Eircom gravy train going off the rails

EIRCOM’S UNIMPRESSIVE financial results last week prompted Communications Workers’ Union (CWU) leader Steve Fitzpatrick to issue a call to arms to its 5,000 or so members at the firm.

“The burden of remunerating a debt in excess of €4 billion, the increasing loss of customers through unfair competition and regulation, the loss of customers due to mobile substitution and the worldwide economic collapse have all come together to create what I believe should now be seen as a national disaster,” Fitzpatrick told members.

“The creation of Eircom’s massive debt through the constant buying and selling of the company is a direct result of the failed policies of neo-liberal politics where competition is king, even in circumstances where competition increases prices, undermines investment and damages natural infrastructural development.”

He continued: “We are also convinced that the policies of the present management , particularly in relation to pursuing the structural separation of the company, have further added to those considerable problems.”

Fitzpatrick described Rex Comb’s departure as chief executive and his replacement on an interim basis by Cathal Magee as “a serious cause of concern”.

He vowed to do all in his power to ensure the financial crisis had a “minimal impact” on Eircom jobs.

“In the coming weeks/months it will be necessary for us to increase the pressure politically in order to ensure the future viability of Eircom and I believe it will be necessary for you as individuals to play a part in that campaign,” Fitzpatrick said in closing his letter, no doubt with an eye on the June local elections.

Stirring stuff and there’s no doubt it will have played well with Eircom workers. Curiously, though, there was no mention of how current and former workers at Eircom have earned more than €600 million in tax-free cash since privatisation a decade ago.

This was the result of a sweetheart share deal agreed with the government in advance of the initial public offering. Indeed, people who left the firm years ago are still receiving money and there’s more cash to come.

The workers’ employee share ownership trust (Esot) owns 35 per cent of Babcock Brown Capital, the listed group that controls Eircom. The Esot has been a key participant in the “constant buying and selling” that the CWU believes has weakened the telecoms group.

The Eircom gravy train appears to have run out of track, and the taxpayer shouldn’t be expected to keep it on the rails.