The Cabinet will hold an emergency discussion later today on the future of TEAM Aer Lingus following the refusal of almost 60 per cent of the workforce to accept a £54.6 million buy-out of their letters of guarantee from Aer Lingus.
The surrender of the letters is a necessary preliminary to the sale of the company to the Danish conglomerate, FLS Aerospace.
The Minister for Public Enterprise, Ms O'Rourke, refused last night to comment on the crisis, which threatens the future of the company and its 1,550 employees. A spokesman said she would wait until she had been briefed on the outcome of the TEAM vote and had had an opportunity to discuss it with her Cabinet colleagues.
Opposition parties are expected to raise the matter in the Dail today. The Labour Party chief whip, Mr Emmet Stagg, confirmed he would attempt to have the matter addressed this evening. Fine Gael will also try to raise the matter.
By yesterday's deadline only 616 workers had returned acceptance forms to the TEAM facilitator, Mr Gerard Durcan SC. One form was spoilt, but the rest accepted the offer. Aer Lingus had indicated it would need an acceptance rate of more than 70 per cent to make the sale of the company to FLS viable.
Last night management representatives reiterated their view that there was no future for the aircraft maintenance subsidiary within the Aer Lingus Group.
They said TEAM was still expected to record a £1.5 million loss in its 1997 annual report, despite a full order book. They say this is because production costs have remained too high.
While management insisted a takeover by FLS presented the best option for TEAM's long-term survival, the group's director of change and restructuring, Mr John Behan, said the situation was "so serious we will need a few days to decide what the future holds".
Union reaction was also muted. Mr Tony Walsh, a SIPTU representative, said: "We will now have to look at the implications of today's decision. We'll be seeking an early meeting with management to consider their perspective. After that we will consult our members on the totality of plans for the future."
The craft group of unions in TEAM, which represents the majority of the workforce, meets later today and is expected to unveil its own plans to save the company. It is likely to begin an intensive political campaign seeking substantial extra investment in TEAM, a minority strategic partner and an employee shareholding scheme similar to that which Ms O'Rourke has approved for Telecom Eireann.
But TEAM may have problems attracting a minority investor, given that it remains unprofitable, and the TEAM workforce has not shown the same willingness as Telecom Eireann workers to embrace new work practices and accept significant redundancies.
Mr Stagg appeared to adopt a measured approach to the crisis last night. "I appreciate the difficult task ahead of the Minister, given the outcome of the vote. It is now back to the drawing board. Aer Lingus and the Government must look at other options," he said. Another mechanism must be found to develop the Aer Lingus subsidiary.
A Fine Gael spokeswoman said the Government's proposal had been "at the heart of its strategy for TEAM Aer Lingus". This was now in tatters. It was up to the Minister to outline immediately what steps she was going to take to ensure the survival of the company, the spokeswoman added.
Unofficial trade union sources within TEAM, who campaigned against acceptance of the buy-out package, reacted angrily last night to a statement by Mr Behan that there was no more money available to buy out letters of guarantee.
"Money was not the issue," one said. He identified the main concerns of those who decided not to return acceptance forms to the facilitator as fears about security of employment with FLS and concern that the Aer Lingus pension fund provision for TEAM employees would be insufficient to meet future liabilities.
Some unofficial sources felt that now the letters of guarantee issue had been disposed of, it would be possible for both sides to approach company restructuring from a traditional industrial relations perspective. "It's early days yet," said one source. "Everyone will have to take stock."
