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Dáil Éireann debate -
Thursday, 5 Feb 1998

Vol. 486 No. 5

Adjournment Debate. - Proposed Sale of TEAM Aer Lingus.

I thank the Ceann Comhairle for allowing this matter to be taken today. Special notice questions were tabled in respect of it but they were disallowed. Therefore, I sought to raise it on the Adjournment.

This issue arises from media and other reports of a meeting of the board of Aer Lingus on Monday last. It is alleged that, in the course of a wide-ranging debate, the different options in respect of the future ownership of Aer Lingus and its subsidiary, TEAM, were discussed. In the context of any future strategic alliance on the part of Aer Lingus, it was strongly suggested that the company has no future while TEAM remains on its balance sheet because no one would be interested in such an alliance on those terms. Be that true or otherwise, the discussion developed into dealing with the various scenarios regarding what might happen to TEAM if the deal was rejected by the unions or other interests. In that context, it was stated that a loan was advanced from the parent company, Aer Lingus, to TEAM of £65 million in 1995 which is reviewable at the beginning of this year. In the context of this review, it was allegedly suggested that this loan might not be continued. Without the loan, the finances of TEAM — which has been placed on a viability route and has made good progress — would be put in jeopardy. Examinership or receivership would be a direct consequence of the forfeiture or withdrawal of this loan.

The purpose of this Adjournment debate is to clarify if there is a threat of the £65 million being withdrawn if the deal is rejected. Is the Government in a position to dismiss that assertion, state that it is utterly without foundation and that there is no linkage between a dated review of the capital and the proposed sale? It would be very serious if such a threat existed or if the proposed sale to FLS Aviation were to lead to redundancies through closure of TEAM.

The Minister for Public Enterprise stated that there must be worker concurrence for the deal, in respect of which Mr. Gerry Durkan has been appointed as facilitator, to proceed. Does this mean that all 1,200 workers and all the unions involved must accept the deal or does it mean that a majority of either the unions or the workforce must accept it? In other words, the term "worker concurrence" is subjective and may cause difficulties. If there is an effective veto of the deal by the workers, the Government must state its position clearly.

The Minister's handling of this issue shows her to have one eye on self-preservation and the other on the Dublin North by-election. It is time the Government stated its exact position on this matter. It cannot take a neutral stance or remain on the fence. As the shareholder, the Government either supports or opposes the deal. It cannot pretend that there is no formal proposal and that it does not know what is happening.

The Minister stated that she does not know what happened at the board meeting. She also indicated that she is unaware of the current situation because a formal proposition has not been put to her. I suggest she has a meeting with the chairman, Mr. Bernie Cahill. Will she look at her relationship with the board because it, including the chairman, acts to represent her interest? She is the sole shareholder as the appropriate member of Government and it would be normal, if not prudent, that the relationship between the Minister and the board should be such that she knows what is going on and that she makes it her business to know whether there is such a threat. It is about time we had realistic, forthright and straight answers to such complex issues.

My understanding is that we have an FLS Aerospace due diligence process and I strongly urge all interested parties to meet — FLS and the unions — to put forward a strategy for the future of TEAM, including job security, pay and conditions and all other concerns of the unions and workers. That seems to be the orderly way to proceed so that fears can be allayed and the company can say it intends to expand the business and make jobs more secure.

I seek an assurance from the Minister. Is there a threat that if the deal is rejected the plug will be pulled on the money involved, amounting to £65 million? I hope she clarifies this for the very concerned workers and others. What is meant by worker "concurrence" as it is a very vague term? What is the Minister's relationship with the chairman and board? They seem to be acting in one republic and she in another. At the end of the day they will have to get together if the deal is to be concluded.

The Minister expresses her apologies to the House and Deputy Yates for her absence. I understand she has already spoken with him to explain the reasons she cannot be here.

I welcome this opportunity to clarify the current position in relation to the possible sale of TEAM Aer Lingus to FLS. The House will recall that when answering questions on this subject on 16 December 1997, the Minister stated on a number of occasions that there would be no strategic developments in regard to TEAM without the concurrence of TEAM employees and there has been no change in this position. The House will also be aware, that subsequently Aer Lingus announced it had identified FLS Aerospace as its preferred investor.

The Deputy will appreciate that all issues surrounding the possible sale of TEAM to FLS are currently being addressed by management and employee representatives and are varied and complex. It would be inappropriate to comment on those issues in advance of receiving any formal proposal from the board of the Aer Lingus group in the matter. However, I emphasise that no proposals have yet been made to the Minister in this regard. Any such proposal is, in the first instance, a matter for the board of the Aer Lingus group and any recommendation to the Minister from the board will be considered on its merits, having regard to the interests of all relevant parties.

The Minister has already indicated to management and unions that any agreement to sell TEAM will require the agreement of the workforce in the company. This was reiterated by her earlier today in response to parliamentary questions on the subject. She has placed strong emphasis on this point and this is a view which is very much shared by her Government colleagues. It is her strong belief that constructive discussions between both sides, with the assistance of the agreed independent facilitator, with full regard for employee rights as well as the commercial issues on all relevant matters, is the way forward in order to ensure the best results for the company and staff.

The desire to ensure a long-term viable future for TEAM will be the Minister's prime concern in examining any proposal from the board. Her priority is to ensure that the prospects for maintaining and strengthening employment opportunities at TEAM are maximised in the years ahead. This is also the main concern of her Cabinet colleagues, whom the Minister keeps regularly informed on developments in this matter.

Including the director of elections. What about the sum of £65 million? I did not get a response to my question about that.

All will be revealed.