Swiss aircraft maintenance company to fold in Dublin

Efforts are continuing to establish a new operation at the Dublin plant of the Swiss-owned aircraft maintenance company, SR Technics, which is to close with the loss of 1,100 jobs. Meanwhile, the workers have protested over the redundancy package on offer, as well as the €26 million deficit in the pension fund. However, trade unions acknowledge that wage costs were significantly out of line with those of competitors.

Closure announcement

The announcement in January 2009 that the Swiss-owned company SR Technics is to shut its plant at Dublin Airport has sparked a furious reaction by trade unions at the aircraft maintenance operation, where 1,100 workers are to lose their jobs. SR Technics planned to terminate the employment contracts of up to 600 workers by April 2009, while about 100 staff were to be kept on until the middle of April. The remaining employees will continue working until the end of August 2009. A smaller facility in Cork is unaffected by the cutbacks.

Redundancy package disputed

The workers in Dublin have protested at the Swiss embassy and the offices of the European Commission, seeking higher severance terms than those on offer, as well as some commitment from the company to tackle an estimated €26 million shortfall in the pension fund.

However, SR Technics stated that it will not be in a position to meet any financial shortfall in their pension fund. It explained that the redundancy package on offer to staff and its ability to fund the pension scheme was ‘limited by the financial resources available to the wider group in the context of severely challenging market conditions and the need to restructure the group to ensure its survival’.

The redundancy package is worth an average of about 3.6 weeks of pay for each year of service, which amounts to around €72,000 for those with up to 35 years of service or €36,000 for those with 16 years of service. It has been estimated that the average package would result in payments of about €50,000 to €55,000 for workers with service records of up to 20 years. However, the trade unions are campaigning for a higher severance deal.

Potential investors being sought

Meanwhile, efforts by potential investors to assess the possibilities for a viable operation to replace SR Technics are continuing. Up to 30 expressions of interest in the business have been made, with trade union representatives declaring that the workers themselves could invest a portion of their severance money. The total redundancy commitment by SR Technics comes to €48 million.

SR Technics insists that it will consider all expressions of interest, regardless of whether this could result in more competition. Management stated:

The company will facilitate the continued operation of the business in Ireland if a financially viable offer is made, and a decision in this respect will be taken irrespective of any potential impact on SR Technics’ other locations, including those in Zurich.

Threat of industrial unrest

One trade union official, Willie Quigley of the SR Technics Union Forum, warned of the potential for what he described as ‘great turbulence’ if workers do not secure a satisfactory deal. It is believed that warnings like this and similar comments have caused some alarm to potential investors. The weekly magazine, Industrial Relations News (IRN), reported that new investors ‘simply want a workforce that uses its skills, and shows the flexibility required in today’s marketplace … there would need to be an entirely new agreement on wages, conditions and work practices in any such operation’.

The main trade unions, which include the Services, Industrial, Professional and Technical Union (SIPTU), the Technical, Electrical and Engineering Union (TEEU) and Unite, acknowledge that wages and employment conditions will have to change in any new operation. SR Technics has highlighted that wage costs are at least 20% out of line with those of competitors, and the trade unions agree that any new industrial relations agreement will have to address this problem.

In early 2008, the company also lost a maintenance deal with Gulf Air and three out of four contracts with the local airline, Aer Lingus.

Reputation for industrial militancy

The forerunner of SR Technics was TEAM Aer Lingus, a state-owned company that evolved out of the aircraft maintenance division of the then fully state-owned airline, Aer Lingus, in the late 1980s. The establishment of TEAM was promoted by the then minority Fianna Fáil government under the Prime Minister (Taoiseach), Charles Haughey, to help tackle the national unemployment rate, which reached as high as 18% in that decade. While TEAM – and later SR Technics – established a good reputation within the industry for the standard of its work, it never managed to shed a reputation for industrial militancy.

Brian Sheehan, IRN Publishing