FLS Industries is to sell its Irish aircraft maintenance plant as part of a 47 million deal, but the move may not guarantee the future of all the troubled facility's 1,500 jobs.
The Danish-based group revealed yesterday that it has agreed the sale of FLS Aerospace to its Swiss competitor, SR Technics, for €47 million. It had been seeking to sell its aircraft maintenance arm for some time, and SR was considered the most likely purchaser.
SR is partly owned by UK venture capital group 3i. It turned over €700 million in 2002 and employs 2,800 people. The deal will be completed within three months.
As part of the agreement, SR has agreed to cover FLS's pension liabilties, which were estimated at €82 million at the end of 2002, and the estimated €134,000 cost of restructuring the business.
FLS Aerospace is largely made up of a number of UK facilities and the former TEAM Aer Lingus base at Dublin Airport. The Irish operation employs 1,500 people.
However, a spokeswoman said the company could not rule out future job losses. It is currently in talks with the unions regarding restructuring plans for the business. It has already cut the number of temporary workers that it regularly hires during busy periods from 130 to about 50.
A SIPTU spokesman said yesterday that while management had not formally told the plant's seven unions that it would be seeking redundancies, it had told them that it would have to look at possible means of making savings. He added that the union looked forward to dealing with SR Technics.
Both the company and management are due before the Labour Relations Commission (LRC) this week over the company's refusal to pay a number of wage increases due under the national pay deal, Sustaining Progress.
FLS says it cannot afford to pay the increases. They would have cost it an extra €1.1 million last year, and would add €3.2 million to its 2004 payroll costs.
The Labour Court recently shot down a craft workers' claim for a 30 per cent payrise. The claim dates back to 2001. The unions postponed pursuing it following the World Trade Centre attacks in September of that year.
The Irish base recently escaped a group-wide round of job cuts that reduced numbers by a total of 420 at its Stansted and Manchester facilities in the UK. The group decided to switch its heavy maintenance from these plants to Dublin.
The slump in the airline business that resulted from the Trade Centre attacks has hit the Irish operation hard. Its returns to the Companies' Registration Office show that it lost €1.3 million in 2002. The company has agreements with Aer Lingus, EasyJet and Ryanair, but despite this has struggled to remain profitable.
