Crane manufacturer Liebherr has said it is re-evaluating what it describes as its dependency on its plant in Killarney, Co Kerry.

The announcement follows a strike by SIPTU members employed at the plant and a 2.5% pay increase awarded to them by the Labour Court.

The company operates Kerry's biggest manufacturing plant, with 670 employees.

In a statement, the company said there was "uncertainty" surrounding the future of the  Killarney container crane operation, as a result of the industrial action.

On Friday, the Labour Court award the 2.5% raise to all employees dating to 2009. The company says this has seriously affected its cost base.

Liebherr said it will pay the claim in return for changes in work practices, but said it was extremely disappointed with the Labour court decision.

One major contract is in serious jeopardy and likely to be lost to a Chinese competitor as a direct result of the recent disruption, sources have said.

The container crane factory, which has been in Killarney for 55 years, has been expanding, and has taken on 150 new employees over the past 18 months.

Average annual pay for a skilled worker in the Killarney plant is €52,000.

The industrial action by the 300 members of SIPTU included a ban on overtime at the factory, which has been operating round the clock to fill orders.

Pickets were placed at the factory on a day when a large group of foreign industrialists were visiting, an action which dismayed company directors.

It is understood the Liebherr family, who have retained strong links with Killarney, were taken aback at the action.

In a strongly-worded statement, Liebherr said it was "most disappointed" with recent developments considering its commitment to Killarney over 55 years.

It also said the owner of the factory was disappointed.

It had always rejected the pay claim because of "negative inflation" since the financial crisis as well as over €70m it had invested in the Killarney operation, including workers pensions.