JOINT COMMITTEE ON TRANSPORT debate -
Wednesday, 25 Feb 2009

Job Losses at SR Technics: Discussion.

Chairman

The next item is a discussion with representatives from unions at SR Technics. I draw attention to the fact that members of the committee have absolute privilege but this same privilege does not apply to witnesses appearing before the committee. Members are reminded of the parliamentary practice that they should not comment on, criticise or make charges against a person outside the Houses, or an official, either by name or in such a way as to make him or her identifiable.

I welcome Mr. Michael Landers, Mr. William Quigley, Mr. Pat Ward, Mr. Dave Keogh and Mr. Leo Breslin. We invite the delegation to make a presentation and then we will have a question and answer session.

Mr. William Quigley

I am chairman of the union forum and I will go through the statement we have already forwarded to the committee for the sake of the exercise. SR Technics Dublin employs 1,075 people and 60 apprentices. The business activities carried out include base and line maintenance, component services — auxiliary power units and landing gears, engineering design, facility management and a garage and training school.

It contributes approximately €100 million in foreign revenue to the economy each year and the vast majority of customers are from Europe and the Middle East. It is a significant part of the skills and training infrastructure of the aerospace industry in Ireland. It has been the training ground for the knowledge and skills required for the development of the aviation sector in Ireland and almost all major aircraft leasing companies have offices in Ireland, with many of them staffed with people who were trained and received the required knowledge and skills in SR Technics.

The financial performance from 2005 to 2008 indicates that Dublin generates free cash flow and is profitable. The figures are set out in the accompanying schedule. Although the company is heavily exposed to the very competitive base maintenance market, it has operated at break even or slightly better, with positive cash flow. With regard to sales prospects, in 2009 over 50% of capacity for base maintenance capacity has already been sold; that is a greater percentage than what was sold at the same stage last year. In the landing gear section, a very large volume has been booked in the next five years, with over 80% of capacity already sold for 2009. There is a very large volume of contracted customers in the auxiliary power unit area.

SR Technics took a corporate decision some time ago to close the Dublin site to reduce market capacity in favour of consolidating the Zurich base. The cost base in Zurich is at least as high as Dublin, if not higher, yet there is no downsizing in that location. Zurich issued a directive that the 2009 budget must be achievable and not stretched, with a budget with an earnings before interest and tax, EBIT, figure of €5 million produced by Dublin and approved by senior management in Zurich.

Chairman

What is an EBIT?

Mr. William Quigley

It is earnings before interest and tax. Senior management in Dublin then developed a revised business plan to improve the above performance. Before they got the opportunity to present this plan to senior management in Zurich, they were advised that it was their intention to close the Dublin operation.

This decision was taken without the input or involvement of the management or staff in Dublin. In addition, the staff in Dublin were never given an opportunity to have an input, and at no stage was the staff advised that the situation in Dublin was so critical that closure was imminent. There is an overwhelming desire among the staff in Dublin to keep the operation going. A positive attitude and approach would be adopted to all options.

For some time Dublin has had difficulty in attracting business as a result of the decision taken by Zurich corporate management that all individual contracts must be profitable. This forced us to bid for business at a rate 7% above what the market would bear and we were on average 15% to 20% too expensive in western Europe. In 2008, bids for 78 programs were unsuccessful as a result.

When the former CEO of the Dublin base resigned at the beginning of last year, he was never replaced. Group management forced Dublin to execute loss-making contracts so as to attract more profitable work into Zurich. Customers were advised not to bring aircraft into Dublin. A management buy-out for Dublin was submitted to Zurich senior management in 2008 and late that year, during the bidding process, a customer with a significant order who was initially targeted at Dublin was diverted to Zurich.

A survival plan was submitted by Dublin management to Zurich in early 2008 which consisted of downsizing the operation. There would be a reduction of staff to approximately 850, mothballing of hangars 2 to 4 and operation out of hangars 5 and 6, expansion of the landing gear and auxiliary power unit businesses; and maintenance of the line maintenance, facilities and design engineering businesses. The plan was based over five years with a positive earnings before interest and tax, depreciation and amortisation figure each year. No action was taken by Zurich management on this plan.

With regard to the customer reaction, Dublin has an excellent relationship with many of its customers. A clear indication of this is the decision by SAS to continue bringing in aircraft even after the closure announcement. Another customer, Worldwide Aviation, is also bringing its aeroplane in next week. This is a major vote of confidence in the Dublin site and its workforce. Airbus has expressed its shock over the closure announcement and acknowledged that, in its experience, Dublin had particular expertise in finding solutions to difficult and complex technical problems.

What would be the repercussions for Ireland as a result of the closure? There would be the loss of a vital component of national aerospace infrastructure and a very large number of high skill jobs and training facilities that will be extremely costly and difficult to replace. There are implications for courses at third level colleges, and the University of Limerick and DIT in particular, as SR Technics has been a significant employer of the graduates of their aerospace courses over the years. There would be €100 million of foreign revenue lost to the economy, loss of income tax and PRSI from the €70 million annual wage bill, the cost of redundancy payments for 850 people and the cost of unemployment benefit for 850 people. There would also be loss of indirect taxes as a result of the reduced spending power of the people losing their jobs and loss of business revenue to Irish suppliers and subcontractors with a value of €22 million.

Since the closure announcement, a number of parties have expressed interest in the business. We require the Minister to do the following: to adopt a proactive approach to the decision to close the Dublin base and appoint a project manager or team to assess the viability of the Dublin operation; there should be consultation with Dublin management and staff to develop a viable business plan for the Dublin operation, which would include an analysis of the revised business plan and survival plan; every avenue available should be explored in order to get this decision reversed and there should be help in identifying possible investors or interested parties and exploring what financial assistance might be forthcoming; the closure of the Dublin base should be slowed or halted in order to give the local management and staff an opportunity to have an input into a recovery plan; ensure proper procedures are followed and that she does not allow any essential assets to be removed from the Dublin site; to liaise with the DAA to ensure that no irrevocable actions or decisions are taken with regard to hangars and the leases attached to same, etc.; and to liaise with the regulatory authorities, namely, the IAA, to ensure that company approvals are maintained to allow every option to be properly considered.

Chairman

Who are the company's main customers? Do they include Ryanair and Aer Lingus and, if so, who are its other main customers?

Mr. William Quigley

The people who work on the floor would be better able to give the Chairman that detail. The company has a range of customers, some of whom have permanent contracts for particular durations. Mr. Dave Keogh will elaborate on that aspect.

Mr. Leo Breslin

We have a wide range of contracts for components and air frames. One of the leading customers is SAS, Scandinavian Air Services. We have major contracts with Boeing. We have contracts with Ryanair for some component work and AP work. We were in the process of signing major contracts with Air Canada and SAS when, unfortunately, we were told by SRT Zurich to halt those proceedings and not to proceed with those contracts.

Chairman: What other airlines are in the hangars?

Mr. Dave Keogh

At present we have SAS, LAN Chile and Cyprus Airlines. They are our three main customers. Work is continuing on those aircraft and people are working overtime. We have non-EU contractors working on them. The business is kept ticking over. We had a contract with easyJet up to recently, one with Thomsonfly a major tour operator in UK, and a subcontract with Gulf Air up to recently.

Chairman

The company has a contract with Ryanair for components and it does not have one with Aer Lingus. Did it lose a contract recently?

Mr. William Quigley

The company has a contract with Aer Lingus.

Mr. Dave Keogh

We have the line maintenance contract for Aer Lingus.

Chairman

Is the contract for ten years with provision for a five-year review?

Mr. Dave Keogh

We lost the Aer Lingus contract at the time because the parent company in Zurich set the tone for the negotiations. With 20-20 hindsight it appears it overpriced the bid and it would not allow us to reduce it because it maintained that we should have a 7% EBIT, whereas in Zurich they only sought 3% earnings——

Chairman

I read in a recent newspaper article that the loss of a particular contract caused——

Mr. Dave Keogh

That was the contract for Gulf Air. We did work on a subcontract basis from Zurich. The contract was not as such locked into the operation in Dublin.

Chairman

I very much regret the decision of the parent company to close this plant. I would be supportive of every effort being made to ensure it continues in operation. There is no doubt it is one of our finest Irish companies and has a great tradition and record. Every effort must be made to ensure it continues in operation. The committee is unanimous in saying we will make every effort to support the workers and efforts are being made to try to ensure the company continues in operation. I note the requirements the company has received from the Minister.

I want to refer to the comments made on a recent radio programme by a man involved in the aviation business. I refer to the aviator——

Deputy Thomas P. Broughan

Ulick McEvaddy.

Chairman

Yes, Ulick McEvaddy.

Mr. David Keogh

He is well known in the aviation business.

A Speaker

He is well known everywhere.

Chairman

He is highly respected in the aviation business. Having praised the company and the workforce, he made the point that in his business he could get his work done in the United States for $50 per hour. That is the rate at which the work is priced at, whereas it is priced at €70 per hour in Dublin. I acknowledge that this company has reinvented itself on many occasions. Work practices were changed, demarcations improved and the workforce responded to challenges in the past, for which its members must be complimented.

Is that pricing of work realistic in the current economic crisis? This company is an example to every other company throughout the country that whatever can be done to ensure a company continues in operation must be done. Costs and competitiveness are critical factors. Is their a possibility that the company's costs per hour can be brought down, even on a temporary basis, under a new structure to ensure that it is competitive and that its pricing beats that of its colleagues in Zurich, which is what we want to see it do?

Mr. William Quigley

There can only be one answer to that question and it has to be "Yes". We have said that a number of times to many people we met in recent days. If the workforce here had been advised that the company was on the verge of falling over the cliff, the Chairman can rest assured the unions would have done all in their power, particularly given the current economic climate, to save jobs. We are not in the business of doing anything else.

Apart from cutting pay straightaway, there are many ways of working that would probably yield savings. I met the employer last week and I am due to meet the employer again tomorrow when I will again outline what we wish to say. Those on the employer side will probably reiterate their position that the decision has been made to close the Dublin operation. They are not interested in listening to us say that we want to have an input into the revised plan. That is the sad part of what is happening, namely, that no such opportunity was given by them and they are not willing to give us such an opportunity now. They said at the meeting last week that they would let us have an input into the revised plan with a view to making it more palpable but only for a new investor, not for them.

Chairman

What are the possibilities of the company finding a new investor? Can the operation in Dublin go it alone? Is the company in a position to go it alone, perhaps with Government support, given that it has autonomy from Zurich? What are the critical factors involved in it doing that and attracting a new investor?

Mr. William Quigley

The trade unions have said they will explore every avenue with whoever comes forward, regardless of who it is. However, we have a major concern, given the stance the employer has taken, that the Government might not ensure that all possible investors fully contribute to ensure there is such a move. SR Technics is saying that it will secure pockets of the business, the line maintenance and other pockets, which will only account for in excess of 200 employees. The line maintenance end of the business has a contract and it will have to get another operation to take it over because it must live up to the contract it signed with Aer Lingus. It has to take care of that. If the workers continue to do that work, that would be one way of dealing with that question. Another way would be if the workers were made redundant by SR Technics and recruited by a new investor as new workers. That would still leave a question mark over the remaining 800 or 900 jobs.

We have asked the Tánaiste to ensure that every potential investor gets a fair opportunity of taking over the operation in its totality or taking over the parts it wants. If that fails, the workers will have to consider their own position in terms of a worker share option buy-out or whatever. We have some knowledge that a management buy-out with the involvement of other people has been rejected by SR Technics. However, we do not mind that as we consider the critical issue is the way the Government will deal with potential investors.

Chairman

Before I call Deputy O'Dowd, will Mr. Quigley specifically comment on Ulick McEvaddy's point that he can get his work done for $50 per hour in the United States while such work costs €70 per hour in Europe?

Mr. William Quigley

There is evidence that work that was normally done on this site and done to the highest standard was transferred to lower cost destinations on different occasions, but those companies had to return to this company cap in hand as they found the work was not done satisfactorily and was not delivered on time. The people who carried out the exercise efficiently are the people we represent.

Chairman

Mr. Quigley is satisfied that the operation's cost base is as good as can be found anywhere else.

Mr. William Quigley

For the high standard of work.

Mr. Michael Landers

I thank the Chairman and the committee for inviting us. The proof is that work is being sourced on the open market at a price of €70 per man hour but is being turned down by the current management team because of the strategic imperatives set by Zurich. That is the corporate strategy. It is possible to shave something off that price. There is no shortage of work in the marketplace and it is established that the company can bid for and secure that work.

I ask the committee to bear in mind the conflict of interest that arises between SR Technics's parent company and its Dublin staff. As it is not in the interest of the parent company to have a viable competitor in Dublin, we do not expect co-operation to proceed beyond lip-service.

Deputy Fergus O’Dowd

I welcome the worker representatives of SR Technics. I met them last Friday morning along with Deputies Kenny, Terence Flanagan, Reilly and McEntee and was impressed by the manner in which they made their presentation. If this committee has any role, it is to allow the witnesses to put their cards on the table so that we can encourage statutory agencies and political parties to do what they can to save the more than 1,000 jobs under threat. These jobs support families, communities and other companies which rely on downstream activities to provide employment. SR Technics, which historically provided difficult and boring work requiring only a basic education, has become a 21st century industry based on the most modern of technology. If these jobs are lost to the country we will be put at a serious disadvantage in terms of our highly skilled workforce and the colleges which teach the skills required for the highest calibre of work.

We will support the workers at SR Technics in every way we can and by means of whatever pressure we can apply. They should look upon us as their agents in this matter. I have been given a copy of a business plan for the company which presents a comprehensive strategy for rescuing these jobs. It is welcome that the Minister for Enterprise, Trade and Employment has indicated that more than one bidder is interested in the company. The more we can push the boat out in that regard, the better. I ask the workers to consider the issues the Chairman has raised in the context of overall costs.

Deputy Thomas P. Broughan

I warmly welcome the delegation from SR Technics and hope their efforts will ensure the survival of this critical aviation facility and its 1,200 jobs. As a Deputy for Dublin North East, I have previously spoken with between 40 and 50 workers and managers from SR Technics. For young men and women with mortgages, the prospect of losing a job in this economic climate is extremely worrisome. The human cost should be foremost in our minds when we seek ways of preserving these jobs.

I understand local management prepared a recovery plan in the latter part of 2008 which included several proposals for improving efficiency at the facility. However, the Zurich owners and the Middle Eastern investors appear to have pulled the rug from under them. Did the proposals offer a basis for the company's future success?

As Labour Party transport spokesperson, I met Bernd Kessler for more than one hour last week. He gave me a spiel about costs and developments in aviation generally but he conceded that the engineering work done in Dublin is excellent in every aspect. He used the analogy of Swiss clockmakers' knowledge of precision engineering. However, he drew my attention to the loss of the Aer Lingus contracts. My party ferociously opposed the privatisation of that airline because we felt it would have detrimental repercussions for jobs in the northside of Dublin and the mid-Leinster region. What is the prospect of retrieving the contracts in view of the Government's 25% shareholding in Aer Lingus? I understand that Gulf Air did not want to leave Dublin because it wanted to retain SR Technics's expertise and that some of the work done for Aer Lingus in France and other locations is not up to the quality of Dublin.

Last night my colleagues, Senators Hannigan and Ryan and Deputies Shortall and Costello, and I held an hour long meeting with the Minister for Enterprise, Trade and Employment and officials from the IDA to find out how they intend to support efforts to save the company. I understand Enterprise Ireland could also play a role. Do the witnesses believe they are receiving sufficient support from the Minister and the IDA? What sort of support is being offered by stakeholders such as the Dublin Airport Authority and the airlines in terms of capital? They would be devastated by the loss to Dublin Airport of the expertise offered by SR Technics.

Some of the workers with whom I met expressed concern that high quality engineering capital investments, such as the electroplating workshop, could be removed from the company's hangars by the Swiss owners. What is the likelihood of this?

My final question concerns the company's six hangars. I understand five of the six hangars belong to the DAA. Has any more information come forward on the six? My Labour Party colleagues and I believe it would be a devastation for our region if the facility called SR Technics were to close and we were to lose these 1,200 jobs. The most poignant e-mail I got was from one of the young apprentices who was looking forward to a life of successful work in his city and is facing devastation.

Mr. William Quigley

I shall make an initial response and Mr. Ward wants to elaborate. We have a major concern that SR Technics will do all in its power to scupper interested parties having an interest in the entire facility. We do not want that to happen. We deal with people losing jobs every day of the week and it is very unfortunate for every type of worker. However these people service aircraft and that is the difference in losing that type of skill to this nation. That is what SR Technics wants to do.

Regarding Deputy Broughan's questions, we believe local management is convinced the revised plan is workable, payable and viable. Local management is with us. They are suffering along with the rest of the workers because they are flabbergasted regarding the revised plan they have proposed. Regarding getting one Aer Lingus contract and losing the others, last March Mr. Kessler told us to do whatever we wished to do to get these contracts signed up under the different terms and conditions and our position would be secure. We did that through long nights in the Labour Court, etc., and signed it at the beginning of June. In his words, he and his company were there for the long haul. Last March we asked about the contracts he was losing and he said he was more than confident that he would easily get work to replace them.

The Deputy asked what the Tánaiste and Minister for Enterprise, Trade and Employment and the IDA are doing. They have told us they are working on it in a positive fashion and gave us the impression they were doing that ahead of meeting the management. We are not so sure that is true but we have to accept what they have told us. I understand the Tánaiste had more discussions with Mr. Kessler yesterday. We believe there is concern about it and a willingness to do something but we are concerned that there is no willingness to examine the totality of the operation. Some might take the view that saving half of it is good news, but we want to try to save most or all of it. We accept that some people with long service will probably get browned off with what is happening and want to take redundancy.

Deputy Broughan mentioned the hangars and the DAA. Last Friday the company advised us that it had agreed with the DAA that hangars 1 to 6 would return to the DAA when SR Technics arrive at a point when it is departing Dublin. The company also gave a verbal commitment that it would not move gear or plant from the site and we are meeting again tomorrow. We are concerned it has turned away work since the announcement. Although the company has told us it will act in good faith we are not confident that is the case.

Mr. Pat Ward

We appreciate the comprehension of the unique skill set and technical expertise that has been acquired over 80 years in the facility at Dublin Airport. We have asked across the table for a copy of the business plan and the company has failed to give it to us. We have no copy of the local management's business plan but the executive team from Zurich said in the event of some other company expressing an interest in the entire operation, it would then present the business plan to us to examine with that interested party what could be salvaged from it.

Mr. Quigley elaborated on the loss of the Aer Lingus contract. Last March people had to take unpalatable decisions and swallow the tablets, and they did that. They created the circumstances that allowed SR Technics to enter into a ten-year line maintenance contract. We are satisfied that the loss of the Aer Lingus work was mainly a consequence of the bidding process and the cost imposed on the Dublin operation from Zurich. We do not accept that the loss of the three contracts was a significant factor in the decision to pull out of the operation. As Mr. Quigley pointed out, the CEO said the company was prepared to invest €100 million and was in Dublin for the long term, yet 11 months later it decided it would put a padlock on the hangars in the facility.

On the cost of the work and the Chairman's earlier point, this company has been to the brink on many occasions in the past. Through innovative ways and new thinking we have managed to pull it back. The difficulty is that on this occasion we were not afforded the opportunity. The company arrived last Thursday week and said the decision was made to close the hangar doors. These people were never afforded an opportunity to sit down with their employer to see if there was any way to examine keeping as many people as possible in work.

We accept at face value what the Tánaiste said to us last week. We have received no direct updates from the Tánaiste's office or officials or the IDA since we met her and her advisors last week. We have had no support from the DAA or any other vested interests on the Dublin Airport campus. There is a view that strong vested interests are working against the employees of SR Technics, that it would be preferable to see a carpark on the hangar facility, that it would be preferable for a certain airline to have a low-cost terminal it could own and from which it could shuttle people in and out with matches for light.

On the 30-day consultation process, most of the 1,200 workers in the company are concerned that the company issued letters that the minimum terms of notice will kick in from 14 March. People received those letters this week and are concerned they will be locked out by the employer, their security IDs will be cancelled, they will be refused access to their place of work and the company will go in and clear the hangars of the tooling and other equipment that was referred to.

The management said as a consequence of refinancing its organisation it is not in a position to speak in terms of monetary aspects until this refinancing is in place and it has told us this will be in the latter half of March. Last week we asked the management how we can enter into meaningful discussions with it when it cannot sit with us and sign off on the refinancing of the company. That is a major difficulty and in that context we believe the 30-day consultation process should not commence until the company has sign-off on the financial package for the survival of the business.

Deputy Fergus O'Dowd took the Chair.

Deputy Michael Kennedy

I welcome the delegation. I echo the expressions of disappointment and frustration about what has happened. We have all heard from time to time about problems in SR Technics, but when we heard about the impending meeting last week the last thing we as politicians would have expected, any more than the witnesses, was that the head office in Zürich would take the decision to close down without any consultation and without giving any opportunity for others to put forward a viable plan. It would be catastrophic if the specialist skills that have been built up in this industry were lost, but if the business is lost now it is unlikely we will ever regain it. It is incumbent on everybody from local management to politicians to unions to work together towards a resolution.

It disappoints me, if I pick the witnesses up correctly, that local management does not seem to be working closely with them in terms of saving the business. Perhaps I have misinterpreted something somebody said, but I would have thought it was as much in the interests of management in Dublin as the skilled workers on the ground to save this business. Their jobs are at risk just as much as those of any of the workers. If there is anything the witnesses can suggest to rectify the situation, I invite them to do so. We did invite the management of SRT to appear before the committee today, but the Chairman received a letter saying its members were not in a position to appear because of the four-week period of notice and so on. That is not the end of it, however. I am sure my colleagues would support an attempt to get them in here and have them answer to us as to why they are not consulting and co-operating with the witnesses.

The last thing we need is for any jobs to be lost. It is particularly galling because there are profitable divisions. I have met quite a number of workers and others have telephoned or e-mailed me. There are individual components of the firm that are profitable and it would be a disaster if those parts of the business were allowed to go to the wall and ended up being sent out to France, Germany or wherever else.

Mr. McEvaddy was mentioned. Given that the witnesses told us a package had been put together with a number of redundancies and a competitive cost base, can we not work together in terms of putting it up to Mr. McEvaddy or Ryanair to form a new company that will be competitive on the world stage? There is little point in Irish businessmen saying they will transfer their business elsewhere because the price is not right. The witnesses are saying clearly to us today that the price will be right. Everyone is a realist today. The price has got to be right if a company is to get contracts and retain them. I suggest that all those with interests around Dublin Airport should be banging their heads together in the national interest. We are all talking these days about doing what is right for the country and wearing the green jersey. This is one opportunity for business people to wear the green jersey and support their own, if it is an even situation.

Fianna Fáil backbenchers have been meeting the Tánaiste two or three times a week. I spoke to her today, as did my colleagues; I spoke to her yesterday and I will be speaking to her tomorrow. I have been given an assurance that she, her officials and the IDA are doing everything in their power to get alternative buyers. The Tánaiste informed me that she has put a specialist aviation expert at the disposal of the IDA to seek out alternative buyers. That is welcome from our point of view. I am sure no stone will be left unturned across the party divide. Every one of us, whether from Dublin North, Dublin Central, Meath, Louth or Kildare, has constituents who work in SRT, and it is our job to ensure we get that business up and running.

With regard to the Dublin Airport Authority, do the witnesses know whether the leases have been handed back or bought back?

Mr. Pat Ward

The company confirmed at our meeting of last week that it had entered into an agreement with the DAA for hangars 1 to 6 and that SRT will occupy those until such time as it leaves the country. At that point they will return to the DAA.

Deputy Michael Kennedy

On that basis, can I suggest that in addition to inviting the management of SRT before the committee, we also invite the DAA?

Acting Chairman (Deputy Fergus O’Dowd)

That is fine. Before the witnesses reply, I would like to take Deputy Shane McEntee. The clerk is telling me that members of the committee should have priority over others, and Deputy McEntee has been here——

Deputy Shane McEntee

Is Deputy Kennedy finished?

Deputy Michael Kennedy

Yes. I could talk for an hour, but I am sure people have got the gist of what I am saying. I have given my full commitment to do anything I can. I assure the witnesses that my colleagues and I have been making major representations to the Tánaiste and the IDA to come to a successful conclusion.

Deputy Shane McEntee

It is nice to see the witnesses here. I am sure they are tired meeting everybody at this stage. When this was first brought to my attention by some of the workforce last week I talked to three people. I come from north Meath, an area in which businesses have closed down left, right and centre. For some of them there is no argument but others might close down part-time. There are places such as Kingspan where staff were let go, and if one goes down to the brickyards they are full of bricks that cannot be sold. Workers understand this. From the education I have received from the witnesses and the workforce of SR Technics, I can see it is a company that has work ahead of it and is not easily moved to anywhere in the world.

I do not accept the management's stance on not coming in here today. The letter from the management stated, "As part of this process we are examining all potential options for the Dublin operation, including the possibility of finding alternative investors". The members of the management should come in here and tell us what they are doing. It is absurd. Last Friday the witnesses got passes for us to visit the workers on the ground but we were blocked by senior management. I do not accept the fact that a company came here five or six years ago, plundered our expertise and jobs — that is what I call it; it was plundering as the Danes did — and is now leaving the country. There are only three weeks left, and if there is one thing we should do it is to demand that the management come in here and that we get an extension for at least two or three months. There is work available until June. We have made it clear to our leader that we will fully support the Minister.

I am worried at this stage. I met more members of the workforce on Monday in Ashbourne and last night in Slane, and they are totally disheartened. They are getting no indication that the firm will not close down on 15 March. As the Minister, Deputy Kennedy, Deputy Broughan and everyone in the room knows, if we let this go, that is the end of the possibility of holding on to any jobs. We must get behind it, putting money into it if we have to, and if the management in Zurich does not want to come here, we should go to Zurich. It is not even in the EU. I would consider it a complete failure on everyone's part, including ourselves as politicians and the witnesses as workers, if we allow a company from a country that is not even in the EU to take our businesses away. It was disgusting to get that letter. It is an excuse, although the letter is well put together. If what the management representative says in that letter is true, the management should be in here tomorrow telling us what they are doing.

It is our job in opposition to ask questions, so I ask the witnesses whether they are happy with the response they are getting from the Minister, Deputy Coughlan.

Acting Chairman

I will ask for a response to that question.

Mr. William Quigley

At no time in this critical juncture do we wish to undermine what anybody promised us or what anybody is trying to do. We do not know the exact situation because we did not get any feedback from the Tánaiste since meeting her last week. However, we expect a response after commitment was given by the Tánaiste and the IDA that they are working on this.

We still have a concern that SR Technics wishes to scupper any progress that might be made in saving the facility in its totality. The fact that the company is not here today is some evidence of this and we see this as a great difficulty. We must take at face value the word of the Tánaiste on behalf of the Government. She said it will do whatever it can, in conjunction with the IDA. We hope the Tánaiste does not imagine it would be great news for us if half, or a quarter, of the business were to be saved. The company informs us it has a contractual situation with line management. There is great potential to save those jobs and other pockets that have a small number of workers. The Tánaiste might think that is good news for us but we knew as much before we ever talked to her.

It is the bigger picture that matters and investors should be allowed full opportunity to explore in full without being scuppered by anybody, particularly SR Technics. There are others who would not be helpful either. That is the only answer I can provide.

Deputy Shane McEntee

I return to the timescale. We are looking at 15 March. Is that correct?

Mr. William Quigley

The company issued a date in its correspondence, proposing that letters of termination date might issue on 15 March. In other words, a worker might receive a letter on that date stating that his or her termination date will be six weeks from then. Six weeks' notice is required to be given. I was told that some workers got letters last Friday. We made a case for the 30-day period. Should consultation under this legislation and the 30-day period, about redundancy payments for those who will not be kept in employment not begin from the day the company tells us its offer?

We met representatives last week and are to meet them tomorrow. They said they will let us know what progress they are making in their attempts to transfer the contract they have with Aer Lingus and to get investors for those small pockets of the plant they say will survive. They say that is what they want to tell us. Obviously we have questions for them. We want answers and we will look for written commitments tomorrow. We asked for written commitment last week with regard to pensions, for example. They told us pensions were fully funded and would match their liabilities and obligations. We have asked them for written assurance on that and they say they will respond again tomorrow. However, from now on we want written replies because only those are of value. That is where the situation rests.

Deputy Shane McEntee

Is it true that SR Technics representatives cannot come here because of what is going on?

Acting Chairman

The letter states that they do not wish to come in at this stage while they——

Deputy Shane McEntee

Is there a law to stop them from doing so other than the fact they have given notice?

Acting Chairman

Regrettably, whatever we feel about this matter — I feel as strongly as the Deputy does — they have a right not to come in if they so choose. That is democracy.

Deputy Shane McEntee

We could practically make a cap on that.

Mr. William Quigley

I agree with some of the points made by Mr. Kennedy.

Deputy Michael Kennedy

I believe we all agree to demand they come in, along with representatives from the DAA.

Mr. William Quigley

Perhaps the Deputy should listen to me first. Local management out there have been instructed not to do anything that is against the decision or that favours the unions. Members should have no doubt that this has happened. The personnel needed here are Mr. Kessler, Mr. Stewart or Miss Kennett. Local management have no doubt that the revised plan it has put forward is a workable viable plan for 2009. They want the plant to be saved but are afraid of their lives to be seen expressing that in front of the workers because of the weight on their shoulders.

The Deputy mentioned unions working with investors. We made it abundantly clear to everybody we met that if investors are interested, and if they feel they should talk to the unions to work out a plan for taking over, it goes without saying this will happen. We are up for that, big time.

Regarding the DAA, last week we were told that the authority has given a commitment to take back the hangars on the date that SR Technics completes its removal and leaves. That is all we know about that matter.

Acting Chairman

I have been told we do not have the powers to compel witnesses to attend but what we can and should do is reissue the invitation to SR Technics representatives to come in whenever they are available. I wish to go through the names the Chairman identified before I took the seat. I have Deputies O'Brien, Reilly, Byrne, Senator Hannigan and Deputy Flanagan, in that order.

Deputy Darragh O’Brien

I welcome all the delegates. This situation is above politics. It is about people's livelihoods, about 1,135 jobs and about couples I have spoken to who both work within the company and take two incomes from it. Like my colleagues across parties I have met workers from SR Technics since last Thursday week. Mr. Quigley has been very fair on this. I assure the delegates that anything that can be done will be done. Many efforts are being made in the background. I join Deputy Kennedy and many other members in talking with the Tánaiste on a daily basis and I have also spoken to the Taoiseach in this regard. There are opportunities to save jobs and it appears to me that a substantial number of them can be saved. Obviously in an ideal world we would want all of them saved. We must go down every single avenue and do everything humanly possible to make sure this is done.

The information I received, already mentioned by several people, is that road blocks are being put up by SR Technics concerning potential investors. That cannot be allowed to happen and I have said as much very directly to the highest levels in Government. When people are interested in investing in the company, or others such as local management provide revised plans, everything must be put on the table and assessed fairly. That can only be done if SR Technics allows full access. People cannot be expected to go in half-blind and invest in a company and try to keep it viable, with one arm tied behind their back. No business would do that. We must maintain pressure on the company to make sure there is full access. It has tied people up in knots.

Last week I was interested to hear a statement by Mr. Bernd Kessler and I would like to hear a comment on this. It concerned extending timeframes for maintenance of aircraft. He said this is becoming more of a trend within the market and whereas here we are used to servicing aircraft very regularly he suggested that the period be pushed out increasingly further. Safety issues become involved when periods between servicing are extended and aircraft must fly more miles before being serviced.

This is not just about cost. The witnesses outlined as much today. I have heard from many companies they deal with that the expertise found in the Dublin facility is absent in others. France was referred to today and the difficulties that Aer Lingus has in that country with regard to delays in the turnover of aircraft. It is very dangerous to initiate, as a cost-saving measure, that aircraft not be serviced as regularly as they should be. In recent weeks, unfortunately, there have been several aeroplane crashes. I cannot say it is all down to maintenance but the accidents happened. It is shocking that anyone should say this is the way forward but Mr. Kessler almost confirmed as much last week. Customer safety is paramount in this.

I will not detain the meeting further. I reiterate this matter is above politics and is about 1,135 jobs. All of us are agreed on it. I assure the witnesses this includes anybody I have spoken to in the House, not only those who have SR Technics workers as constituents. This issue touches the entire country. We have an opportunity to save many jobs and everything that can be done will be done. I thank the witnesses for their presentation. I ask them to comment on servicing schedules.

Acting Chairman

I have no problem with that and Mr. Ward has indicated he wants to do so. I will take Deputy Reilly now and then there can be a response.

Deputy Darragh O’Brien

I must go to the Dáil chamber also.

Deputy James Reilly

We must be in the Chamber for 7 p.m.

Acting Chairman

I have no problem with that.

Deputy Michael Kennedy

We could have all the speakers and then a collective response.

Deputy James Reilly

I welcome the delegation. We have met several times and I have met several of the workers on several occasions. This is long-standing industry with a great workforce that has been innovative and which has done everything asked of it every time there has been a crisis. The company has had many different names including Aer Lingus, Team Aer Lingus, FLS and so on. The workforce is very skilled. We were in shock when we heard the news. People thought there may be perhaps 300 redundancies, but they had no idea the whole company would go under. It was a black day for Dublin North and for Ireland. It is a very significant loss to the local economy. I find it difficult to understand. Any research I have done indicates that Zurich charges are the same as Dublin.

Mr. Dave Carr

They are higher.

Deputy James Reilly

That is worse again. Why claim the cost base here is too high? Is the Swiss Government providing a subsidy? Mr. Gay Mitchell, MEP, asked the EU Commission to examine the matter and it is actively doing so. Although Switzerland is not in the EU, it is a member of the EFTA, the European Free Trade Alliance for which there are governing rules. Ireland must fight for its own in this case. There has been talk of wearing the green jersey and this is a time when we must stand up for our people.

I spoke to the Tánaiste in the Dáil yesterday and I met her last night also. SR Technics declined the invitation to come here. The Acting Chairman is correct to say that no Oireachtas committee has the power to compel anyone to appear, which is a problem. We could not compel people from abroad. We should write to the company demanding that it send a delegation. We should also write to the Swiss Government suggesting it uses its influence to urge the company to come here explain the bona fides of its actions. We must pull out all the stops.

Politics is about people, but this is too great an issue for party politics. We will all do our very best and we will all support the Government in its actions. However, it must come clean and put everything on the table, including the funding of a workers co-operative, if that is the only viable option. I appeal to the Swiss Government also. If SR Technics appears before the committee we should demand that it remove the gagging clause from local management and let local management appear before the committee and speak freely about the possibility of a management buy-out, which is another option. I share the concerns of the delegation, that this is a stealth operation to remove a very valuable, highly skilled business from the country and the EU. I do not and will not accept the argument that because of a consultation process company management cannot send a delegation. That is total bunkum.

I am told the Zurich hanger is overloaded. Is that true? How much would it cost to buy the business now? Is such information available? What is the value of the assets? The delegation has explained how busy the company is. I am aware that 80% of one line is booked up, after only two months, for the rest of the year and that 50% of another line is booked. There is a viable business and there are orders on the company's books up to 2016. That is why we cannot simply lie down and allow this to occur. We must fight it and use every avenue and every trick open to us. If they intend to play dirty let me send them a message: we will play dirty too. However, we do not wish to play dirty, we wish to play fair. Let the company come before the committee and make its case fair and square and will take the matter from there. Is the delegation convinced that the business is viable and profitable and that the workers could operate it profitably if it was given the wherewithal to do so?

Mr. William Quigley

As I said——

Acting Chairman

I call Deputy Byrne first as I am conscious there may be a vote at 7 p.m.

Deputy Thomas Byrne

There may be a vote at 7 p.m. I apologise for my absence during the presentation. I am a member of another committee which met at the same time. I am pleased to be here. The difference between this and other job loss announcements is that it is not simply a case of rich tea biscuits, sympathy, saying how terrible it is and arguments about competitiveness.

There is a serious ongoing effort, more so than I imagined at the outset, to save these jobs and the business. The impression given concerning the Tánaiste's efforts was correct. I am pleased that there is a good deal of work under way, more than I expected. We simply cannot afford to lose these jobs. It would be devastating, not only for our constituencies, but nationally we cannot afford it. There are probably hundreds of workers living in east County Meath. These public sector rallies are all very well, but we cannot pay their wages until people in the private sector pay their taxes, as is the case in SR Technics. The matter goes above party politics. The Opposition is correct to keep the pressure on us, but we are certainly keeping the pressure on our Ministers also, through constant contact. We wish to save as many jobs as possible, to save a viable business, to save skills and to allow these skills to remain in the country. If we give up there is nothing worth fighting for in the country on this matter. I am pleased to see the efforts taking place and to be able to do whatever I can as a young backbencher. I am very concerned. There are many issues before us at present including the public sector, Anglo Irish Bank and so on, but this is the most important issue I face as a Member. If we cannot save these jobs then we are gone.

Acting Chairman

I call Senator Hannigan, who may need to leave for a vote in the Seanad shortly.

Senator Dominic Hannigan

I am paired this evening, but I am pleased to speak now.

Acting Chairman

I am trying to facilitate the Senator. I will then call Deputy Flanagan.

Senator Dominic Hannigan

This is the second occasion on which I have met the delegation. I compliment it on its efforts to retain as many jobs as possible. It has done tremendous work in the past week to ensure we are all aware of the issues. I share the concerns about the motivation of the parent company. From the analysis I have seen, it is clear the 2009 business plan could have been turned around with some straight forward measures and go from being in the red to the black. Something as crude as a 10% pay cut could have turned the business into profitability. There are other options. I do not suggest a pay cut is the answer. It is clear if the parent company wished to make the business viable, it could have done so. Its motivation lies elsewhere. This is a strategic decision to relocate to Zurich. If anyone doubts that is the case, they need only inspect the website to see the company is currently hiring staff in Zurich. It is clear the parent company has made a decision to leave these shores.

I refer to Zurich and especially its potential as a place for some of the apprentices to finish their studies. Is that an option? Is is something the delegation is considering? It may suit some of the apprentices. I refer to the letter from Mr. Bernd Kessler on 12 February. He stated that the method of calculating the redundancy payments will depend on the re-financing of the group. What exactly does this mean? Does it refer to re-financing as a result of selling off parts of the business in Dublin, or is it part of a central re-financing? It is not acceptable that workers should be reliant on redundancy payments based on what is occurring in Switzerland. I realise we cannot compel the Swiss to sell off parts of the business to anyone. Ultimately, it will be a financial decision taken by the company. However, we can apply pressure. Can the delegation offer some advice on what we might do? The Minister has already stated that he will refuse to revoke the EASA 145 licence. In a letter to staff, Mr. Kessler stated that there are no plans to transfer landing gear to Zurich. Should we be doing something else? For example, should we contact Boeing concerning its contracts with the Swiss? Is there anything else we can do to put pressure on the Swiss to deal with the matter?

Deputy Frank Fahey took the Chair.

Deputy Terence Flanagan

I thank the Chairman and the witnesses for appearing today. I attended the meeting last week with Deputy Enda Kenny and other Fine Gael Deputies. I am a local Deputy in the area and I have received a good deal of correspondence and e-mails from very frustrated people. There are workers who received very little notice. This news came as a shock and out of the blue. The fact that workers had no input or that they were given no opportunity to provide suggestions as to how the company could proceed and how cost savings could be generated is frustrating. The jobs are highly skilled. That is important and above politics. All parties must work together to ensure that we exhaust every possibility to keep these jobs within the Irish economy. Have the witnesses been involved in any negotiations to find a buyer or are they sidelined and not informed of what is happening daily?

What further pressure can we apply to remove the gagging order on local management? As a member of the Opposition I am putting pressure on the Government, the Tánaiste and the Taoiseach. What more can I do, apart from Deputy Reilly's suggestions about contacting the Swiss Government and politicians to put pressure on the company? We are on your side and want to resolve this problem.

Deputy James Reilly

I apologise for having to leave but I must speak in the Dáil Chamber.

Mr. Pat Ward

Deputy Kennedy is correct. Our understanding is that the aviation expert is appointed to scrutinise whatever business plans are presented for somebody else to take over the operation. We do not know the expert's identity, credentials or anything else. My point, that we have not received the business plan that local management presented in Zurich but that did not see the light of day there, was to a degree misinterpreted. It is disappointing that the company did not give it to us to see if we could add to what the local management had done.

One of the members of the executive team at the meeting last Friday made the disturbing point that they closed down discussions with interested parties in the interests of the viability of SRT. We pressed the company on that point because there would be a view that it would not be in the strategic interests of SRT in Zurich to have a competitor in Dublin. We were disturbed to learn that interested parties were gagged or closed down and were not given the information they sought which could have lent itself to securing some of the 1,200 jobs.

We assume that the Tánaiste, her officials and the IDA are talking to the likes of Boeing and airlines. They are the people who would have a vested interest in maintaining their aircraft in Dublin. We hope and pray that is what they are doing. We take what the Tánaiste said at face value. We do not intend to make this a political football. We met representatives of all the political parties and sent the same message to everybody, regardless of party. We are in the business of trying to save as many of those 1,200 jobs as possible.

We circulated a discussion document which will be further circulated tomorrow to see whether there is an appetite for a workers' co-op. We believe there is but it will take the political will of all parties, Government, workers, unions and management to work together to put that contingency plan in place. We are of the view that the operation and facilities at Dublin Airport can be viable and profitable. We want to keep as many of those people as possible in work.

Mr. William Quigley

Whom in local management did the committee invite here? If the invitation was addressed to someone at local level it was probably passed on to a higher level and I assume the rejection came from there.

Chairman

Stephanie Kennet, the senior vice president, responded.

Mr. William Quigley

If Mr. Kessler was at the meeting tomorrow and we told him that the workers decided to work for nothing he would be very disappointed because the decision is made.

Chairman

Is there a realistic opportunity for a significant temporary reduction in wage costs if that meant saving the company?

Mr. William Quigley

I think the Chairman was here when I said that when we pressed the company on the discussions we began last week and continue today, it proposed two days of meetings next week. I asked what we would talk about and it said the parts of the business that it can save or off-load. The company wanted to continue advising us on that. I asked if the revised business plan that Zurich rejected formed part of those discussions because unless it did the company was opting for a charade. The answer was "Yes" but only in the context of a new investor. In other words, the company will allow us talk to a new investor to have input into the plan that local management said could run in 2009 but that SR Technics had rejected.

Depending on the direction in which we go we will look after different elements of the business. We would welcome the possibility of assuring apprentices, with commitment from Zurich, that they can finish their time there. Were we to say that tomorrow, however, they would say we had given up the ghost already. It would seem that we accepted there would be no work here. We would not say that tomorrow or next week but we will have to look after some matters.

With regard to re-financing, the company has said it awaits a decision not to sell anything off but sought approval from its bankers for millions of euro. Mr. Kessler said on the day of the announcement that he hoped to have a decision on that within two weeks. We went to the meeting last week and Mr. James Stewart indicated that the company will not have that decision until near the end of March. I do not accept or believe that. I think it will have the decision before then but is using that as part of its strategy for dealing in a particular way with us, mindful that in its other letter the company identified 14 March as the trigger date for notices to issue.

We have no information on potential investors. Pat Ward mentioned the potential for a buy-out. We want any potential investors to have fair wind of getting their claws into this. If they need us on board we will try that out. If that fails we go to the next alternative.

Mr. Dave Keogh

When we asked about the Zurich strategy we said we have a viable industry in Dublin and want to keep it going. The company said it was not in its strategic interests to continue in Dublin. There are three main investors from the Gulf states, Mubadala, the investment arm of the Abu Dhabi Government, Istithmar which owns 30% of the business, and Dubai Aerospace Enterprise owns another 30%. I have a copy of an article from The National, published in Abu Dhabi, commenting on SRT’s closure in Dublin. The article reads:

Executives of SRT, which employs more than 5,000 people in total, said Mubadala was guiding the company through the restructuring process and would increasingly look to find synergies with Abu Dhabi Aircraft Technologies (ADAT), also owned by Mubadala and based at Abu Dhabi International Airport.

"We are now a Middle East company and want to grow together with ADAT," said an SRT official.

That is what is driving the whole restructuring issue and the fact that they do not want competition here in Dublin.

Chairman

Would the Abu Dhabi interests be attracted to investing directly in a new Irish outfit?

Mr. Dave Keogh

One must look at what Mubadala has to say. Mubadala Development Company is a leading business development investment company in Abu Dhabi. At the core of its strategy, Mubadala makes long-term capital intensive investments to deliver strong financial returns and economic diversification. Its mandate is to transform the emirates from a single sector economy, driven predominately by oil and gas into a multi sector global economy that comprises a range of Tridon Industries. What it is trying to do is build up an industrial base in the Gulf. I cannot blame it, that is its national interest. What we have to do here is look after our national interests.

Chairman

Absolutely. There may be potential to explore the possibilities directly with the United Arab Emirates because they certainly have the money but not the expertise. Perhaps there is an opportunity there.

I will have to bring the meeting to a close because we have gone way over time. I sincerely thank the witnesses for a very good presentation. As they have heard from all the members here this is an example of a company which cannot, and, please God, will not be allowed go to the wall. In regard to whatever needs to be done there is all-party support here to get it done.

Mr. William Quigley

I thank the Chairman and members of the committee for the opportunity to appear before the committee. We expect everybody to do all in their power to save this facility. The immediate issue is that we are trying to impress on the Tánaiste the need to put a stay of execution on any movement towards redundancies while there is an opportunity for people to have an input into their future.

Chairman

We will reissue the invitation to the management of SR Technics and the DAA to appear before the committee.

The joint committee adjourned at 7.15 p.m. until 3.45 p.m. on Wednesday, 11 March 2009.