The House is aware of the very difficult market conditions in the aircraft maintenance sector in Europe and elsewhere and, consequently, the serious problems which have arisen for firms such as Shannon Aerospace. As a result, the company had to formulate a restructuring package to ensure its survival. I participated in difficult discussions in Zurich with the shareholders on the company's future and a framework for further discussions and negotiations between the company and Shannon Development was agreed. Arising from these negotiations and following recommendations from Shannon Development the Government approved a grant support package for Shannon Aerospace.
Revisions will be required in the grant agreement between Shannon Development, Shannon Aerospace and its shareholders to reflect the recent grant support package approved by the Government. The revised agreements will include binding job performance targets, parent company guarantees, grant clawback conditions, and workload commitments by the shareholders. Job targets have been revised downwards from the original projection of 1,075 to 855 and this reflects the difficult market environment.
Shannon Aerospace employs 700 people with high skills in its state of the art plant at Shannon. It operates in an extremely competitive marketplace and, accordingly, it would not be appropriate for me to give details of the conditions which will be included in the revised grant agreement. Legal agreements between Shannon Development and Shannon Aerospace to reflect the new arrangements are in preparation. Shannon Development will ensure that as much protection as possible will be included for the State's investment.
Legal instruments in respect of security for additional State investment in Shannon Aerospace are in the course of being drafted. This security will be in the nature of a charge over assets and will be taken out in favour of Shannon Development. It is in addition to company and parent company guarantees in respect of grants already paid and for which contingent liability clauses already exist in the grant agreement.
The support given by the Government to the Shannon company reflects the excellent productivity and work practices of the staff and workers and the high skill levels of training achieved by them; the substantial flexibility of the workforce with little or no overtime; the recognition by the workforce of the seasonal nature of the workload and the fact that it is widely acknowledged, both here and abroad, that the Shannon plant is one, if not the, most cost effective aircraft maintenance facility in Europe.
In supporting the package proposed, the Government also recognised the serious economic consequences which would arise from the closure of the Shannon facility in terms of job losses, local business and the promotion of Shannon as the location for aviation related and other industries at the Shannon World Aviation Park. Shannon Aerospace has had a major impact on industrial development in the mid west region. This support by the Government should ensure that Shannon Aerospace will benefit from the world and European rationalisation currently under way in the aircraft maintenance sector. The sizeable advantage of the company vis-à-vis its competitors, as I have mentioned, its state of the art technology and its now strengthened financial and other back up support, including workload and marketing by the shareholders, will undoubtedly strengthen its competitive position.
The Government recognises and acknowledges the significant and critical role played by the management and workers in Shannon Aerospace in providing the competitive advantages that a company like this needs. I again pay tribute to the role SIPTU has played during the recent uncertain period.
I assure the Deputy that every effort will be made to ensure that State investment in the company is secured and that it provides the expected return in jobs. In this context, the real security for the existing jobs at Shannon Aerospace and the creation of new jobs is in that commercially viable company.