Dairygold to axe up to 2,000 jobs

DAIRYGOLD plans to axe up to 2,000 jobs as part of a three-year rationalisation programme, Tánaiste Mary Harney has been told.

Ms Harney was informed of plans to cut two-thirds of the company’s 3,000-strong workforce by the group’s recently appointed chief executive, Jerry Henchy, who met with her in her offices in the past fortnight.

Under the rationalisation programme, Dairygold will:

* Review the future of the company’s four dairy divisions.

* Sell off the beef division.

* Privatise the pig operations.

* Assess the future of CMP Dairies in Cork.

Last year, profits at Dairygold fell from over €25 million to €4m, as the company was forced to pay farmers more for their milk.

In the first major move to cut costs, the group last week informed unions that the transport division, involving 170 workers, is to be privatised.

Mr Henchy is undertaking a root and branch analysis of the group, which could mean the loss of between 1,500 and 2,000 jobs.

The dairy division is also under serious scrutiny, while the beef division is due to be sold off and part of the pig operations privatised.

There is also growing concern for the future of CMP Dairies in Cork, which may be closed as part of the radical cost-saving plan. Mr Henchy’s grandfather was once chairman of that business.

The viability of the co-op’s four dairy processing sites are under review, and a report into their future is due next March.

It is understood that no final decisions will be made about the status of the dairy processing plants until management has had time to consider the implications of what will be a wide-ranging review of the sector and the broader dairy industry.

Management has told unions that it hopes the necessary job reductions can be achieved by early retirement, voluntary redundancies and outsourcing.

Responding to the projected job cuts, regional secretary for SIPTU in the South-West, Gene Mealy, said the figures could “have disastrous consequences for various communities” in the Dairygold region.

But he stressed that no job figures have been mentioned in any discussions held between Dairygold and unions to date.

Dairygold has premises at: Fermoy Road, Mitchelstown, Co Cork; Annabella, Mallow, Co Cork; Longmile Road, Dublin 12; Kinsale Road, Cork City; Galtee Meats Mitchelstown Ltd; Galtee Meats Charleville Ltd; and Galtee Meats Kilbeggan Ltd.

It has 26 retailing outlets across the country in counties Cork, Limerick, Tipperary and Clare.

Meanwhile, the co-op elected John Walsh chairman at the first meeting of the new board in Mallow yesterday.

Seven of the eight outgoing directors of Dairygold Co-op, who sought re-election, were this week returned to the new board. Chairman Denis Cronin did not seek re-election.