CIE viability talks stretch towards summer

Talks on viability plans to return CIE to profitability will not be concluded until at least the summer, informed sources have said. It is also expected that some elements of the talks, which have been ongoing for 18 months, will end up in the Labour Court.

Central to negotiations are proposals for multi-million-pound cost savings within the CIE group of companies.

"Most elements should be broadly agreed by March or April," says one source, but some issues will undoubtedly be referred to the Labour Court. Concluding agreements - it is understood that around 800 separate points have been under discussion - is vital if the annual £100 million-plus Government subventions to the State-owned transport group are to be reduced.

The talks, which have been tortuously slow, are said to have picked up momentum recently. Some have attributed this to the involvement of management consultant Mr John Behan.

He was appointed last September, following the intervention of the Minister for Public Enterprise, Mrs O'Rourke, over a threatened strike at Bus Eireann. Talks had broken down over the introduction of one-person operated buses in Limerick and Waterford.

"It was felt that management couldn't negotiate the position," says one source, "and they were probably right."

Mr Behan has a track record of involvement in restructuring semi-state companies. He worked with TEAM and is currently involved with Aer Lingus, which is seeking a strategic alliance partner.

"A lot of the confrontational elements of the talks have now been removed," says one union source. "Whether that is as a result of the new Government or the appointment of Behan is difficult to say."

However, the process has had its share of stops and starts. Recently SIPTU pulled out of negotiations in Iarnroid Eireann, the rail subsidiary, accusing management of failing to honour existing commitments.

SIPTU representative Mr Tony Tobin, asks how management can be trusted in talks on restructuring the company when, he claims, it will not honour current agreements.

The viability plans - which were drawn up two years ago are crucial to getting CIE's finances back on track. They involve substantial cost savings in the three subsidiaries - Dublin Bus (£8 million), Irish Rail (£30 million) and Bus Eireann (£6 million).

Just how those savings can be achieved is at the heart of the talks. Some sources estimated this week that only around 20 per cent of the savings have been agreed.

It is believed that consensus has been reached on issues such as new technology, communications systems and ticketing machines.

The use of minibuses have been introduced on a trial basis in Waterford and their introduction in Galway and Limerick has been agreed in principle. However, it is understood that the unions are pushing for similar wage rates to apply to provincial bus drivers as exist in Dublin. The company is currently refusing to accept this, according to sources.

One source said the advent of the buses in Waterford had resulted in savings of £300,000, although the service is still losing £100,000 a year. Another said it had increased productivity by 50 per cent.

Put simply, the company's position is that it wants to secure changes which will achieve the cost reductions necessary to make CIE viable. The trade unions are prepared to discuss changes in productivity, but their members earnings' must be protected.

"There is a fair amount of flexibility on the union side," says one union source, "and a number of issues have been resolved. However, many more are still outstanding."

It is understood that the unions have submitted their own proposals on how to achieve cost savings in various areas. These are currently being evaluated.

One management source says many of CIE's drivers have guaranteed overtime. The source concedes that if they lose this, then their earnings will be reduced. Union representatives argue that in many cases their members' basic wages are very low and they rely on overtime to supplement them.

"You cannot tell a guy who has entered into financial commitments that his wages are now going to be cut," says one union official.

Management concedes that some drivers will lose earnings under their current plans.

However, some sources say the company has moved away from the premise that savings can be achieved through reducing wages or abolishing overtime. The key, say both management and union representatives, is to reorganise the work to boost productivity.

Issues under discussion in Bus Eireann include redundancies, recruiting staff, bringing in further minibus services, sub-contracting school bus services and changing premium payments.

Bus Eireann's intercity bus services are perhaps most vulnerable to competition. Many private operators have targeted these services very successfully over the past few years, offering lower fares and more tailored services. This competition impacts on both the intercity and rail services run by CIE.

"There are all sorts of restrictive practices in Bus Eireann," says a management source. "Drivers drive about 70 per cent of the time, and the aim is to get this up to about 85 per cent-90 per cent."

The source says, for example, that a bus driver who drives from a provincial town to Dublin cannot then do another run around the city. If a driver is in for the day, then he should work for the day, says another source.

Agreement has been reached in principle that drivers will move from a six-day week to a five-day week and also that drivers will drive "straight through". Currently, on some long journeys drivers do not drive from a provincial city to Dublin. Instead they swop over at a certain point.

One sticking point on this issue is said to be that if a driver takes a vehicle from Cork to Dublin and back, then every alternate day he should be rostered to drive locally.

In Irish Rail, the company wants the salary grades merged and is also seeking some redundancies. Various grades apply to ticket checkers, conductors, barrier officials, station masters etc.

"Wages in CIE were driven by overtime for many years," says one union official. "Perhaps the basic wage was ignored. However, we should have a rate of pay which reflects the basic industrial wage."

The official also believes that an element of overtime is good for morale in CIE.

Indeed there is broad consensus that when all the talking is done, and the issues are agreed, the key to whether employees will accept the changes will rest on one factor - money.