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An Post.

Dáil Éireann Debate, Wednesday - 12 May 2004

Wednesday, 12 May 2004

Questions (35, 36)

Michael D. Higgins

Question:

52 Mr. M. Higgins asked the Minister for Communications, Marine and Natural Resources the position with regard to restructuring An Post in view of the company’s recent announcement that it recorded operating losses of €43 million in 2003; and if he will make a statement on the matter. [13698/04]

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Paul Kehoe

Question:

53 Mr. Kehoe asked the Minister for Communications, Marine and Natural Resources the meetings he has had with An Post since January 2004; his views on the progress An Post is making with its financial recovery plan; and if he will make a statement on the matter. [13627/04]

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Written answers

I propose to take Questions Nos. 52 and 53 together.

I have met with An Post on two occasions this year, on 29 January and 4 February last. Furthermore, during the industrial relations difficulties in March, I met with An Post management on a number of occasions to update myself and my cabinet colleagues on the situation. My officials meet regularly with An Post management and they brief me on developments.

The Deputies are more than aware of the precarious financial situation An Post finds itself in, which I outlined in some detail to the House on 23 March. On top of losses in 2001, the company is set to lose approximately €100 million between 2002 and 2004 and, as announced recently, operational losses of €43 million were recorded in 2003.

Losses on this scale and of this duration are simply unsustainable. It is neither in the interests of the company, nor its employees or customers, that the situation remains unchecked. If the company is to return to profitability, the company needs to be restructured. If this is to be a success, it is crucial that all stakeholders play a constructive part in this process.

The current IR issues in An Post have been simmering for some time. The problems in An Post are long-standing and deep-seated and it is clear that the solution to the current issues must put the company on a long-term sustainable financial and operational footing. The full scale of the financial problems facing An Post became clear to myself and my Department during the second half of 2002 and to the then management of An Post sometime later.

It is important that all stakeholders fully recognise the seriousness of the financial position and the threat this represents to the future of the company.

Once the scale of the financial difficulties became clear last summer, a recovery strategy was approved by the board and presented to me. The strategy sets out a road-map to return An Post to profitability by 2005. It includes significant restructuring and job losses amounting to approximately 1,500. However, buy in from the unions is crucial to its agreement and implementation. This has not been an easy process — change is not easy. Following the industrial dispute last March, the Labour Relations Commission put forward a framework to resolve the differences between management and unions.

Both parties are currently in talks under the auspices of the Labour Relations Commission with a deadline for completion this Friday. I am hopeful that a successful outcome to the discussions will be achieved.

It is in all our interests that An Post continues to be a strong player in the Irish postal market and continues to provide quality services to customers and sustainable employment for staff. The recovery strategy approved by the board of An Post sets out the basis on which the company, in partnership with the trade unions, can move forward.

While my Department is more than willing to assist in any way possible to facilitate an agreement, the responsibility for agreeing and implementing the plan rests primarily with the board, the management and unions in An Post.

With regard to the employee share ownership plan, ESOP, for An Post employees, the Government is fully committed to its implementation as part of an agreed, overall strategy for the company. I commissioned a report by the Ernst & Young consultancy firm to evaluate progress on cost savings within An Post which were agreed with the unions and management as part of the agreement on the ESOP. This report has been submitted to me and is currently under consideration by my Department officials. I expect to bring proposals to Government shortly regarding the ESOP.

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