Dáil debates

Wednesday, 18 February 2009

8:00 pm

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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With the indulgence of the Ceann Comhairle I would like to share time with Deputy Shortall. Last Thursday morning the 1,135 workers at SR Technics were given the devastating news of the closure of the company's operation at Dublin Airport. Mr. Bernd Kessler, the chief executive of SR Technics, blamed the loss of major customers at the Dublin Airport facility, the downturn in the aviation business due to the recession and the so-called high cost base of the operation. Mr. Kessler said that the closure came after an in-depth review of all lines of business across the SR group.

The news is a shocking body blow to Swords and the whole north side of Dublin, west Dublin and much of east Leinster, including Meath and Kildare. For the 1,135 workers and their families the loss of their livelihoods is a cruel blow at the worst of economic times. Many of the families concerned had several family members involved and much of the workforce had vast aviation engineering experience going back to their days in Aer Lingus, Team Aer Lingus and FLS. For all of them, an SR Technics closure would be a dreadful tragedy. When I repeatedly tried to raise the matter last Thursday before being asked to leave the House by the Ceann Comhairle, I noted the major negative impact of the decision on thousands of other workers in the SR supply chain and on their families.

The first major question which arises since Thursday is why nothing was done to prevent this disaster by Bernd Kessler of SR Technics of Zurich and the majority Middle Eastern owners, Mubadala Development, Dubai Aerospace Enterprise and Istithmar. When distinguished journalists were asking questions about the future of SR Technics six months ago, why was there no information or consultation with workers by Mr. Kessler and his colleagues? Over recent months, why were there not intensive discussions with the workforce and indeed all airport stakeholders to find a way forward?

A second, even more important question, arises. Last Friday and Saturday, I met many members of the SR workforce in my constituency. The overwhelming impression they gave me is that SR Technics should not be closing and that every effort should be made to rescue the company as a going concern. The workers detailed their excellent engineering and economic performance from Team Aer Lingus through the FLS period up to the present. Their renowned expertise in aircraft overhaul, the landing gear division, the auxiliary powers unit, line maintenance and the aircraft garage was recognised throughout the world. Critically, they believe that costs in Dublin were always sustainable but that their Zurich headquarters inflated charges to present the Dublin operation as unviable.

The last SR Technics Holdings annual report seems strongly to support the workers' case. The loss of the Aer Lingus contracts was a direct result of privatisation, which the Labour Party fiercely opposed, but it is also striking that there are ongoing problems with the Aer Lingus French contracts and that Gulf Air tried unsuccessfully to persuade SR Technics to keep the Gulf Air contract in Dublin. It is also alleged that many other airline contracts were deliberately diverted from Dublin. There is a profound suspicion that SR Technics Dublin is being closed to take capacity out of the air maintenance market and to destroy competition for the Zurich and Middle East facilities of SR Technics and its owners.

As I have told the Taoiseach over the past three days in the Dáil, his performance and that of the Tánaiste, IDA Ireland and the other State agencies involved has been appalling in the SR Technics matter. Nothing seems to have been done over many months to protect the 1,200 jobs. Once more we had a last minute meeting between the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Coughlan, and an endangered company, which achieved nothing as usual.

A closure cannot be countenanced by the Irish State and aviation interests. If a sale, a management buy-out or a management worker partnership can be developed to run SR Technics as a going concern, what assistance can the Minister, Dublin Airport stakeholders and job creation agencies offer to any rescue plan?

We are putting €7 billion into insolvent banks but letting jobs in other sectors, including the critical aviation sector, evaporate. Let us start the jobs fightback by retaining the 1,200 jobs in aviation maintenance at Dublin Airport.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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I thank Deputy Broughan for sharing time. I am very disappointed that the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Coughlan, chose to leave the Chamber. She was in the Chamber for the vote but she chose to leave rather than stay for this Adjournment debate. I thank the Minister of State, Deputy Kelleher, for attending but it is regrettable that the senior Minister did not choose to stay here to deal with this debate. Unfortunately, that has been a feature of the way in which she has dealt with this issue since it first arose. It seems impossible to pin her down. A number of requests by Deputy Broughan and I and other members of the Labour Party have been made for a meeting to deal with this urgent situation. Unfortunately, she has not seen fit to agree to that.

Like other representatives on the north side of Dublin, I have a deep concern at what is happening at the airport. There were more than 1,100 highly-skilled, good-quality, high net worth jobs in the airport. The outfit was very successful, as Team Aer Lingus first, then as FLS and more recently has SR Technics.

The jobs are important to the to the region, and the downstream jobs that arose because of this quality employment are too numerous to mention. Those jobs are in serious jeopardy. The company was very successful and it had a fine facility at Dublin doing excellent work with a first class safety record.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Hear, hear.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Out of the blue, the decision was taken to shift the operation. The decision was taken by people with no loyalty to this country, no consideration of the downstream effect of the decision on the region and no consideration by the Minister. It will affect the entire north Dublin region. It appears there was one brief meeting before the announcement was made. What happened at that meeting and did the Tánaiste, Deputy Coughlan, make any serious attempt to hold on to the jobs? I do not believe she did.

The management told us at the time that the reason they were pulling out was because costs were 20% over what they regarded as acceptable. What was done about that and what opportunity was given to deal with those overruns in costs? Those jobs could have been saved if the Minister had made a serious effort. I call on the Minister at this late stage to get the finger out, speak to the management in SR Technics and do everything she possibly can to protect and maintain those jobs for the north side of Dublin. We cannot afford to lose them.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Hear, hear.

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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It is with regret that the Government learned of the closure of SR Technics in Dublin Airport. I thank the Deputies for raising the matter and I know the Tánaiste's office has been in contact with Deputy Broughan in the context of arranging a meeting next week to discuss the issue. All Members of the Dáil know well the impact that job losses have on a community, individuals and families. These job losses will have a major impact on the employees and the broader community. Fianna Fáil members also had a meeting tonight to discuss this issue so everybody on all sides of the House shares the concerns of the Deputies opposite.

The Government learned about the closure of SR Technics recently, although the company's operation in Cork, which employs approximately 200 persons, remains unaffected. The Tánaiste met with representatives of the company on 11 February, along with the Secretary General of the Department and the chief executive officer of IDA Ireland. A number of meetings had taken place between State officials, agencies and the company in the past year. The company explained that it had been exploring all options for its Dublin operations, including a sale to another party. Unfortunately, it was determined that it was not possible to proceed with any of these options.

The company explained the global deterioration that had taken place in its business since mid-2008, with contracts moving to eastern Europe, Jordan, Turkey and Malta. The company confirmed that it was putting in place a five-year restructuring plan and that it had already reduced its worldwide workforce by 500 in the past year. The company stated that the recent loss of major contracts, current business and economic forecasts, along with the high cost base and over-capacity at Dublin Airport, made it impossible to continue a sustainable business in Dublin.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Was any attempt made to deal with that cost base?

Photo of John O'DonoghueJohn O'Donoghue (Kerry South, Ceann Comhairle)
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The Deputy has said her piece.

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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SR Technics provides line maintenance for the Aer Lingus fleet at the Dublin base. This is a long-term contract awarded by Aer Lingus in 2008 following a competitive procurement process. The company has indicated that it hopes to assign this and other smaller operations to another operator, which offers the potential of saving up to 200 jobs. Pending the outcome of negotiations on this issue, the company could not give the Tánaiste a definitive figure on the actual number of jobs likely to be saved. However, SR Technics will continue the line maintenance operations for the present.

IDA Ireland has had an ongoing relationship with the company over many years and approved a significant training grant package for the company in 2006 to assist it in maximising efficiencies and improving competitiveness. IDA also had discussions with the company on its business plan and further opportunities to assist the company with additional financial incentives such as research and development support with the emphasis on innovation and process development.

The Tánaiste will also be meeting union representatives to hear their concerns and to consider any proposals which they might have, and any assistance which the State development agencies, under her auspices, might be able to provide. This is in addition to supporting the workers in finding new employment, including assistance to re-skill and retrain to enhance their future employment potential. Any involvement by the State agencies, IDA Ireland or Enterprise Ireland——

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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What is being done to save the existing jobs?

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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——in regard to seeking the retention of any work currently carried out by SR Technics in Dublin will be dependent on a company or companies submitting proposals for consideration and seeking approval for State support for an undertaking in the normal way. We fully understand the concerns of the Deputies.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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When will the Tánaiste meet with us?

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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I believe there is a letter on its way indicating the Tánaiste will meet the Deputy next week to discuss the matters. I am sure Deputy Shortall could attend as well.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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It is about maintaining jobs. What was done to tackle the cost base?

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)
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The State agencies had several discussions with SR Technics over a prolonged period of time. They looked at grants, availability of training and provision of business plans, etc. The State has tried to do everything possible to assist the company.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Was there any attempt to reduce the cost base?