Union cautions against private equity buy-outs

One of the country’s largest trade unions will today urge a crackdown on the buy-out of companies by private equity investors.

Mandate insists the growing number of such investment takeovers is posing a huge threat to job security and conditions.

Union general secretary John Douglas will urge the strengthening of laws governing the often short-term ventures at the Irish Congress of Trade Unions conference in Bundoran, Co Donegal.

“The primary aim of such funds is to maximise profits in the shortest period of time,” he said.

“This often means the selling-off of valuable property assets, slashing workforce numbers, withdrawal of terms and conditions of employment, reduction of job security and the loading of the target company with enormous debt to finance the purchase.”

Mr Douglas said thousands of job losses followed the recent buy-outs of major companies like Automobile Association and Birds Eye.

“Private equity buy-outs by their nature represent a huge threat to employment conditions and in our opinion to the long-term interests of companies in general,” he said.

“The very high rates of return required to finance the debt-driven private equity buy-outs can jeopardise the target company’s long-term interests and the provision of decent employment conditions and standards.

“The sheer magnitude of these funds is such that no company is safe, no matter how well managed or how large it is.”