, he built his first 30ft prototype, which he exhibited at the Frankfurt Trade Fair in 1949.
The initial customer reaction was not encouraging but his entrepreneurial spirit persevered. He focused on the advantage that his crane could be erected in a few hours, as against several days for competitors’ cranes, and that led to many orders in 1950.
After 12 months, he had 110 people employed and Liebherr was on his way to global success.
He came to Ireland in 1958 and Liebherr (Ireland) Ltd was registered as a limited company on Apr 11 that year. It was Liebherr’s first foreign subsidiary and a significant stepping stone to an empire which now has a global reach.
Visionaries such as the then tánaiste and minister for industry and commerce Sean Lemass and top civil servant Ken Whittaker were already drafting policies for industrial employment and economic expansion. The attraction of overseas industrial investors became a key priority.
In the grim 1950s, Ireland had its highest emigration rate since the Famine. Liebherr set up here before many other overseas companies which were lured with attractive tax breaks, many of which have since left or have gone out of business.
Throughout his life, Hans Liebherr, described a modest man, expressed his attachment to Killarney which he visited often. He died in 1993.
His grandchildren are now becoming involved at director level in the Liebherr group.
Since its early days in Killarney, the Liebherr factory has prioritised good relations with the local community.
This was highlighted yet again last March when the German company purchased Killarney Golf Club’s third course, Lackabane, for a multimillion-euro sum. The deal will enable the club to pay off its debts of several million euro.
There is a long history of co-operation between the club and the company.
The course surrounds the Liebherr factory on three sides. When the championship-standard course was being designed in the 1990s, the company entered into an arrangement with the club so that the club could use some of Liebherr’s land for the course.
And so it came as no surprise when, by an overwhelming majority at a special meeting on Mar 28, club members approved the sale of the course and a lease back of the property.
The well-known Killarney businessman Tim (Mackey) O’Shea was applauded when he made an impassioned plea to the members to approve the deal. It would not make sense to turn down such an excellent, once-in-a-lifetime offer, especially in a recession, he maintained.
Mr O’Shea, whose family has had close links with Liebherr since the 1950s, described the company as a “fairy godmother willing to pay well over the current market value of the land”.
Negotiations between the club and the German-owned company had been going on for several weeks. The company describes the deal as a “strategic purchase” and says the property will continue as a golf course for the foreseeable future.
However, the deal makes land available to the factory for further expansion and its future needs. Liebherr had previously purchased a strip of land on the course to facilitate a 16,500sq m expansion, for which planning permission has been granted.
Since 1971, the community in Fossa has had the use of a Liebherr-owned field, free of charge.
The field continues to be used by the GAA and other sporting organisations, including Community Games.
The company owns several thousand acres around Killarney, much of it in the Gap of Dunloe area.
LIKE most other parts of Ireland in the 1950s, Killarney was a place where jobs were scarce and prospects few. Emigration was in full flow.
As is the case today, the majority of people in work locally were in tourism, which had a very short season at the time.
Therefore, any chance of year-round industrial employment had to be pursued with vigour. In early 1958, word reached some influential Killarney people that a German industrialist was staying in the town’s Great Southern Hotel.
His name was Hans Liebherr and he wanted to open a factory in an English-speaking base. His plan was to build a plant in Mallow, Co Cork.
However, some influential movers in Killarney saw it as their opportunity. The then chairman of Killarney Urban Council, Teddy Clifford, rounded up some local people — including businessman Michael D (Mackey) O’Shea, council engineer Dan Kavanagh, solicitor Donal Courtney, Fr Bob Murphy, and Michael Tim O’Sullivan — to meet Mr Liebherr for dinner in the hotel.
The group was impressed with his plan to expand his tower crane enterprise to Ireland. The following morning, they brought him to Aghadoe to see the lakes. Livewire Mackey O’Shea then took him to see land close to the lakeshore where he could build a factory.
The lakes and mountains reminded Mr Liebherr of his native area in Germany and he clearly felt at home, beguiled by the beauty of Killarney and the charm of the handful of prominent locals he had met.
Mackey O’Shea would later tell how he suggested to the industrialist: “Why would you bother going to Mallow? Sure you could build here and bring the factory to Killarney.”
Mr Liebherr did not need much persuasion and is reported to have replied: “I’m going no further.” It was hugely important decision for Killarney, which has since been reaping the benefits.
He decided to buy the land, but thought it too beautiful for a factory. That land later became the site on which he built Europe Hotel. For the factory, he bought a 60-acre farm in nearby Gortroe, closer to the town.
The deal was wrapped up in a few days, with Mr Liebherr paying £250 per acre for the land at a time when the going price was £50 per acre.
A short time later, Mr Liebherr ceremonially broke open the fence at the site with a pickaxe and shovel.
On-site work began on St Patrick’s Day, 1958. Working on the national feast day and a Church holy day of obligation led to raised eyebrows locally, but it was the first of many examples of the renowned German work ethic in Killarney.
Mackey O’Shea’s son, Tim, remembers how the head foreman in the building project, a Mr Amman, introduced him to the German way of doing things.
One morning, while the O’Sheas were still asleep over their Main St hardware shop, the doorbell started ringing at 6.30am. After a while, stones began to rattle off the upstairs windows. When they looked out, they saw Mr Amman.
He wanted to buy materials and was taken aback to learn the shop did not open until 9am, pointing out that work started in Germany at 7am. The initial order was for 24 shovels, six wheelbarrows and 60 bags of cement.
After that experience, the O’Sheas had to adapt to opening early, as the doorbell could ring at any time from 6.30am, with Mr Amman ordering supplies for the site.
The building was completed by the end of 1958.
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