US medical devices group Cardinal Health took a $100 million (€90.2 million) dividend from its main Irish unit before moving to eliminate more than 300 jobs in Co Offaly.
The disclosure of the huge dividend, paid in January, is likely to sharpen worker demands for a big redundancy package as Cardinal Health enters talks with Siptu.
Cardinal called hundreds of workers to an emergency meeting on Thursday morning, saying the Tullamore plant will close by March 2026 as it moves production to “other facilities within our self-manufacturing network”.
Fianna Fáil MEP Barry Cowen said one product line would be discontinued while the other two would move to Mexico and Costa Rica.
Cardinal’s decision has led to fears of follow-on damage being inflicted on the midlands economy from the loss of a long-established employer, whose monthly wage bill exceeds €1 million.
The redundancies come despite a fivefold increase in profits at the Tullamore plant in the most recent fiscal year for which figures are publicly available.
Official filings for Cardinal Health Ireland Manufacturing Ltd show the annual pretax profit rose to €5 million in the year to June 2023 from €1.1 million the previous year.
The business paid a €10 million dividend in the year to June 2023 to its immediate parent, Cardinal Health Ireland Unlimited Company, which runs the group’s business in Europe, the Middle East and Africa. The ultimate owner of this entity is Cardinal’s US headquarters in Dublin, Ohio.
Accounts signed off five months ago for Cardinal Health Ireland Unlimited Company show it “declared and paid a dividend of $100,000,000” in the first weeks of 2024. That payment followed cash dividends totalling $57.2 million in the year to June 2023.
Cardinal Health did not reply to questions about such dividends and the rising profits of the Tullamore plant. However, the company said “a fair redundancy package” was in place for affected employees.
“This decision is part of our regular assessment of our global business, manufacturing and supply chain operations to ensure we are able to meet the evolving needs of our customers, the industry and our business.”
The accounts for the Co Offaly operation said it “continued to be negatively impacted” by inflation in the cost of commodities and utilities and by supply chain constraints in 2023. “The directors acknowledge that these are ongoing risks and constraints going into 2024.”
The closure was greeted with dismay locally as Minister for Enterprise, Trade and Employment Peter Burke noted how IDA Ireland, the State’s inward investment agency, provided “considerable support” to Cardinal for years.
“We will make every effort to identify alternative employment opportunities for the staff affected by this announcement,” Mr Burke said.
“As a country we are at full employment, with strong demand for medtech and life sciences skills and we will work to help employees impacted to find alternative employment.”
Siptu organiser Ashling Dunne said the redundancies would have “a devastating impact” on workers, their families and the wider community.
“We will meet with management under the statutory 30-day collective redundancy consultation period to explore all alternative options that could reduce the impact of these job losses,” she said.
Despite recent data showing the number of people working in the State rose to a record 2.75 million in the second quarter of the year, the closure has amplified concern about conditions in the medical technology sector.
Siptu, which represents about 280 of the Cardinal workers, noted how the latest redundancies follow the proposed closure of Becton Dickenson’s plant in Co Louth, with the loss of 200 jobs.
“There is a worrying trend of closures in the medical devices manufacturing sector that is resulting in hundreds of job losses,” she added.