The seemingly interminable crisis at TEAM Aer Lingus has deepened with the refusal of some 60 per cent of the workforce to accept a £54 million buy-out of their letters of guarantee from Aer Lingus. In truth, there is something surreal about the situation; a group of workers has voted not to sell a company which they do not own. The misguided decision to provide `letters of guarantee' to Aer Lingus personnel when they transferred to TEAM in 1990 remains a formidable barrier to progress.
At this juncture the workers have opted for the devil they know; a majority will not accept the buyout of their letters of guarantee - even though this is a necessary preliminary to the sale of the company to the Danish company FLS Aerospace. It is a short-sighted and unwise approach with potentially disastrous consequences for TEAM and, not least, for Aer Lingus itself.
TEAM Aer Lingus is not an industrial basketcase. It has a fine reputation in the international aircraft maintenance sector, where the skills of its workforce are widely recognised. But TEAM, as a relatively small player, cannot stand aside from the trend towards consolidation in the industry. It cannot compete with the economies of scale enjoyed by the bigger companies in the field. And it faces stiff competition from companies benefitting from low-cost labour in the US and Asia; aircraft in need of maintenance can be flown by their owners to where service and price are keenest.
In the circumstances, TEAM`s long-term future can only be assured by a strategic alliance with the likes of FLS who have the financial muscle that TEAM needs to grow and expand. The sole alternative - TEAM remaining part of Aer Lingus for the next two or three years - will not provide any long term guarantees. And it could inflict great collateral damage on the airline which has worked hard to turn its business around.
As it is, the £54 million package has not been enough for the workers: they want the contracts bought out but also a guarantee of continued employment by the Danes. That would be indeed a sweet deal, reminiscent of something Mr Charles Haughey once accorded to a group of car assembly workers in north Dublin. The world has moved on since then; the days when the State as shareholder had limitless pockets to support uncommercial aspirations have long ended.
The TEAM workers are, presumably, not unaware of their competitive disadvantage and their limited options. But they have chosen to ignore the realities of the market place. Perhaps one should not be unduly surprised. A long history of indulgence by Government has apparently persuaded a majority that they can extract still greater concessions. The decision of the Government to procrastinate on TEAM until after the Dublin North by-election was a further example of this: it sent precisely the wrong signal to the TEAM workers, at a time when a firm hand and some strong conviction were required.
The Government is now, belatedly, talking tough. Some `clarification' on the £54 million offer, notably on pension rights, appears possible. But the Minister for Public Enterprise, Mrs O' Rourke, will not countenance any increased offer. The pity is that this kind of resolution was not shown at an earlier stage - before TEAM reached this very difficult pass.