Private Members' Business. - TEAM Aer Lingus Dispute.

I move:

That Dáil Éireann calls on the Government, without prejudice to its position on the Labour Relations Commission report, to convene a round table discussion on TEAM Aer Lingus for a period of three days commencing tomorrow so as to allow all parties affected an opportunity to speak directly to one another and thereby eliminate the misunderstandings and residues of distrust that are preventing agreement from being reached.

I wish to share my time with Deputies Owen and Richard Bruton.

I am sure that is satisfactory. Agreed.

Reluctantly Fine Gael has been forced to move this motion in Dáil Éireann this evening because of the failure of the Government to broker an agreement between management and unions at TEAM Aer Lingus. I use the word "reluctantly" because Fine Gael took the opportunity last Friday to table a motion on this important issue for inclusion on the Order Paper and to be debated in Private Members' time. I thank the Ceann Comhairle for using his good offices in ensuring that this matter, which is of importance to many families in north Dublin and surrounding areas, would be raised in the Dáil before it goes into recess at the end of this week.

The problems of TEAM Aer Lingus are inexplicably linked with the financial difficulties of its parent company, Aer Lingus, since 1991. No one has to tell the Fine Gael Party that there is a need for financial accountability; no other party has done more to seek greater accountability and the elimination of waste in terms of public expenditure. Accordingly, in order to ensure that there would be some movement by the Minister for Transport, Energy and Communications and the unions and genuine goodwill on both sides, Fine Gael decided to table this motion to give all parties to this long and protracted dispute ample opportunity to broker an agreement or to begin the process of reaching agreement.

Various Fianna Fáil Ministers, particularly Deputies Brennan and Geoghegan-Quinn, failed to take the necessary decisive action to resolve the major problems which threaten the survival of our national airline. In other words, Fianna Fáil led Governments have failed to manage the affairs of this State company. It was only when the Minister for Transport, Energy and Communications, Deputy Cowen, was forced to do so by the banks that he took up the cudgels on behalf of the Government to ensure that the necessary action would be taken to ensure the survival of the national airline. The Minister had a difficult job because this company was in grave financial difficulty due to the inactivity of previous Fianna Fáil Ministers who held that portfolio.

This Fianna Fáil led Government brought all sides to their senses through the Cahill plan which highlighted the decisions which were necessary to ensure the survival of Aer Lingus. Although they have had to endure pain and suffering due to the gross dereliction of duty on the part of Fianna Fáil led Governments, the workforce has accepted the financial medicine which I hope will ensure the viability of this State company. I urge the Minister to seek renegotiation of certain aspects of that agreement and the agreement reached with the European Union in respect of the conditions attached to the investment of State equity in the company regarding quotas for the number of seats on various European routes and the number of aircraft in the fleet to ensure its viability.

From the beginning Fine Gael has advocated that the various issues should be resolved by negotiation. Workers should not be singled out for criticism, especially when one considers the gross mismanagement of the company since it was established. We were all delighted on 2 March 1994 when we learned that agreement had been reached between management and unions on a £14 million cost cutting package to put the company on a sound financial footing. What has gone wrong since? What has changed in respect of the projections made by management?

Although in January 1994 the figures showed a loss of £8 million, the company recorded losses of £32 million to 31 March 1994. Management forecast that the redundancy package would cost £12.5 million, but it is now estimated that it will cost £28 million. Given these miscalculations how could any company expect to survive? I put it to the Minister that he cannot justify the management at TEAM Aer Lingus and allow them to remain in their respective positions when such serious errors have been made on behalf of the Government and the taxpayer. Any private business who behaved in this manner would have been put into liquidation long ago.

Has the Minister been aware of the financial problems at TEAM Aer Lingus for a considerable period of time? Was the Minister aware that the position was getting worse, not better, as management was telling us? Will he indicate why no decisive action was taken before 1994? While I accept that the survival of our national airline was a priority, given that TEAM Aer Lingus had debts of up to £65 million and was losing a substantial amount each month, management had a responsibility to bring these matters to the notice of the Minister and to seek a resolution at the earliest possible opportunity.

I am disappointed that management and unions have not come to a meaningful agreement to ensure the viability of this company long before now. I am aware that they have been negotiating for the past 12 months and trying to reach a deal. As the Minister is aware, difficulties were encountered by the company in 1993 in terms of seasonality. One would have thought that management and unions would have tried to resolve these matters to ensure that the same problems would not re-emerge this year. This is a clear indication that there is mistrust between management and unions and this will make it more difficult to resolve this issue.

Fine Gael has been forced to move this motion in the House — the Government is being stubborn — to ensure that meaningful negotiations can take place over a finite period; we have suggested three days. The report of the Labour Relations Commission is not seen as providing an agreed formula to resolve the dispute. One of the Minister's advisers, Graham Howett of AMA, said that the LRC plan was not necessarily the only plan to ensure the survival and revitalisation of TEAM Aer Lingus. It was always anticipated that the LRC report would be a step along the road towards a negotiated settlement. The Minister for Enterprise and Employment, Deputy Quinn, intervened to ask the LRC to become involved in the dispute and he established an inquiry to find out why management and unions had not reached an agreement.

I ask the Minister to spell out the positive benefits of acceptance of the report and to indicate with his hand on his heart if the report of the LRC will ensure the viability of TEAM Aer Lingus. I want the Minister to openly indicate if this report will help resolve the company's problems and save the maximum number of jobs. Furthermore, I want him to tell the House if he has carried out a professional assessment of the unions' plan. On many occasions we have heard ministerial and Government statements rubbishing the unions' plan as an aspiration rather than a basis for the viability of the company. On what basis did the Government make those statements? Has a professional assessment been carried out by the Minister's advisers? I would be concerned if the Minister was taking the word of the management of TEAM Aer Lingus in regard to a professional assessment of this plan in view of its history to date on the financial dealings of the company.

There is no use the Government insisting on a resolution of the matter by adopting a dictatorial approach if the taxpayer is again expected in the next few years to inject additional equity into the company to resolve its financial difficulties in the short term. PAYE workers and taxpayers in general will not tolerate a continuous policy of high spending and taxation and lack of accountability by Government. This Government was given that message on the doorstep in the run up to the recent European elections. The public does not want a continuation of this wasting of money, the hallmark of Fianna Fáil-led Governments in regard to this airline and company for the past number of years, compounded by inaction and a lack of understanding of the problems inherent in companies such as TEAM Aer Lingus. We cannot allow a highly skilled workforce to go on the scrapheap of unemployment while the Government stands idly by without making an attempt to contact the unions and negotiate a resolution to this dispute.

I was heartened by statements from the Minister last week and believed there was room for manoeuvre in regard to this dispute. On Thursday last in particular, the Minister made an effort to move some way towards bringing together both sides to resolve the dispute. The Minister, his officials or his colleague, Deputy Quinn, should have followed through on those statements by contacting the unions to clarify the messages he gave in this House.

The Labour Party has acted disgracefully in this matter. From the day its leader and his candidates for the last general election went to the Aer Lingus hangar to promise the sun, the moon and the stars to the workers of the airline group there has been an unfortunate sequence of events resulting in hundreds of airline jobs being lost and hundreds more will be lost in the near future. There has also been a huge capital injection of taxpayers' money into the company. The Labour Party displayed the politics of irresponsibility and promise in an unprecedented fashion, but unfortunately it is the workers of TEAM Aer Lingus not the Labour Party who made the promises, who are paying the price for that irresponsibility. We have the spectacle of the Labour Party parliamentary party calling for the unions' plan and the report of the LRC to be jointly discussed to reach agreement, while Labour Ministers within minutes of that statement being made, distance themselves from it. Furthermore, we have the chairman of the Labour Party, Deputy Kemmy, wrestling with his conscience and, once more, failing. How much do the people have to put up with when they know exactly what must be done to resolve the matter?

I call on the Labour Party Members of Dáil Éireann to either put up or shut up about their anxiety to see an agreed resolution of this problem by voting for the Fine Gael motion tomorrow night. It is time those working in TEAM Aer Lingus and the businesses that depend on the economic viability of a successful national airline group were shown the irresponsible and hyprocritical attitude of Government members in north county Dublin and surrounding counties. The least the Minister could do is agree to the Fine Gael motion to sit down with management and unions and his officials and make a final attempt to agree a viable future for TEAM Aer Lingus because many workers and their families depend on the survival of the company.

Like my colleague, Deputy Hogan, I thank the Chair for allowing Fine Gael at short notice to change its motion for Private Members' time tonight. I suspect the Government will try, as the Taoiseach did today, to imply that this involved incompetence on the part of Fine Gael. We did not table the motion last Friday, when we should have tabled a motion for Private Members' time today, because we had reason to believe that the Ministers, Deputies Cowen and Quinn, were as concerned as we were about the future viability and survival of TEAM Aer Lingus. We did not wish to play party politics with the workers in TEAM Aer Lingus or the company. We allowed the weekend to pass without making a move because we had reason to believe the Minister, Deputy Cowen, following many exhortations in this House and elsewhere, would meet the unions over the weekend. I know the unions were standing by in the hope that he would meet with them and that some solution, or at least the mechanism to find one, might be put in place. We appreciate that the Chair changed the rules of the House to allow us take this debate this evening, at a time of impending catastrophe for the thousands of people depending on jobs in TEAM Aer Lingus.

The opening of the TEAM Aer Lingus building on 6 May 1991 — which I had the honour to attend — by the then Taoiseach, Charles Haughey, was warmly welcomed and was a matter of great celebration, particularly by the people of north county Dublin, I am not referring only to the constituency of north county Dublin but to people from areas north of the Liffey into counties Meath and Louth where many skilled people knew they would get good and permanent jobs in the company. At the time the opening was referred to in the newspapers as the jewel in the crown of Aer Lingus.

In his opening speech the then Taoiseach, Mr. Haughey, congratulated all involved in the project, but singled out the workforce. He congratulated Aer Lingus, its board and management "but particularly the workforce who have shown that they recognised the opportunity that existed and who backed that up by making the changes in work organisation and inter-trade flexibility which were necessary to enable this exciting project to get under way and succeed". That praise for the workforce was followed in 1992 by a speech in the Seanad by the Minister's predecessor, Deputy Geoghegan-Quinn, when she stated:

We also have the magnificent TEAM facilities at Dublin Airport. I have had the privilege of examining these personally in depth and comparing them with similar enterprises abroad. In my view the TEAM facilities and workforce are the best I have seen.

Where has that confidence in the workforce gone? Today the jewel has turned to paste and the crown is severely tarnished. It is now claimed by the workers' representatives that the company was seriously under-capitalised from the start and that the £65 million debt was either inherited from the parent company or resulted from bad management forecasts of values of stocks and equipment and interest charges of £12.5 million on borrowing which could not have been foreseen. Whatever the reason for the crisis — obviously there are claims and counter-claims from management about workers and from workers about management — 620 people are out of work and the spouses and children who depend on their salaries are facing a bleak future if those workers go on the dole. A further 120, bringing the figure up to 850, will lose their jobs at the end of the week unless the Government recognises that this motion is the most reasonable we, as an Opposition Party, can table without causing further distrust and lack of confidence workers have in management and management appear to have in the chief shareholder.

The Minister should not tell us, which he may do, that the LRC report is the only answer to the problems in TEAM Aer Lingus. We know from the meeting of the Joint Committee on Commercial State-Sponsored Bodies today that at least one management consultant said that the LRC report is not the be all and the end all. It is a formula for a solution, it is not the formula. The Minister has an opportunity to save face and accept this motion and not to proceed with the amendment he tabled. If he proceeds with that amendment and the LRC's proposal as the only one on the table, I believe the 1,900 jobs in TEAM Aer Lingus will go by the board and the company will go out of business.

How does the Minister propose to replace those jobs and that company? There is work in the international market for its expert staff. The Minister should not tell us, and expect us to believe, that he is prepared to go down the road of allowing the company to close with no chance of reopening and allow its business to flitter away from this country as it has begun to do. As the Government's representative and chief shareholder on behalf of the taxpayer — the taxpayers and not the Minister's or my money keeps such companies viable and allows them to work in the marketplace — the Minister has the responsibility to restore the company to viability and profitability.

To date the actions by the Minister for Transport, Energy and Communications, Deputy Cowen, and his ministerial colleague, Deputy Quinn, have been totally unsatisfactory and unsuccessful. I do not believe they set out to be unsuccessful, but their proposals and actions have not worked and the Minister must be prepared to stand up and say — and it takes courage — that the LRC report was an honest effort to try to get the sides together again, that it has not worked and that we are prepared to sit down to talk again. I am under the impression that the Minister and his ministerial colleague, Deputy Quinn, hope that because the Dáil will go into recess on Friday the problem will die — there will be nobody sitting in the media gallery and nobody will be watching what is happening in TEAM Aer Lingus. As a representative of many of the people who have been laid off, I am not prepared to see that happen and to see this dêbêcle pushed to one side while we get caught up in the usual silly season issues. This is not a silly season issue, it is about people's livelihoods and the disruption of their lives. A representative of 300 wives of the workers in TEAM Aer Lingus told me that many people have already had to consider the possibility of selling their houses as they do not think they will be able to pay their mortgages while on the dole. The Minister should not give us the answers he has given us for the past week and a half that the LRC report is the only answer.

At the meeting of the Joint Committee on Commercial State-sponsored Bodies today which I attended, although I was not entitled to speak, I was concerned about the submission made by the craft unions in which they reiterated that their aims were the same as those of the Minister, of myself, of Fine Gael and other Opposition parties: that they want the company to remain viable and return to profitability. They said that even if they accept the LRC management terms, based on the company's figures, that would result in the saving of 2.6 per cent on total cost. Those savings, when applied to the hourly cost of aircraft overall, result in a reduction from £41.74 to £38.56. We know from the Minister and elsewhere the problem is that the cost per hour of work TEAM can offer to companies looking for their work is too high compared to other companies throughout the world. There is a big difference. Deputies on this side have not managed to get the message through to the Minister that by dealing with the matter as an industrial relations problem only, we are not tackling the root cause of the company losing £1 million per week, with debts of £65 million. Whatever the truth of where that debt came from, it is clear that by dealing only with an industrial relations element of a viability plan, this company may last for only another six months. If the company can reach some agreement on the industrial relations level, that may give the Minister and the Opposition a breathing space; but that will not be the end of the problem. Unfortunately, in October or November we will face the same problems we raised tonight.

I accept the Minister inherited many of these problems from the then Ministers. Deputies Brennan and Geoghegan-Quinn, but he should recognise that the constructive attitude of the unions is one on which he should work. Why in 1991 did the then Taoiseach talk about the workforce recognising the opportunity and being prepared to allow this exciting project to proceed? Why did the then Minister, Deputy Geoghegan-Quinn, say that in her view the workforce were the best she had seen?

The unions have put forward constructive plans in the report they presented at the joint committee today. They listed a number of measures they consider they can offer. If the Minister accepts the motion we have tabled those measures can be on the table for the three day meeting we propose and can be discussed to establish if they will have the same effect as the provisions in the LRC report. We are all in agreement that there are serious problems in TEAM Aer Lingus. If the LRC has come up with one formula, surely it is possible to come up with another with the same net effect acceptable to the unions. I will list the constructive negotiation points which the union put forward. It will offer 100 additional voluntary redundancies over and above the 200 requested to the Cahill Plan. It agrees to total functional flexibility across both engineering groupings, avionic and mechanical. It agrees to numerical flexibility to alleviate the high overtime costs, an issue that has got much publicity. Many of the workers receive high wages because of overtime. It will agree to the hiring of temporary workers, but not exploited Third World cheap labour. It agrees to variable shifts, including night shifts. It will enter discussions with Mr. Donnacha Hurley with a view to agreeing new, enhanced cost-saving arrangements to attract new business and further cost savings totalling an additional £15 million.

I find it impossible to understand, when there is such an open agenda by the workforce, a clear convergence of expectations and needs by the workforce and management, and having regard to the unions' five point plan, that the Minister cannot agree to this motion. I do not know what will happen tomorrow night when this motion is put. I know what the Labour and Fianna Fáil Deputies said when they canvassed the workers of TEAM and its parent company, Aer Lingus, in north Dublin, because I canvassed those people also. They said they would not allow any involuntary redundancies and would ensure that the Government would protect TEAM and their jobs. They cannot continue to put their money on the LRC report when clearly it will not be accepted. There is no divergence among Deputies; we all agree the company must be saved.

The Minister must use his ministerial skills and accept our motion and not push Labour and Fianna Fáil backbench Deputies into voting against it. If they vote against our motion they will have no further credibility with the workforce that they tried to meet over the weekend and about which Deputy Kemmy, Chairman of the Labour Party, once again cried crocodile tears on television saying that the Government must give them another chance. That is what we are offering the Minister and his backbenchers — another chance to talk to the unions. If the Minister puts his Deputies to the point of having to vote against the motion some of the Deputies will jump ship and destabilise the Government; alternatively, they will not jump ship, showing the cynical nature of their commitments to the workforce. The Minister will be responsible for putting his backbenchers in that predicament and, having been a Government backbencher for a long time, I know the difficulty backbenchers face when they are not personally involved in the decision-making process.

There are 1,500 staff who transferred from Aer Lingus to TEAM and it is important to remember how that came about. If the people now working in TEAM had stayed with the parent company where they were, perhaps, cosseted, they would not be facing this crisis. There is a perception that by switching to TEAM they left themselves the butt of all the tidying up that needed to be done when the problem in Aer Lingus was sorted out. There is the perception that problems which should have been handled when the parent company was being dealt with were left until it came to handling TEAM.

A sum of £25 million was promised to TEAM Aer Lingus; £12.5 million was to be for redundancies. On 3 March we listened with great relief to an announcement on "Morning Ireland" that agreement had been reached, that the number of redundancies would be 250 which would cost a certain amount of money and that the remaining £12.5 million would go into the company to assist in opening up the market and making the company more viable. What happened? Hardly had those discussions concluded when we discovered that for some reason somebody, who has not yet been named, made a mistake and the redundancies would cost £28 million. Not only is there not £12.5 million for equity after the redundancies are paid, there is a shortfall of £3 million to pay the redundancies. Somebody's head must roll for such a mistake.

When I heard "Morning Ireland" on 3 March, I heaved a sigh of relief and I remember saying to my husband that I was thankful that an agreement had been reached, that although 250 people would lose their jobs they would, hopefully, be people whose families were reared and who might manage on the redundancy package. I thought an agreement had been reached under which not only would the parent company be solvent but so too would TEAM Aer Lingus. Within days that collapsed. Is it any wonder that there is no trust in the unions and that there is worry about the management in TEAM?

I do not believe all the problems are the fault of management but that, perhaps, the shareholder representatives on the board of TEAM have not been doing their job as effectively as they should. The annual report of 1991 states that the transfer of about 1,500 staff from Aer Lingus to TEAM Aer Lingus was agreed following assurances that their status as Aer Lingus employees would not be diminished by the move and that that agreement, together with the preceding ones on trade integration and productivity, marked a new high in industrial relations and pointed to much greater co-operation between staff and management in meeting the business challenges ahead. There was a firm commitment in the annual report that the workers moving to TEAM had some security of tenure in their jobs.

The report also stated that the TEAM Aer Lingus strategic plan aimed at revenues of IR£144 million and pre-tax profits of £13 million by 1995-96. If in 1991 somebody was making predictions of profits of £13 million by 1995-96, how are we debating losses of £1 million and debts of £65 million? I cannot get to the bottom of what has gone wrong and where the blame lies. It is not fair to blame the workers and to ask them to make all the sacrifices.

If the Minister genuinely wants to see this company survive, his only option is to accept this motion, withdraw his amendment and allow Deputies from both Fianna Fáil and Labour to support this motion. Then there is a chance that by the weekend this company will be moving towards a viability plan that will work and bring the company back to profitability. I wish to share my remaining time with Deputy Richard Bruton.

As a north Dublin Deputy I am very depressed about the developments of recent weeks. There are 1,900 jobs on the line. We have all tried to adopt a constructive approach and this motion is part of that. We see it as a way of trying to break a serious deadlock.

The Government has made the proposals of the Labour Relations Commission a "take it or leave it" package on which there can be no discussion or negotiation. Initially there was not even to be sight of the substance on which the Labour Relations Commission recommendations were based. The Government cannot continue to maintain that position. The Government never signalled that the findings of the Labour Relations Commission inquiry was to become a "take it or leave it" package. Those whe entered in good faith into discussions with the Labour Relations Commission did so on the basis that they were putting forward their sincerely worked out strategy for the future of TEAM. For the Government to allow no further talk on the Labour Relations Commission proposals is not playing the cards fairly.

Everyone, unions included, recognises that TEAM Aer Lingus has a serious problem of competitiveness. No one claims that there is a painless solution to the problems facing TEAM. However, the Minister must recognise that workers in TEAM Aer Lingus have in the past seen management plans unravel rapidly. They need the conviction that this time there is a strategy that offers a chance of success. They do not see that in the Labour Relations Commission proposals. No one would suggest that the Commission, skilled as it is in industrial relations, has the capacity to design a strategy for the future of this company. The only ones who can design the strategy are management, the Government as representative of the taxpayer and shareholder, and the workers and their representatives. All we are asking is an opportunity over the next three days for those three parties to speak directly to each other. We are asking that those parties sort out their differences and any misunderstandings that may have arisen.

The workers demand and deserve to have explained to them the Minister's strategy to create a successful enterprise in TEAM. All they are seeing is a series of cuts. It is important, even from the taxpayer's point of view, that we see the strategy that can convert a company with £65 million accumulated losses and, if we are to believe the Minister, no markets. How do the Minister and management propose to remedy that? I want to know, that as a representative of the people in north Dublin who are making their living directly from TEAM. Almost every business on the north side of the city will be affected if TEAM closes. The Government has built its reputation on the concept of partnership and all we are asking is that it honours that commitment to partnership by sitting down with the three parties involved.

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Dáil Éireann, in view of the immediacy of the financial crisis facing TEAM Aer Lingus, endorses the Government's decision to accept the Labour Relations Commission's settlement terms for the survival of TEAM Aer Lingus and welcomes the Government's commitment to the workers of TEAM that immediately the survival of their company is assured by the acceptance of the LRC settlement terms, their formal proposals will not only be professionally assessed but also implemented if they can be shown to contribute to the company's development."

I wish to share my time with Deputies Kirk and Michael Ahern.

Is that satisfactory? Agreed.

This is the fourth time in the past two weeks I have spoken in the House on the crisis in TEAM Aer Lingus. On each occasion I placed firmly on the record the financial unsustainability of thestatus quo— unsustainability may be too weak a word, the calamitous financial position are probably more appropriate words. It would be a calamity not only for workers in TEAM Aer Lingus and their families if this company is forced to close; it would be a calamity for the whole economy of north County Dublin and the surrounding regions if common sense does not prevail and if people refuse to adapt to changes in the market place.

Aviation and all its constituent sectors are fiercely competitive international businesses in which there is one fundamental principle: the need to adapt to survive. None of us likes change, however, even less do we like the alternative which is sometimes extinction. There is one acid test of any company's standing in the market place and that is the balance sheet. By that yardstick, TEAM has failed, particularly in the last two years. TEAM Aer Lingus has a financial crisis of absolutely enormous magnitude. On normal commercial criteria. TEAM would be insolvent. With continuing losses, huge debts and increasingly more competitive trading conditions the company would be in receivership were it not for the support of the Aer Lingus Group.

There has been an investment of £110 million in TEAM to date, but it has failed to earn a return on this investment. With cumulative negative reserves of £55 million, a negative net worth of £15 million, debts of £69 million and increasingly more competitive difficult trading prospects, its current trading position is unsustainable. Cash resources to fund losses are no longer available. No more debt is available from the banks and the parent company has no spare capital to invest other than the £25 million agreed as part of last year's £175 million rescue package. This is the last opportunity to tackle the core problems of the company which are controllable. Even the £25 million is strictly conditional on agreement within the company on measures which would ensure the long term competitiveness of the company and also on proving this conclusively to the European Commission.

Worse still, the company has an immediate cash crisis — it ran out of cash this month — and it is only suviving because its wages and other bills are being paid by the airline to the extent of £500,000 per week. Let us be clear where that money is coming from. It is coming from cash generated by the airline, due in large measure to the sacrifices of airline staff who have adapted to changes in their market-place. These staff are paid, on average, one-third less than their counterparts in TEAM.

Why is there a crisis in TEAM? It is due, among other things, to changes in conditions in the market. Its competitors have adapted to these changes but unfortunately TEAM has not — it is as unpalatable as that. TEAM has had a captive market in Aer Lingus maintenance. However, as the Aer Lingus fleet has been modernised the quantity of Aer Lingus maintenance has declined. For the first time the airline is only paying open market rates for the maintenance it requires from TEAM. These rates are set by TEAM's competitors who have adapted their work schedules and cost bases to the requirements of the market-place.

The third element of TEAM's revenue is business outside the Aer Lingus Group. This is the litmus test of its ability to survive, not only in the short term but also in the medium to long term and, unfortunately, it currently fails this test. TEAM's outside revenue has fallen by £10 million or 18 per cent, from £57 million in 1992-93 to £47 million in 1993-94. That is a chilling statistic which we cannot wish away. TEAM's market is dwindling.

The crisis at TEAM has been evident for some time. There have been talks for the past 18 months and negotiations for the past nine months. Meanwhile TEAM's competitors have grabbed TEAM's market share as TEAM headed for the financial rocks. It was to keep the company off the rocks that my colleague, the Minister for Enterprise and Employment, Deputy Quinn, invoked for the first time section 38 (2) of the Industrial Relations Act, 1990. This is a clause that is used only in exceptional circumstances and it was invoked when it was clear that a last ditch effort was needed to bring the parties together to discuss common problems.

The crisis in TEAM is not only exceptional; it is immediately critical. We are dealing with the survival of the company, with 2,000 highly skilled, well paid jobs, with the families of these employees who rely on continued employment to pay mortgages and other bills and with the life-blood of the communities in which they live. I understand the problems faced by communities such as this where rationalisation or restructuring of a semi-State company takes place and I empathise with backbench Deputies who receive representations in these circumstances.

I was a backbench Deputy a few years ago when Bord na Móna had to be restructured and 1,200 jobs were lost in my county where there is little alternative employment. In that case there was no equity injection and trading conditions were even worse than for TEAM. If Bord na Móna had not adapted to survive it would not exist today. It has restructured and gained strength again, not employing as many as it did but employing significant numbers in my home county. If change had not taken place, we would not have Bord na Móna, despite the huge contribution it had made in the last 60 years.

TEAM Aer Lingus has made a great contribution since 1980. However, the commercial facts must be confronted if we are to save companies such as TEAM Aer Lingus. There are no easy or half-way-house solutions. The Labour Relations Commission was brought into play because there was no common agenda. There was a stand-off position, with no possibility of a resolution to the problems and different analyses were taken by the two sides in the company. The Labour Relations Commission put forward compromise proposals to deal with the immediate problem. There is much to be done and many decisions to be taken for the medium and long term viablity of TEAM, with the spirit of partnership and co-operation, if the company survives in the short term.

Deputies will be aware of the gravity of such a financial crisis and there is no easy fix solution to the problems. What seem intractable problems can be resolved only on the basis of a co-operative, common sense approach. The LRC were invoked because they were the experts in this area in terms of bringing the two sides together. Unfortunately, no common agenda could be established even at this late stage. The responsibility then is to make decisions that will help us get over the short term problem. The problem will not go away and if we do not resolve it, the situation will deteriorate.

The motivation of Government from day one has not been to precipitate a crisis but to avert it. For the crisis to be averted we require decisions to be taken. There is a prospect, once we avert the short term crisis, of getting into meaningful discussion on the medium and long term strategies to which the workforce can make a real input and in which their proposals can be properly assessed and evaluated. I have made that commitment clear at all times. That is real participation, that is where people are staking out their future, but we must have a corporate entity in existence in order to chart the future.

The financial problems are of such magnitude that, unless we deal with the core issues now, it will be very difficult to see how we can develop medium to long term strategies. We need to deal with the issue very quickly. I have emphasised from day one, for the purpose of everybody understanding the gravity and seriousness of the problem, the need to take on board the LRCs settlement terms as a short term measure, a first step in many that will have to be taken to resolve the problem. The problem is complex and difficult and involves difficult decisions for people on all sides. The problem will not go away and we cannot wish it away.

TEAM Aer Lingus has been involved in this crisis — whether in the parent group or in the company itself — for many months and experts in the area were brought in to try to resolve it. The LRC has seen at first hand the immediacy and extent of the financial crisis facing the company. After 18 months the parties cannot agree a common agenda for talks, let alone a common approach to the resolution of the problem. As I said already, the LRC proposals are compromise terms and represent neither a victory nor a defeat for anyone. They are and must be the basis for settling this dispute. The LRC is critical of both management and unions. However, there is no time for recriminations if we are to prevent the company from closing. There is no point in getting involved in what at this stage would not be a very successful pursuit of an historical grievance, even though the grievance may be justified.

The change in management structures has begun and that process will continue. That is one of the ways in which trust can be re-established to a level that one would expect in a company as modern and as sophisticated as this. That will and must continue, and I have never shied away from it. In the meantime while we are awaiting that to be done, we have a crisis of such urgency and gravity that we must take decisions, accept the framework that is available, build on it and use it as an evolving process by which we can look to other issues that are just as important as the core issues that the LRC proposals throw up.

I contend that we should accept the LRC proposals as the first step in ensuring the short term survival of the company. This is necessary but not sufficient to ensure its medium to long term survival and not its development. The trade unions have made that point and I accept it. Let me reiterate my firm and unequivocal commitment to them that immediately they accept the reduction in the company's cost base, as provided for in the LRC terms, I will have their formal proposals professionally assessed and implemented if they can be shown to contribute to the company's development. I will go even further, I will guarantee that this assessment will be completely independent with, if necessary, an independent chairman and assessors of national and international repute.

Do that now.

I reiterate the Government's commitment that the equity injection for capital development will be made in full once the LRC proposals are accepted and implemented. Lest there be any doubt about our bona fides in this regard, I give a commitment that this investment can be made within one day of my obtaining European Commission approval for it. To get back to the point, however, I cannot get European Commission approval for it until I can establish core viability, and that is what is involved in the LRC proposals.

There is a good deal of common ground between all the parties in this dispute. Everybody accepts that the company is losing money and market share at an accelerating rate. Everybody accepts that this cannot continue and that its unit costs must match those of its competitors. Everybody accepts that unit costs comprise earnings and output. However, what everybody does not accept is whether we tackle earnings or output first. Why not tackle both? The Government is not only willing to do so but will also provide the necessary structures to this end. I urge the trade unions, having reflected on the Government's clarifications and very specific undertakings, to do likewise. It is the only way in which we can approach the resolution of this problem. I believe it is a common sense way in which this matter can be resolved.

Is the Minister's speech to be circulated?

I will arrange for it to be circulated in due course.

I thank the Minister for allowing me this opportunity to contribute to this debate. This debate gives us an opportunity to reflect on the crisis in TEAM Aer Lingus on a day when unions and management put their respective viewpoints to the Joint Committee on Commercial State-sponsored Bodies.

TEAM Aer Lingus, once the jewel in the crown, a flagship company in the aviation sector now stands on the precipice. Worldwide, we have a sinking market and competition is dictating the future of aircraft maintenance. Excess capacity is the order of the day. TEAM Aer Lingus is swimming in shark infested waters. Negotiations on this dispute have been long, protracted and stalemate and stand off have been the outcome. During all that time the trading position of TEAM Aer Lingus has been deteriorating rapidly. Sanity has to prevail. At stake are skilled and highly valued jobs. The industry is part of the economic engine of north County Dublin and further afield. The management were prepared to accept the LRC report but the unions said no to it. I take this opportunity to appeal to them to reconsider their position. There is simply too much at stake; well paid, highly skilled jobs could simply disappear overnight, jobs which it may not be possible to replace if they were to disappear at this time. I believe the future of TEAM Aer Lingus can be re-established. What is needed is common sense to solve an increasingly desperate dilemma. There is need for decisive leadership from the union representatives.

The aviation industry worldwide has gone through convulsions in recent years. There is the question of excess capacity and deregulation. The reality is that the industry here can neither be isolated nor insulated from the changes worldwide. In recent months we have seen the impact of those changes on the parent company, Aer Lingus. There is a great danger that if the problem in TEAM Aer Lingus is not resolved quickly, it will seriously impact on the parent company. There is simply too much at stake for those employed both in TEAM Aer Lingus, the parent company and, indeed, for the country as a whole. We cannot do without our aviation industry.

It may well be that employees of TEAM Aer Lingus find great difficulty in accepting the present position. The reality, however, is that we are in a changing situation and unless common sense prevails there will be a demoralised, desperate and unemployed workforce in north County Dublin and further afield. There is sufficient goodwill and common sense on all sides to come up with a resolution to this problem. The Labour Relations Commission is a credible agency and when it examined the various aspects involved in the TEAM Aer Lingus crisis, its recommendations were not made lightly. Those recommendations, which have been accepted by management, will form the basis of saving the company.

I appeal to the unions tonight to reconsider their position and their attitude towards the LRC report. If they do the jobs in the company can be secured for many years. Against the background of excess capacity and with competition becoming even more cut-throat, if we are not in a position to compete in the marketplace, job losses will inevitably become the order of the day. That must not happen, there is simply too much at stake, particularly for the employees of the company.

Representatives of both unions and management attended a meeting of the Joint Committee on Commercial State-sponsored Bodies today and put their respective points of view. Those views are strongly held but one must clinically analyse what is best for the company. As a humble backbencher I have not had access to the LRC's recommendations but I am prepared to accept the word of Minister Cowen in the matter. He believes it will save TEAM Aer Lingus and will form the basis of its future prosperity. While there continues to be a real danger that the company's future could be in serious jeopardy, we must all resolve, particularly the union leadership, to talk to the workers and convince them that it is in their best interests to accept the recommendations of the LRC. In the years ahead they will be grateful that they took that decision.

I am grateful for the opportunity to speak on this important issue. Looking at the issue from a distance we can all be objective to some degree. We are all well aware of the critical sitution in TEAM Aer Lingus. This has not occurred overnight. The aviation industry has changed due to the Gulf War and the fall of Communism in Eastern Europe. The projections when TEAM Aer Lingus was established were based on estimates which, due to the changes that have taken place in recent years, have altered. As a result, TEAM has suffered a loss of its market share and its revenue has fallen. In addition, there have been changes within the company. New aircraft were bought which do not require the same amount of maintenance work as the older aircraft.

It is accepted by all sides that the reason for the current crisis is the unit costs and that problem must be faced by management and the workforce. The two sides are looking at the problem from different perspectives. The aim is to get costs under control. Should income be increased or should the expenditure be reduced? That is the problem facing TEAM.

From what I heard today at the meeting of the Joint Committee on Commercial State-sponsored Bodies the management proposals are being condemned because of past bad management. The new management in TEAM Aer Lingus should be given an opportunity to prove its plans. The unions should be heard also and the Minister made it clear tonight, as he did on other occasions, that he is willing to discuss the unions' viewpoint but that the LRC report should be accepted before those views would be taken into account. Those views have been taken into account but, in order to get to the discussion table, they should accept the LRC report and progress further with management and the Minister to get TEAM Aer Lingus back to its previous position.

There are two critical elements regarding TEAM Aer Lingus. The company must be maintained and developed. If the unions do not agree to the Minister's proposals, accept the LRC recommendations and return to the negotiating table, the future of TEAM Aer Lingus is dark.

I wish to share my time with Deputy Durkan.

Is that agreed? Agreed.

The serious crisis facing TEAM Aer Lingus has dominated the media for some time. We are now at the eleventh hour and the problem is almost regarded as a time bomb which is ticking away. This constructive motion was tabled in an effort to seek a solution and get us out of the current impasse. None of us would wish to see anything happen to this company particularly when one considers the skills of its workforce.

Members of the Joint Committee on Commercial State-sponsored Bodies were firmly focused on the issue today when we met representatives from the trade unions and the management of TEAM. The deep, innate hostility that exists between the craft unions and the management was obvious. That is regrettable to a certain degree but both are entitled to their viewpoint. When Mr. Bernie Cahill met the joint committee on 9 July 1993 most attention focused on Aer Lingus. Mr. Cahill, referring to TEAM Aer Lingus, complained about some past investment decisions made by the company. He complained also about inefficiencies there when compared with similar work carried out on the world market. We all agree it is a competitive industry. The Government stated firmly that the unions must accept the report of the Labour Relations Commission. I do not think they know how the unions feel about the report. They anticipated that there would be an inquiry and they regard the document as an industrial relations one. They feel bitter about the Labour Relations Commission. They say the proposals are "grossly stupid, incompetent and irresponsible". Having used that kind of language can anyone see the unions accepting the document?

It was envisaged that the hourly rate would be reduced from £41.74 to £38.56 if the proposals were accepted, yet, on 9 July, 1993 Bernie Cahill said a charge of £33 an hour was needed to be viable and competitive. Management dismissed the proposals put forward by the trade unions. In its document it set out many areas where management could achieve extra man hours. However, management dismissed them and said they were in most of the areas already.

There is great bitterness and hostility and it is obvious, given the problems that exist between management and the unions, that outside intervention is needed. A spokesperson said today that there had been many hours of negotiations but, listening to some of the representatives, I cannot help but feel they were fruitless and unproductive. I was surprised when, in reply to a question about whether the trade union document had been discussed with any Minister or analysed by the Government, a senior trade union offical pointed out that when he tried to contact the Minister for Transport, Energy and Communications, Deputy Cowen or the Minister for Enterprise and Employment, Deputy Quinn, he ended up speaking to a programme manager, Mr. Roche. It is easy to understand why there is so much frustration. It is almost like trying to make an influential decision by remote control.

I shudder to think of what is likely to happen if there is no outside intervention or if the formula Fine Gael put forward to resolve the problem is not used. In fairness to the unions, they put forward proposals and went some way to try to achieve cost economies in their document. Management are always quick to look for a reduction in workers' labour rates but will they take a 20 per cent or similar reduction themselves and lead by example? Many of the problems were created by management in the past.

I call on the Minister to accept this motion in the spirit in which it was tabled. We are all frustrated and if we prevaricate on the issue the sword of Damocles will continue to hang over the company. Unless there is outside intervention it is difficult to see how any discussions could be entered into between the management and the craft union. I hope the Minister will take that initiative.

I am pleased to have an opportunity to speak on the motion. Many constituents expressed their concern to me about the future of TEAM Aer Lingus. What amuses me, if amusement is not out of place, is the concern which has suddenly erupted from the concerned six and Fianna Fáil backbenchers who seem to have realised only in the last few weeks the seriousness of the problems affecting TEAM Aer Lingus. The callousness with which the workers were ignored up to this is reflected in the way Government backbenchers now want to be seen to be doing something about an issue they knew of at least a year ago.

We went to the ALSAA building in 1993 when the Cahill rescue plan was discussed. While that was the main issue at the time, the TEAM Aer Lingus workforce approached us and told us the problems that were likely to arise. They expressed concern about the future of TEAM Aer Lingus, its work practices and expressed worries about their families, mortgages and the future. Despite the concern expressed by the Government it had no intention of dealing with the TEAM Aer Lingus problem at that time.

No doubt everyone is impressed by the Government's concern, some of it legitimate, but essentially it has turned into union bashing. Far be it from me to say the unions are always right but, instead of bashing them, perhaps the Government should have listened to what they said six months ago. If it had perhaps we would not be in this position now. Was it their intention to resolve the problems in Aer Lingus piecemeal and isolate the main parent body, get the maximum number of redundancies there and then turn to the subsidiaries? That is what it looks like.

The unions were conned and outwitted by the Government. Stark proposals have been laid before the workforce and they have been told to take them or leave them. If they do not accept the proposals of the Labour Relations Commission, the company will be in jeopardy. Surely that was obvious to the Government a year ago? If the workforce in TEAM Aer Lingus were told, surely the people in the seat of power were told? It is shedding crocodile tears at this stage for Government backbenchers to express concern, sympathy and pity for the people involved.

The Government parties knew about the problems a year ago yet they did nothing to alleviate them. The difficulties were clearly identified by the workers in TEAM Aer Lingus at that time. A year ago my constituents who work in TEAM Aer Lingus pointed out the difficulties to me. Everybody now wants to back the unions. I am not attempting to suggest that all the faults are on one side but at least the workforce was prepared to identify the problems at that time. Why did the Government not identify the problems and come forward with solutions? Why did concerned Government backbenchers not come forward six or eight months ago and identify with the workers?

Some of us did.

Why has this matter suddenly become the responsibility of the unions? If a firm is not operating properly and efficiently it is the fault in the first instance of management.

Like me, other Deputies can go back as far as they want in labour relations, and whenever management say that the union has taken over — it blames the union for everything that happened afterwards — it is a sure sign that it failed in its duty to identify the problems at an early stage. The TEAM Aer Lingus workers have been told they must accept redundancies and pay cuts and change their work practices. Why have these proposals suddenly been put on the table? Why were they not thrashed out previously? Did anyone on the Government benches identify the problems? If the workers and unions could identify the problems, why could the Government not do so?

They were discussed last February-March but there were no conclusions.

The Deputy in possession without interruption, please.

They were not dealt with because, despite their concern, the Government parties did not have the guts in late 1993 to tell the workforce in TEAM Aer Lingus what the real problems were.

They were discussed.

The Government cleverly pretended to resolve the parent body's problems while at the same time isolating TEAM Aer Lingus and, unfortunately, its workforce have become the whipping boys and girls for the two Government parties.

When we visited the very well attended meeting in the ALSAA building in 1993 only one representative of each political party was allowed to speak. I was sorry I and others did not have the opportunity to speak because if we had the issues now being discussed would have been aired to a much greater extent. I want to give a few examples of the difficulties identified by the workforce at that time. They told us that, given the work practices, they did not see how TEAM Aer Lingus could survive in future, contracts were not being fulfilled and the resources of the company were not being utilised in the interests of ensuring the viability of the company in the future. It seemed that somebody somewhere had a proposal that these matters should be dealt with at a later stage. That is exactly what happened; these matters are now being dealt with at the eleventh hour.

No long term plan has been put forward for the company. The Government parties supported the rescue package for Aer Lingus, the ultimate resolution to the problems. As we now see it did not solve all the problems. Some of us expressed concern and dissatisfaction about the rescue package because of the information we were getting from our constituents, who apparently do not seem to rate very highly with the Government and its backbenchers.

What is the Deputy's solution?

If the very articulate Deputy sitting across from me had expressed his reservations six months ago we might not have this situation on our hands.

The public record——

The newspapers now refer to the concerned Fianna Fáil backbenchers who are deeply upset about the problems of TEAM Aer Lingus. Where were they before this? Did they mislead the people in TEAM Aer Lingus?

Did they tell them that everything would be all right on the night, that when the problems of Aer Lingus were resolved the problems of TEAM Aer Lingus would also be resolved? That is not the information I received.

The Deputy has great vision.

It is a great pity that the vision the Deputy attributes to the Opposition does not exist in the Government parties. With no disrespect to them, the "concerned six" remind me of a striker in a football team who hangs around the box and makes great shapes until the ball is passed to him and then kicks it in the opposite direction. The concern expressed by them in recent weeks——

The Deputy has no concern for any worker and never had.

All they were doing was defusing the situation, keeping the lid on it.

Seán was going to resign.

They were keeping the craft unions down, keeping them in the corner and on side.

The Deputy would not know what a craft union is.

They were ensuring they did not explode or cause any embarrassment for the Government. In the final cynical act, the concerned Fianna Fáil group came on the scene on cue in recent days, rowed in strongly behind their colleagues and made it appear that they had suddenly got a telephone call about the seriousness of the problem.

This is a serious matter and the Deputy should not be talking such rubbish.

The Member in possession without interruption, please.

The workers in Aer Lingus know the Deputy's record.

These remarks are obviously beginning to hurt Deputy Callely, who should not allow his blood pressure to rise.

If this is the best the Deputy can do on this very serious matter it is a very poor showing.

If he had expressed his concerns at Fianna Fáil parliamentary party meetings during the past 12 months we would not be faced with this problem today.


Deputy Durkan, without interruption.

I am sure Fine Gael could have brought in somebody better to filibuster.

Deputy Callely knows better than anybody else that it is no use closing the door after the horse has bolted.

If the Deputy had his way he would privatise——

I am amazed he had the gall to come into the House.

The amount of bullshit——

With no disrespect to Deputy Ryan, when I hear the concern of Government backbenchers I——

All we have had from the Deputy is 20 minutes of rubbish.

Deputy Callely, please desist. The Deputy in possession must be allowed to continue without interruption.

Can we have something else besides rubbish?

I am sorry that the unfortunate workforce in TEAM Aer Lingus has been subjected to the type of charade we have witnessed in recent weeks.

We are seeing one now.

It is disgraceful that the Government should have misled the company and pretended to work on behalf of its constituents working there. It has misled and hoodwinked them to the extent——

They know the Deputy's record.

——that it is now pretending to be on both sides. There is no place in this business for people who want to be on both sides. The time for this was six months ago when the workers in TEAM Aer Lingus should have been told about the Government's real concerns. They should have been told at that time that when the Cahill plan was accepted it would look at the subsidiaries and not unfold the full significance or venom of its proposals until that plan had been put safely to bed.

This is a disgraceful contribution.

A hatchet man.

The reason this was not done is that the two Government parties could not come into the House and speak with one voice on the future of Aer Lingus——

The Deputy is getting a reputation as a——

——despite repeated promises both before and after the last general election and the Cahill plan was put——

If the Deputy's party was in Government they would not get a penny.

You would not get two quotas now.

At the time the Cahill plan was put to the Government neither the concerned Labour Party nor the recently concerned Fianna Fáil backbenchers had the guts to stand up at their parliamentary party meetings and tell the leaders of their parties what their concerns were and what should be done.

We will tell the Deputy what happened.

They have come on side at this late juncture and expressed their concerns. They have torn their hair and beaten their breasts. We have heard that sort of nonsense as often as we heard about the drainage of the Shannon. I sincerely hope that TEAM Aer Lingus survives.

The three Ds, disgraceful, disgusting and distasteful.

In conclusion, the only disgrace here is that people like Deputy Callely have the brass and sheer hard neck to come into the House and attempt to justify their position.

Debate adjourned.