Richard Curran: Delusion on an industrial scale
EVERY now and again, an industrial dispute comes along that makes you take a deep breath and wonder if some people are living in the real world. But wait around for long enough, and just like the proverbial Dublin bus, three come along together at once.
Industrial relations strife at three State organisations, all in one week, tells a tale of delusion and featherbedding.
Dublin Bus drivers got a special new group to examine how the latest Labour Court recommendation, following their August bank holiday weekend strike, will be progressed.
Bear in mind, that the cost-cutting measures sought by the company before the strike had Labour Court backing, but that wasn't good enough for the union representing drivers who firmly believe they are very hard-pressed.
EBS, the nationalised former mutual building society that cost us around €875m by lending to property developers, is now owned by AIB, which in turn cost around €16bn. The Unite trade union representing EBS staff has served strike notice on foot of the company's refusal to pay an outstanding 13th-month bonus payment for 2011.
The Central Bank of Ireland, those workaholic guardians of financial stability, is in dispute with staff over a plan to increase their working week to 37 hours. At the moment around 500 of them, or 40pc of staff, work between 32 and 35 hours per week.
Each of the three disputes has its own distinct nuances, but put together, it looks more like Alice In Wonderland than the Grapes of Wrath story in which we are all supposed to be living in Ireland right now. This is a country that had to be bailed out, is broke, and apparently suffering from austerity fatigue!
Let's take Dublin Bus.
In 2007, it had 147.5 million passenger journeys. Last year this was down a massive 32.3 million to 115.2 million. During that period, management cut costs and reduced head count. But the company still lost €9.1m, after receiving its ordinary State subvention of €69m. Its parent company had to get approval for a special emergency subvention of another €30m, with around €5m of that going to Dublin Bus last year.
This is a company with a lot of problems. Its owner, the Irish State, is in trouble. Yet average pay, including salary and pension contributions, in Dublin Bus in 2008 was €48,900. It went up to €49,000 in 2009. It hit €49,600 in 2011 and dropped slightly to €49,400 last year.
The Central Bank of Ireland did a pretty terrible job between 2003 and 2008 when the banking system collapsed. It now employs 400 more people than it did in 2007.
Some private sector workers have experienced three pay cuts, while public sector staff like teachers, gardai and civil servants, have all been hit with pay cuts of between 5 per cent and 10 per cent in those extraordinary years between 2007 and 2012.
Average pay for the Central Bank's 991 staff in 2007 was €77,280. Average pay last year for its 1,394 staff was €76,200. That is fall of just 1.4 per cent. Pay cuts of 10 per cent were introduced two months ago for staff on over €65,000 per year. But it seems a 37-hour week along with it is just going "too far".
EBS lost its way in the boom, fell in love with property developers and cost us all around €875m.
Management are to blame for this, not staff. But everybody picks up the tab.
Without the bailout, it would have gone bust. So would AIB, its new parent. Average EBS pay (salary and employer pension contributions) in 2011 was €62,300, down 13 per cent from since 2007. But the final 13th-month payment for 2011 was due after the company had lost €619m in just two years.
At least the EBS staff have a Labour Court recommendation in their favour, namely that the outstanding 13th-month payment should be made for 2011.
Without taxpayer bailouts, two of these three organisations would be out of business. The Central Bank is different. It seems to be a cosseted place where people are in dispute to keep working fewer than 35 hours per week while economic carnage is going on around them.
Love it or hate it, but Twitter is coming to the stock market – with a valuation of $10bn to $15bn. Chief executive Dick Costolo will try to avoid a Facebook-style IPO, which was over-hyped and over-priced. Twitter has 200 million users and handles 400 million tweets per day. The content is a mixture of the inane, the nasty, the gossipy, the interesting, the corporate and the half-disguised advert. Twitter seems to have elevated the snippet to biblical status. Fans overstate its role by even calling it "a first draft of history".
But will it make money? It generates revenue by inserting paid, targeted ads that resemble ordinary, user-generated content.
Revenues are believed to be around $582m this year and a targeted $1bn next year. How far can this revenue model stretch? Users could tire of a corporate presence if the content becomes too prevalent. If it has to opt for straight ads in the future, it could put a lot of people off.
Costolo objects to what he calls short-term thinking about revenues. That sounds like he prefers slightly vaguer "blue skying" to rigorous analysis of current and projected revenues.
Twitter may be a brand in search of a business, but the brand is so big, the IPO will probably fly anyway. It will be more interesting to see where the business is in three years' time.
Wouldn't it be nice to see the files the Irish Revenue Commissioners sends to Brussels for the EU's tax avoidance investigation, which includes us, the Netherlands and Luxembourg.
Are there any sweetheart deals? That depends. International tax is so complex it isn't a black-and-white issue. A particular interpretation by the tax authority of a specific complicated structure can be worth billions.
They won't find a letter that says ABC Inc only has to pay 2 per cent tax. But they might find several indications as to the view the Revenue Commissioners might take in the event that a stream of transactions or structures were put together in a certain way. They would all be perfectly legal, by the way.
And Ireland won't be the only one doing it either.