Bus Eireann 'will be out of business by the end of the year without survival plan'
The Acting Chief Executive of Bus Eireann has said the company could go out of business by the end of this year, with the loss of 2,600 jobs.
Ray Hernan indicated that the financial crisis is worse than previously thought as he had said it could become insolvent within 18 months. Mr Hernan was speaking at a Dail Transport Committee meeting this morning.
He urged unions to come to the table urgently and warned he could not implement a survival plan without their assistance.
He said a final cost cutting plan will be put to the company's board by the end of March although the company wants to implement some cuts and efficiencies immediately.
Mr Hernan said losses amounted to €8m to €9m last year and said without drastic cuts it "will be insolvent before the end of this calendar year".
Mr Hernan said his recent letter to staff outlining cuts, including axing shift payments, reductions in allowances and creating a pool of casual drivers, was not a precondition of talks with unions.
"I am ready to meet the unions day or night," he said. "We need to implement these changes. Otherwise this company will not exist this time next year."
Mr Hernan disputed unions' claim that the cuts oulined for staff would amount to a reduction of up to 30pc in earnings although he did not elaborate on what they would amount to.
He refused to say what severance packages were paid to former CEO Martin Nolan or former HR Manager Joe Kenny who left the company recently. He said he could not give his own salary because it has not been agreed although he said pay for the CEO stood at around €180,000 or €190,000 last year.
When asked by AAA deputy Mick Barry if a new HR consultant was earning €2,000 a day, Mr Hernan would not say but revealed that a derogation was obtained to normal procurement procedure for the contract.
He revealed that insurance costs have spiralled from €1.5m in 2014 to close to €7m last year.
He also said that absenteeism at Bus Eireann is double the national average.
He said he had only met the shareholder Minister for Transport Shane Ross once but said he "understands the predicament" facing Bus Eireann.
Unions have refused to enter talks on the cuts outlined by Mr Hernan and are due to meet tomorrow to discuss their next move. The Nbru has threatened an all out strike if cuts are imposed on staff.
Transport Minister Shane Ross was under pressure earlier today to intervene in the dispute, amid claims he is "now a spectator".
Labour Party leader Brendan Howlin told the Dáil that Mr Ross is overseeing a situation that is set to "undermine a vital national company”.
To date Bus Eireann’s problems have focused on the Expressway service which must compete with private companies without the aid of State subvention.
However Fianna Fáil leader Micheál Martin suggested the public might be getting the full story about restructuring plans at the bus company.
He said the threat to the Expressway service has “caused deep concern among the workforce and the travelling public”.
However, Mr Martin went on to claim that there has been a “ratcheting up” of language by management.
“It seems to me that there’s something afoot,” he said, adding the Transport Minister Shane Ross is trying to keep his fingerprints off the situation.
“A bit more transparency from all would be welcome,” he said.
Mr Howlin said: “Management have been engaged in a public relations doomsday exercise.” Taoiseach Enda Kenny replied that there is “nothing underfoot” going on but people needed to be aware of the “commercial reality”.
“It’s a matter that is essentially under discussion between management and trade unions,” he said. “Government policy in this is are is that the travelling public should have access to the best quality of transport services,” Mr Kenny said.
He defended Minister Ross’s record on the issue, saying that the minister does not underestimate the problems.
But the Taoiseach added: “This is a commercial problem now and it deserves a commercial response. That means a resolution has to be found between the company and the trade unions.”