Strike threat at Kyte Powertech

Manufacturing company Kyte Powertech is facing a number of one and two-day work stoppages after staff voted overwhelmingly in favour of industrial action.

Efforts are underway to organise talks between management and workers to prevent any further escalation in the dispute and to resolve the issues.

Despite a number of recommendations from the Workplace Relations Commission (WRC) and the Labour Court, SIPTU workers at the electrical transformer manufacturing plant signalled their rejection of same in the recent ballot. Some 88 per cent of workers voted to reject the WRC and Labour Court recommendations and instead picket the company gates. The firm currently employs more than 430 people. It is the first major upheaval to hit the Cavan Town factory since the management-led buy out of the plant, with the backing of MML Capital Ireland, in June 2020.

In a statement issued to The Anglo-Celt last week, management expressed disappointment at worker’s decision, describing the course of action taken as “regrettable”.

Kyte Powertech has been engaging with SIPTU since October 2021 on negotiating an improvement in terms of pay.

In a memo circulated to staff earlier this year, and seen by The Anglo-Celt, CEO Stephanie Leonard outlined that industrial action “will only have damaging consequences” for sustainability and “ultimately jobs’, and that Kyte may have to consider “further measures” to “protect its interests and to safeguard the business”.

Among the greatest concerns, raised both with staff and also the Labour Court is “accelerated market competition” from low-cost operators in Eastern Europe, India and Turkey.

‘Employees need to understand that there is a constant need to justify Cavan as a sustainable main manufacturing location given the current competitive environment and to justify future investment in our factory,’ reads the memo signed by Ms Leonard, and which was issued pre-ballot.

Noting that there can be “no resolution” against pay demands outside the terms of the Labour Court recommendation, the memo states: ‘It is important that the company convey personally to you the facts of this issue and the potential serious implications for you, employment, the company, and the Cavan factory that we are all so rightly proud of.’

Within the conclusion, Ms Leonard states: ‘This is your job and your decision, if you allow others to make the decision for you - the consequences are still yours.’

It’s understood only 44 staff balloted against seeking permission from SIPTU HQ to strike.

SIPTU organiser, Martin O’Rourke, who previously represented Cavan plant workers around the time of the economic crash, says that “in real terms” with inflation in Ireland up 54% since June of last year and showing no signs of abating, workers are annoyed by what’s on offer.

“This is the truth facing a lot of people. Inflation is hitting close to 10 per cent now. So in a sense the Labour Court recommendation would mean that workers face a seven per cent pay reduction in real terms this year, and possibly next year, because there’s possibly no sign of it coming down. So people don’t want to be tied into any agreement that’ll see their earnings reduced. They don’t believe they’re well paid, and by and large they’re not. I’m not saying they’re the worst paid in Cavan, but there’s none of them millionaires, and they work hard for what they earn,” Mr O’Rourke told the Celt.

He meanwhile criticised the employers nationally for the collapse in social partnership.

“It wasn’t unions or workers who walked away from social partnership, which would have served the country very well. It was the employers, and it was short-sighted. It’s coming back to bite them now. Our members can’t afford to sustain a real term reduction in pay of seven per cent this year, and possibly another next year as well. But in saying that we remain hopeful a resolution can be found.”

Kyte management, who have already accepted the Labour Court recommendation on enhanced terms, despite these “going beyond” what the company was initially prepared to pay, says they remain “available for discussions on any points of clarification”.

The statement from Kyte management to this newspaper said: “Regrettably, the employees have chosen to reject the Labour Court recommendation.

“Given the challenging and uncertain business context, the company cannot afford to further increase labour costs beyond the Labour Court recommendation, which the company views as the only basis for a solution.

“The employees’ rejection of the Labour Court recommendation means, unfortunately, that there is currently no basis for pay increases backdated to January 1st of this year. The employees’ decision to vote for Industrial/Strike Action is regrettable.”

Kyte Powertech rebranded from CG Power in November 2020.

The plant has been manufacturing in Cavan since 1977, established by Pauwels Trafo of Belgium before being acquired in 2005 by CG (Crompton Greaves), part of the Indian-headquartered conglomerate Avantha Group.

Due to financial pressures, in 2018, CG announced it was trying to reduce the plant workforce by at least 50 jobs.

The management buyout lifted the business out of liquidation after parent company, CG Power Systems Belgium NV, subsequently went bankrupt.

MML Growth Capital Partners’ investment was supported by the Ireland Strategic Investment Fund, AIB and a number of international institutional investors.