Fall of one of our former greatest national assets leaves a sour taste

WITH the fiasco of the privatisation of Eircom behind us and talk of the privaitisation of Aer Lingus ahead, the death of one time property tycoon Patrick Gallagher and the demise of the sugar factory in Mallow are a grim reminder that we have lost the old sense of social responsibility.

Without it, we are in dire need of a better way to privatise our national assets.

Gallagher came by money too easily and lost it just as easily. The banks pulled the rug from under him because he was reckless.

Gallagher's father, Matt, who died in 1974, made a fortune in wartime Britain. With his brothers, he formed a labyrinth of building, mining and plant-hire companies. One of the brothers was deaf and the others used him to avoid conscription.

When any of them were called up for military service, the deaf brother would report for induction using the specific brother's name. Being deaf, he was naturally rejected, and nobody outside the family was any the wiser.

If the British had known, they would have considered such behaviour unpatriotic, but the Gallaghers were Irish. It was barely 20 years since the Black and Tans had been rampaging about this country, and most Irish people had had their fill of British patriotism.

Matt Gallagher did, however, have his own sense of native patriotism, or social responsibility.

After the declaration of the Republic in 1949, he returned to Ireland and began building houses in the public and private sector. In the 1950s there was a great deal of housing deprivation in urban Ireland, where several families often lived in the one tenement. He then branched out into pubs, retailing and banking.

In the depressed years of the 1950s, Irish industry did not have much to shout about. The factories throughout the country were in trouble. But there was one shining example on the Irish industrial scene the Irish Sugar Company. Michael J Costello, its managing director, was a kind of national hero.

The Irish sugar industry could be traced back to the immediate aftermath of the Great Famine in 1851, when the Royal Irish Beet-Root Sugar Factory was set up in Mountmellick, but it failed after a decade.

In 1926 a second effort was made to get Irish sugar off the ground with the establishment of the Irish Sugar Manufacturing Company in Carlow. With the onset of the Great Depression, that fell into deep trouble, but Seán Lemass persuaded the Fianna Fáil government to set up Comhlucht Siúicre Éireann to come to the Carlow factory's rescue. Within a year, further factories were set up in Mallow, Thurles and Tuam.

Initially, the skilled workforce came from abroad, but those people were recalled to their own countries at the outbreak of World War II.

Irish workers had to bridge the gap, and they produced most of the country's sugar throughout the war years.

In the 1950s, when many of the country's factories were again in trouble, the sugar company was the flagship of successful Irish industry. It was a unique Irish hybrid. The bureaucrats who ran the semi-State company readily facilitated political intervention, while the successful commercial side was somehow perceived to function in the interest of farmers and the unionised workforce.

The first real economic boom that Irish people enjoyed since before the famine was in the 1960s. Many people had never had it so good.

Matt Gallagher helped to form Taca and to bring other builders, architects, accountants and business people together in a kind of great venture to build a modern Ireland. "Fianna Fáil was good for builders and builders were good for Fianna Fáil," Patrick Gallagher noted. "There was nothing wrong with that." It was lifting people out of the depression of the 1950s, when much of the rest of the world was enjoying boom times. The Irish were an economic aberration, rearing their children for export.

TK Whitaker had the vision to vitalise the country's economy. He put great emphasis on the need for proper education. Jack Lynch and Paddy Hillery introduced educational reforms, but the real catalyst was Donogh O'Malley. He announced the introduction of free secondary education without informing, much less consulting, the Department of Finance.

THE announcement was so popular, that nobody had the guts to go back on it. Patrick Gallagher, who was only a teenager at the time, remembered seeing his father embrace O'Malley in Cruise's Hotel in Limerick. "O'Malley told my father it was a great victory, but could sound the death knell for Fianna Fáil as the younger people would now be educated and their expectations would rise," Gallagher recalled.

In the midst of the Celtic Tiger economy and the role that education has played, it is possible to view O'Malley's gesture as the most important symbolic act in ultimately bringing about the change. The economic boom of the 1960s was not just about bricks and mortar; some industries were making their mark globally.

The Irish Sugar Company was still thriving. After Michael J Costello retired, Dr Tony O'Reilly turned out to be an even greater stellar performer as managing director of both Comhlucht Siúicre Éireann and its successful subsidiary Érin Foods. With the companies flourishing, he moved on to the giant US company Heinz.

Before leaving the Irish Sugar Company, O'Reilly warned there was a great danger that control of the company would fall into foreign hands unless something was done to prevent it.

"There is not the slightest danger," the then finance minister Charles Haughey responded.

"Is the minister aware of the fact that there is grave public disquiet over this, especially among the farmers?" Dr John O'Connell asked.

"There is no such thing," Haughey replied. "There is not a scintilla of public disquiet."

Let's face it. If there wasn't, there should have been in light of what we know now.

In 1987 the Irish Sugar Company gave an interest-free loan of £1 million to four of its executives in order to purchase a share holding in Sugar Distributors.

Eleven months later Irish Sugar bought their shareholding for over £8 million a profit of over £7 million in just 11 months for a mere personal outlay of £10,000 each.

When this disgraceful transaction came to light in September 1991, after the company had been privatised under the name of Greencore PLC, Chris Comerford, the company's chief executive, was persuaded to step down, but not before negotiating a golden handshake worth about £1.5 million for himself. Greencore sold Erin Foods and its subsidiary William Rogers & Company to the US company Campbell Soup of Camden, New Jersey, in 2002 for 27.165 million.

It is not just the workers in what was the Irish Sugar Company who have lost their jobs, but also the farmers and their families who grew the beet, and the truckers, and others who transport the beet to the factory.

The people running the company made sugar of the whole thing.

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