1,500 jobs may be lost as An Post faces 50m losses

Chief Business Correspondent

Losses of up to 50 million are projected by the group for 2003 following a detailed review of the current year’s trading outlook by recently-appointed chief executive Donal Curtin.

The projected loss under the old management of 15.4 million was unrealistic and failed to take account of several factors, including the cost of benchmarking and ongoing commitments under the last national pay deal.

The company had also over-projected the level of income it would make this year by a huge amount and failed to take into account the sharp downturn in the economy.

Trading losses of 35m are projected next year, which the company hopes to be its last year of serious losses.

An Post has set itself a target of breaking even in 2005 and to do that, it plans to let go 1,500 workers. However, more jobs losses may also follow among the 10,000 workforce.

Communications Minister Dermot Ahern has ordered the group to produce a detailed recovery plan to cover the short, medium and long-term outlook for An Post.

He has given the group just one month to come up with the survival strategy which he will present to the rest of the Cabinet once he has received the blueprint.

Yesterday, Fine Gael communications spokesman Simon Coveney called on the chairman of the Oireachtas Communications Committee, Noel O’Flynn, to summon An Post’s senior executives to explain “how the company has found itself in such a dire financial position.”

The company has to explain how it could go from a position of nearly breaking even to a 50m loss.

Labour’s Tommy Broughan said the threat to 1,500 jobs represented almost 25% of the total workforce. He accused Mr Ahern of failing to act given the Oireachtas Committee was warned of unprecedented losses within the group for 2003.

“There has been a litany of cock-ups at An Post in recent times including late deliveries and a huge backlog of post last Christmas,” he said. It has also been alleged that An Post has been subsidising foreign postal operations such as Royal Mail and Deutsche Post to the tune of 11m.

Communications Workers Union chief Con Scanlon said it was a scandal that it delivered post from Germany and Britain at significantly lower prices than we pay for corresponding deliveries. Link-ups with the Royal Mail might make sense in the case of parcel delivery services, but he said the issues at An Post run deeper than productivity and staffing levels.

“Over the past 12 years, An Post had to survive without an increase in their charges and the present minister and his predecessors have to accept a huge portion of the blame for the current crisis,” said Mr Scanlon, who said the 6,000 postmen would not be “scapegoated” in the rush to pull the group out of its crisis.

“Workers have made huge concessions to the company over the past three years, but it has seen no move from the company on new pay structures.”