Wednesday 7 December 2016

'Bus strike will cost €21m and leave us in catastrophic financial position,' warns chief executive

Bus Eireann have warned staff not to expect pay rises this year

Anne-Marie Walsh Industry Correspondent

Published 21/09/2016 | 11:03

(Stock picture)
(Stock picture)

THE Chief Executive of Dublin Bus has warned staff that strike action will cost the company €21m and leave it in a “catastrophic” financial position.

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In a letter sent to the workforce of over 3,400 this morning, Ray Coyne said industrial action is “undermining all our past efforts” in cutting costs, and has the potential to return the company to a post-2010 financial crisis.

He said he has reviewed the “significant” impact of the ongoing industrial action and 13 proposed dates on customers and the company.

The news comes as Bus Eireann have warned staff not to expect payrises this year as the company's finances are in a "critical position".

Mr Coyne says to date, the stoppages have cost Dublin Bus over €4m.

A two day stoppage due to begin on Friday will cost an extra €2m, and leave the company in a loss-making position by the end of the year.

In addition, 13 days of planned stoppages will cost the company another €15m.

“This will have a catastrophic impact on our financial position,” he said.

He said the cost of funding a 15pc pay rise being sought by unions will be €50m to the end of 2018.

Mr Coyne said this additional cost will be on a company “that has only recently returned to a sound financial footing is simply not affordable”.

“Unlike the impact of the economic crisis which was outside our control, resolution to the current situation is within our control at this point,” he said.

He also predicted further cuts if the company finds itself in a financial crisis again.

Mr Coyne said this would “naturally require actions to restore the company to a sound financial standing”.

“Returning to such a scenario is totally unnecessary and is at this point wholly avoidable,” he said.

“It is in everyone’s interest to resolve this dispute as quickly as possible. I am on record as stating that the Workplace Relations Commission is the correct forum for further engagement.”

He said these talks are provided for in a Labour Court Recommendation that has been rejected by staff for an 8.25pc pay rise over three years.

“I urge all grades to engage in that process and avoid any further disruption of services,” he said.

The strike dates at Dublin Bus:

  • Friday and Saturday this week (September 23 and 24)
  • Next Tuesday and Wednesday (September 27 and 28)
  • Saturday October 1 (day of the All-Ireland replay)
  • Wednesday October 5
  • Friday October 7
  • Monday October 10
  • Wednesday October 12
  • Friday October 14
  • Tuesday and Wednesday October 18 and 19
  • Monday October 24
  • Wednesday October 26
  • Saturday October 29

Meanwhile, Bus Eireann’s Chief Executive has warned staff that no pay rises “can be contemplated” as the company’s finances are in a “critical position” with losses of €6m expected this year.

In a letter sent to staff today, Martin Nolan says that new terms and conditions will be implemented for staff in Expressway, and routes will be sub-contracted.

He warns that the company is in a “very serious and difficult situation and has drawn up a survival plan that is the "only course" open to it.

The CEO said management are due to meet unions at the Workplace Relations Commission this morning to discuss a claim for a pay rise lodged on behalf of staff.

But he said the trading position of the company dictates that no payroll increases can be contemplated at this time.

“The company finances are in a critical position with losses of €5.6m in 2015 and projected losses of €6m in 2016,” he said. “A minimum turnaround of €7m is required.”

He said the board and management of Bus Éireann are faced with very difficult decisions and have drawn up a plan to address the severe financial difficulties.

“Whilst both the schools and public service obligation businesses are performing satisfactorily, the Expressway business – despite extensive promotion and development – is continuing to lose money,” he said.

He said there were a number of factors contributing to this including increased competition from low cost operators and increased costs including claims and staffing costs. He said the motorway network is “facilitating new business models” for competitors.

Mr Nolan noted that a pay cut in 2014, which led to a return to profitability, had been reversed last year.

He said the structural changes required would involve separating Expressway from the rest of the business and implementing new terms and conditions for staff.

In addition, a  a number of routes will be sub-contracted although all routes that are currently operated will continue to do so.

He said a new management and support structure will be implemented for the Expressway business.

“Other efficiency measures may be required across the entire business,” he said. “Regulatory issues and market conditions would indicate that the company will need to restructure as it moves into the future.”

He said staff will be consulted on these measures with a view to gaining agreement.

“In light of the above it should be clear that the overall trading position of the company dictates that no payroll increases can be contemplated at this time,” he said..

“I would urge staff representatives to engage meaningfully with the company to agree an implementation plan for the Expressway business and seek to return the company to stability so that the reasonable expectations of staff can be met in the future.

“The commercial plan is designed to ensure Bus Éireann’s future stability under a sustainable financial model and give protection to services for customers as well as providing longer term sustainable employment for staff. The Board and Management of Bus Éireann believe that this action, although very difficult, is the only course open for the company.”

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