Possible FLS acquisition in US could jeopardise TEAM project

The chairman of FLS Aerospace, the Danish company bidding to purchase TEAM Aer Lingus, has warned that a possible acquisition of a US aircraft maintenance company could result in the Irish project falling through.

Mr Steffen Harpoth, who met the Minister for Public Enterprise, Ms O'Rourke and the Aer Lingus chairman, Mr Bernie Cahill, yesterday, told The Irish Times that a decision to acquire Timco, a North Carolina company, would cost "millions of pounds".

"Perhaps what will happen is that I and my associates will say the cup is full" in the event that the US acquisition was made, he said.

He added that he wanted the bid for TEAM to be a "friendly acquisition" and if employees were receiving payments which were the equivalent of a year's salary tax free and still did not want to work for FLS, "then we should not do the deal". "We are not doing this for anyone's blue eyes; we are doing it for making money," he said.

He added that the FLS group already had investments worth £35 million sterling in Britain, employing 1,300 people in aircraft maintenance in Stansted, Gatwick and Manchester.

He said that he was not surprised by the attitude of TEAM employees but there had been a change of tradition in Ireland and Europe from State-owned companies to private ones.

He said that much of the discussion with Ms O'Rourke had related to legal issues, the letters of comfort and the pensions issue. "I look forward to discussing promoting the business, how to make it better," he said. In the Dail earlier, Ms O'Rourke said that she had nothing to offer if the FLS deal did not go through and that there was no job for life in the letters of guarantee held by the unions.

She wished the union leadership "would stop telling its members that there will be a way out of this and that they will keep their jobs". Afterwards, at a media briefing, she said that she was asking the workers "to look into their hearts" and to consider their families, wives or partners when considering "the chance of a sure job".

She said she would also be receiving "Plan B" from Aer Lingus management, outlining a strategy for an orderly winding down of TEAM, but she wanted to concentrate on the FLS offer.

Mr Harpoth said the business had to be a good one to be acquired and it had to have a favourable work environment. There would be scope for investment. FLS Aerospace, the 10-year-old subsidiary of the group, had made investments worth £16 million in England last year.

"Aer Lingus has not added any investments . . . I believe that there will be millions of pounds to increase efficiency and, I feel, be more competitive," he said. The aim would be to make work practices more efficient and decrease turn times - the length of time aircraft remain in hangars for maintenance.

But he could not give guarantees of having no redundancies if people were not working "in the spirit of building a good company". He said that the company had guarded itself against downturns in the industry by establishing long-term contracts with customers. The average contract with a client was three-and-a-half years and 70 per cent of the business was tied up in long-term contracts. Four years ago, only 30 per cent of the business had been in long-term contracts, he said.

He said aircraft maintenance would exist for the next 100 years and longer but a maintenance company needed the stamina, the ability and the capital to exist.

The FLS group, with core activities in engineering, building materials, packaging and aerospace, had a turnover of $3.5 billion (£2.5 billion) last year and had after-tax profits of about $100 million, Mr Harpoth added.