Seán Sherlock (Cork East, Labour)
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I express my solidarity with the more than 200 workers who find themselves in a position where they are going to lose their jobs. There are some 240 jobs, 161 part time and 79 full time, on the line at the Cork mails centre. I anticipate that the Minister will tell us he has no operational involvement in decisions of this nature. It is important, however, that we have an opportunity to raise our concerns about this decision. Those concerns are based on the fact that it is difficult to see the justification for the closure of this mails centre. An Post is telling us that its operating profit last year was €41 million and that there was a 7% rise in revenue as well as a 40% rise in parcels volumes. The company's justification for the closure of the Cork plant is that the centre is operating 25% below capacity due to the decline in traditional mails volumes. It is difficult for me, and the workers, to reconcile that fact with the 40% rise in the parcels delivery volume last year. That surely represents an opportunity. If that business is growing, An Post should ensure that all of its sorting and mails centres are included within the mix.

The people of Cork are disgusted by An Post's decision to cull, in a very political way, the Cork mails centre because they see no justification for this decision. The excuse that there is a decline in traditional mails when the evidence shows an increase in revenue from the rise in parcels volumes does not stand up to scrutiny. The decision is made and I note that the narrative has now moved on to trying to get the best deal possible for the workers. Let us remember that there are 161 part-time workers and 79 full-time workers. I raise this issue because we have to understand, at a time when parcel volumes are increasing across various business sectors, why An Post is excising one of its key centres and sacrificing one of its mail centres. To my mind, that does not stand up to scrutiny. I am raising this with the Minister because it is important that there is a political response from the Government regarding this issue.

Richard Bruton (Dublin Bay North, Fine Gael)
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There is no doubt that this is a difficult day for the workers directly affected by this decision. I assure the Deputy that not only will good terms and conditions be offered to the workers but every support will also be made available by the company and, indeed, by the State to support them at this difficult time. The company has outlined some of the supports that will be provided. These include efforts to redeploy staff as well as offers of support for training and education. The centre will be phased out and continuing support will be offered.

Deputy Sherlock raised the question of why a company undergoing difficult structural change should make a decision like this. I am conscious that some years ago An Post's survival was on the line. That was the reality given the long-term decline of its mails operation. The company needed to dramatically diversify its business. It entered into negotiations with its workforce to try to devise a strategy to make a successful transition. A modest pay agreement was part of that strategy but there was also a structural plan which involved the closure of one of its mail centres. The difficulty is that there is a long-term structural decline in mails volume, as the Deputy recognises. An Post had too much capacity in that area but not enough capacity in the areas where it sought to grow, including in new services, such as financial services through the post office network and online services as well as parcel delivery services. An Post has successfully done that following the changes which were negotiated.

The company's announcement makes it clear that while it was forced to make this decision, which was part of the original negotiated deal, it is also making a significant investment in the Cork region. It is doing that to put the company in a position to build out the opportunity in parcels delivery. An Post is making a conscious decision to expand its capacity in that area and it has listed some of the investments it will be making. These include parcels lockers, a major parcels delivery centre, and a new electric, zero emissions, delivery fleet. The company is, therefore, upgrading and changing its business model to meet the new opportunity. There is no doubt that this is a painful decision. It is being taken, however, in the best interests of making sure that the company can continue to deliver a quality service to its customers, ensure it is attuned to changing needs and can secure the future for its workers by making the plans and changes necessary to support An Post's prosperity into the future.

Deputy Sherlock is, of course, right that, under legislation, we do entrust day-to-day decision-making on these matters not to Ministers but to the company. The Deputy will have been here last week when the case was being made for another of the centres that it was felt was under threat. It would be very invidious if these decisions were taken on a political basis. They had to be taken by the company, based on its assessment of the best interests of the company, its customers and its workers. This is a disappointing day for those people who have been adversely affected but the closure has nothing to do with the very high quality of workmanship that was being delivered in Cork. This decision is being taken in the long-term interests of the company's capacity to sustain employment and service its customer base.

Seán Sherlock (Cork East, Labour)
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Is that not the point? We do not know which of the centres was the most efficient. We have not had sight of the McKinsey report so we do not know for sure which of the centres was the least efficient. This was a political decision. I believe An Post went for the political path of least resistance. The Cork mails centre was sacrificed on the altar on that basis. I was hoping that in Government circles there would have been a greater degree of resistance by those at Cabinet and that there would have been some fight for Cork. That has not been the case, as it transpires.

I will make a prediction. I forecast that this is the beginning of the end of the universal service obligation and the five-day delivery service. We are starting to get rid of mails centres and post offices and that is clothed in the pretence of investment in the General Post Office, GPO, on Oliver Plunkett Street and a new delivery unit being opened in Skibbereen. Those are all welcome changes but they are piecemeal. The structural long-term objective of An Post is to go down to a three, a two or even a one-day delivery service in certain parts of the country. That is where we are heading and that has to be called out. If we do not stand up for jobs in Cork and for what could be a viable business, which could operate at capacity, on the basis of the argument that An Post itself makes regarding a significant rise in parcels volumes, then I think that is bad day for the postal service in this country.

Richard Bruton (Dublin Bay North, Fine Gael)
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I have to disagree with the Deputy. He is advocating that this decision should have been politicised. He is suggesting that this decision should have been taken around the Cabinet table, with people muscling one another as to whether this should have been in favour of one part of the community or another.

That vision of how decisions should be made is not one to which I subscribe. The decision must be based on a fair assessment of the long-term interests of the company, its customers and workers and-----

Seán Sherlock (Cork East, Labour)
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With all due respect to the Minister, we have not had sight of the McKinsey report. The decision was not based on the efficiency model.

Bernard Durkan (Kildare North, Fine Gael)
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One voice, please.

Richard Bruton (Dublin Bay North, Fine Gael)
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The Deputy can, of course, express scepticism about how the company reached its decision-----

Seán Sherlock (Cork East, Labour)
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It is more than scepticism.

Richard Bruton (Dublin Bay North, Fine Gael)
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-----but that is not what he advocated. He said it should be a question of muscling at the Cabinet table-----

Seán Sherlock (Cork East, Labour)
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I am advocating a more rigorous political examination of decisions.

Richard Bruton (Dublin Bay North, Fine Gael)
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-----to make a decision about State companies that we rightly say should be run independently for the benefit of the public, their workers and the customers they serve.

The Government does not in any way countenance a reduction of services from five-day delivery, on which this and previous Governments have insisted. That is the obligation of An Post. The Deputy has to recognise that any company that wants to survive must accept that what customers want is changing. A company that continues to do what it has always done and refuses to look at what would copperfasten its future will not survive for very long. At one stage An Post was looking down the barrel of this reality and restructured. I agree absolutely that this is a very disappointing day for the workers in Cork who have been exemplary in their service. Nonetheless, it is an important part of a process by which the company will become strong for the future. The 1,000 people who work for the company in Cork can know that the company will sustain their livelihoods based on a sound business model. That is the other side of it; the company is doing what is in the long-term interests of its workers and customers.