CG Power Systems management say they have 'turned a corner'

Management at CG Power Systems, based in Cavan Town, say they have “turned a corner in terms of performance” and that problems at their European headquarters in Belgium “will not affect the operation of the Irish plant”, writes Thomas Lyons.
Staff at the factory (formerly known as Pauwel’s Trafo) say they are “seriously concerned” about their future as the company is rumoured to be seeking a buyer for the manufacturing facility.
CG Power is one of the world’s leading engineering corporations, providing end-to-end solutions for the effective and sustainable use of electrical power.
The firm imposed 50 redundancies on staff in 2018. Since the middle of last year, the Indian parent company has been dealing with the fall out from an investigation into accounting irregularities at the company’s head office.
Last week, it was reported that bankruptcy proceedings were initiated at the company’s Belgian subsidiary.
CG Ireland comprises two entities - CG Automation and CG Power Systems. Both are elements of CG’s products for distribution and power transformers, transmission, generation and renewable energy products, as well as industrial switchers.
Sources say the Cavan site has been on the market as a going concern for a number of years, with a buyer almost secured in 2015, but that sale fell through. The Hungarian arm of the business has been up for sale for years.
The situation in Belgium has caused ripples of concern through the company with staff members in the Cavan factory voicing fears. They believe that, as the bankruptcy proceedings progress in mainland Europe, the Irish arm of the company may also go under the hammer.
However there are no indications of a prospective buyer making a concrete offer. The parent company continues to invest in the Cavan factory, which is seen as a viable business with a strong order book.
A statement from the company stated that the difficulties being experienced on mainland Europe should not impact on the Cavan plant: “Two independent directors have been appointed by the Belgian courts to CG Power Systems Belgium NV due to the current financial difficulties being experienced there. Management of the Irish plant have met with these directors and have received assurances that this will not affect the operation of the Irish plant.”
Andrea Flanagan, the human resource manager for the Cavan arm of the company said: “I can inform you CG Power Systems Ireland Limited has turned a corner in terms of performance. We have had some tough years and everyone at CG has fought very hard to reach the position we now find ourselves in. CG is enjoying a full order book, we are investing €4.5M in new machinery over the coming months, and we are now a profitable organisation.
“We have briefed our staff and our priorities for comment and update must always be with our valued employees first, and then to our customers and suppliers.
“We are confident of our future and our loyalties remain with our employees, customers and suppliers to whom we have always completely fulfilled our obligations.”

Staff concerns
Staff say they are “seriously concerned” about the future of the company.
They believe that interested parties are going to appraise the business in the coming weeks.
The staff expressed concerns that, if there is no movement on the sale by mid-February, they face the prospect of the company being liquidated.

 

Union view
SIPTU Cavan District Council Secretary, Denis Sheridan, informed the Celt that the company has discussed the situation at length with union representatives.
“They are all stand alone businesses,” Mr Sheridan explained to The Anglo-Celt.
“SIPTU contacted both our Belgian colleagues and the company. We met with the company and they have been open and transparent in regard to the situation.”
He believes the fallout for CG Global from allegations of accounting irregularities by company founder Gautam Thapar have not been detrimental to the European operation.
“The Belgian company have been haemorrhaging employees over the last number of years because of their financial situation. What has happened in India in the last few months has had no bearing on what is happening in Europe,” Mr Sheridan said.
The union chief believes that the Cavan factory is not in a vulnerable position. “If an offer came in would they sell it? They probably would but it has been for sale for a while. It’s not the first time it has been the subject of a sale.
“The last time due diligence was completed, everything was done, it was only a matter of signing contracts, but it did not go ahead.
“We will continue to make representations on our members’ behalf so we secure the employment of our members in CG Cavan,” Mr Sheridan said.