Dáil Éireann debate -
Thursday, 13 May 1993

Vol. 430 No. 7

Adjournment Debate. - Investment in GPA.

Mr. Cox

I welcome the opportunity to raise this matter and to have a number of matters clarified by the Minister. I welcome also the news today that Guinness Peat Aviation has managed to find at last a strategic ally in the form of General Electric Capital. For a major company which has laboured under a strain for the past 12 months this new arrangement should facilitate GPA in its restructuring process and in meeting its financial commitments to bankers, bond holders and aircraft manufacturers.

The purpose in raising this issue on the Adjournment is to ask the Minister if he is in a position today to reassure the House that, whatever its capital structure, GPA itself will remain an Irish-based company. I remind the Minister that on 23 March last I raised on the Adjournment the proposed State equity injection into GPA by means of the Shannon Free Airport Development Company. At that time the Minister of State at the Department of Enterprise and Employment, Deputy Brennan, confirmed the State's intention to invest such funds and insisted that they would be "emphatically conditional on all other aspects of the recapitalisation programme being put in place". In the light of what has taken place in the past 24 hours, will the State's proposed equity be called up or has that been by-passed by events? It would appear that General Electric has taken an option to buy new shares in the company at a future date. Can the Minister tell the House how such an arrangement would impact on any proposed State share in the company now or in the future?

I note also that through its many associated companies in Shannon, GPA currently has an interest in companies employing up to 750 people, with plans to double that number by 1996. Can the Minister reassure the House that those jobs are soundly based and that the plans for progress will remain? As I said, the news is welcome and I hope the Minister can reassure the House on some of the questions I have raised.

I should have said at the outset that I wish to share my time with Deputy Cullen.

An Leas-Cheann Comhairle

Agreed.

Mr. Cullen

The progressive Democrats welcome the news regarding the interest of General Electric in GPA, which we hope will secure the future of the company.

My concern relates to the bulk of jobs in the associated companies in the Shannon region, in particular Shannon Aerospace Limited, Shannon Engine Support Limited and Shannon Turbine Technologies Limited, in which GPA has shareholdings along with other companies. Is the Minister in a position to indicate the status of those companies in terms of the employment they provide and in terms of the growth that was anticipated within them? The Minister will accept that it is important in terms of such an important Irish company — and we have learned from lessons in the past — that the company should remain Irish-based. We must also ensure if at all possible that the management of the company remains under Irish control, which would be important for future development. It would be unfortunate if this company were to be absorbed totally into General Electric and become married with its operations in the United States.

I welcome whatever comments the Minister may wish to make to reassure the staff involved and also to ensure the potential for growth.

Minister for Enterprise and Employment (Mr. Quinn)

I am aware of today's press reports in relation to a reported agreement between GPA and General Electric Capital Corporation in respect of a $1.35 billion US aircraft transaction and a related option for General Electric to purchase an equity interest of between 65 per cent and 80 per cent of GPA under certain conditions.

On 23 March the Minister of State, Deputy Seamus Brennan indicated on my behalf to the House that funds would be made available to Shannon Development to enable it to participate in the equity issue which was then planned, subject to all other aspects of the then recapitalisation programme being put in place. As of today I have not been formally notified of any proposed changes in relation to GPA's plans nor, I understand, have Shannon Development. I am advised that Shannon Development have indicated they are encouraged by the proposed transaction with GE and that they hope to have discussions with GPA in the light of these developments.

I intend to await the outcome of these discussions. Depending on the nature of any decision taken by the board of Shannon Development I will advise the Government in relation to any proposal which emerges. Clearly in advising the Government in this respect I would have to have regard to the contribution which the GPA group has made to the mid-west region and the country as a whole and to the fact that the company has succeeded in mobilising over £170 million in investment finance in related companies in the Shannon Free Airport zone such as Shannon Aerospace and Shannon Turbine Technologies. These companies currently employ over 750 people at Shannon and this number is planned to reach approximately 1,350 by the year 1996.

In response to the other queries raised by Deputies it would certainly be our intention to ensure in every way possible that the headquarters of the new GPA, if we can call it that, remain in Shannon and that it continues to consolidate Shannon as a major aviation centre. It is very much part of the Government's aviation policy to ensure that the consolidation of aviation related industries in Shannon is supported and encouraged.

At this stage I have very little information other than what has been communicated to individual Deputies, including the leader of the Progressive Democrats, in relation to this matter. I have had meetings indirectly with the chairman and chief executive of SFADCo and they are aware of our position. There has been no formal change in the original position, i.e. the indication that Shannon could take up the GPA rights issue. Our position has not changed since 23 March in relation to that. If the Government is called upon to support GPA in some form, the conditions and standards that were indicated on earlier occasions will apply.

The final position is that we wish to help and consolidate what has been a remarkably successful company, both nationally and internationally, both for its indigenous job creation, to which Deputies Cox and Cullen referred, and also because of the importance of GPA to the country at large.