GENERAL Motors is understood to have helped fund the final redundancy package for 800 workers at Packard Electric's plant in Tallaght, Co Dublin. On Monday the workforce at Packard is to meet in Tallaght to hear the final terms on offer.
The workers are expected to vote for acceptance of the deal, which is being recommended by their union representatives. If that is the case, then the way will be cleared for the Industrial Development Authority to begin finding new investors for the plant, the largest employer in Tallaght for more than 20 years.
There had been a serious risk of the dispute escalating, with shop stewards threatening to take militant action targeting Opel cars, the Packard plant and US companies generally if a resolution had not been found at the Labour Relations Commission yesterday. The talks this week were brokered in part by the Minister of State for Commerce, Science and Technology, Mr Pat Rabbitte, who was in direct contact with Packard and its parent company, General Motors, in the US. GM also owns Opel.
When talks adjourned at the LRC over a week ago, there was a £2 million gap between what the company was prepared to offer and the redundancy terms recommended by the Labour Court, which the unions had accepted. The company's decision not to accept the Labour Court recommendation was greeted with surprise as it added fairly modest improvements to the company's original offer. This week, Packard increased that offer by $250,000 and said it would release excess funds in the company pension fund worth another £1.5 million to help bridge the gap.
In yesterday's final settlement the cash offer was increased to $750,000, or £469,000, to bring the total value of the improved offer to £1.968 million. This will mean an extra £2,500 in redundancy pay, on average, for Packard workers.
The dollars subvention to the package is understood to have come from the US.
The two unions, SIPTU and the ATGWU, had resisted using the £1.5 million excess in the pension fund for redundancy purposes. They would much rather have seen it retained to enhance the retirement provisions for the workers, many of whom will not work again.
However it transpired that the terms of the pension fund gave the company wide discretion on how the excess £1.5 million could be used and there was a possibility that employees would receive no benefits at all. In this situation the unions accepted the Packard offer to use it to improve the existing redundancy offer.