Kostal to lay off 300 workers in Cork and Limerick

Three hundred jobs are being axed at a leading motor parts manufacturer, it was confirmed today.

German-owned Kostal Ireland said it was cutting 200 staff at its plant in Abbeyfeale, Co Limerick, and a further 100 workers will be laid off in Mallow, Co Cork in order to reduce costs.

Management insisted it had to make the cuts in order to stay in business in Ireland.

Trade union leaders at Siptu have lined up a series of meetings with Kostal chiefs to discuss long-term plans for the Irish operation.

Karan O'Loughlin, the union's sectoral organiser, urged the Government to step in and assist the country's ailing manufacturing industry.

"Surely the general population must be asking themselves how the economy has fallen so far in such a short time", she said.

"It is only 18 months since the general election, when the Government told people not to trust anybody; that they were the only ones capable of managing the economy. This is the same economy that is now disintegrating around us."

The cuts are the second major blow for Limerick after PC giant Dell slashed its workforce in the city by 1,900 last week. Kostal, which had 1,100 workers on its books at the end of last year, is the largest employer in Mallow.

Despite the job cuts, the company insisted it would press ahead with a €19m investment package for its Irish operations this year.

Michael Genster, Kostal Ireland managing director, blamed the global downturn in the car business and said that the cuts were in line with a drop in sales.

"Kostal regrets having to take the decision to reduce its workforce but unfortunately this decision had to be made with the long term future of Kostal Ireland in mind and in order to ensure that Kostal can continue to operate competitively," Mr Genster said.

It is understood the company are planning to cut employees' hours down to a three-day working week every second week until the end of March as they hold talks to secure the redundancies.

Siptu warned that Kostal, which has had an Irish presence since 1981, had been hit by a 30% drop in orders last year and that there were little signs of an upturn in business in the foreseeable future.

Kostal is a technology leader in a wide range of products for the worldwide automotive industry. Its main customers include Mercedes Benz, BMW, Volkswagen, General Motors, Ford, Volvo, Nissan and Toyota.