Business Opinion: Irish Continental Group finds itself at the centre of a storm. The company's attempt to radically restructure the cost base on its Irish Sea route has been caught up in a much bigger fight, between David Begg of Ictu and Turlough O'Sullivan of Ibec.

All of a sudden ICG finds itself being mentioned in the same breath as Gama, the Turkish construction firm that has become a byword for exploiting workers. ICG's somewhat heavy-handed ultimatum to its Irish Sea workers - take redundancy or a cut in pay and conditions - has left it open to accusations of social dumping. The dispute is now in the hands of the National Implementation Body, which is to social partnership what the Inquisition was to the Renaissance church.

Where things go from here is not clear, but one thing is for sure - they will not move particularly quickly and thus it follows ICG's cost base is not going to come down any time soon.

It is all a bit of a mess and rather begs the question as to whether it was avoidable. ICG would appear to think not. If its statement of last Monday is to be taken at face value then the company had no choice but pick the fight that escalated so spectacularly last week.

According to Eamonn Rothwell, the company's chief executive, failing to address costs on the Irish Sea routes will plunge the company into losses by the end of the 2007 season.

He also warned ominously that Irish Ferries could go the way of B&I Line which collapsed spectacularly in 1990 to be bought by ICG.

The trouble is that Mr Rothwell's apocalyptic vision doesn't really chime with the view in the market.

As recently as September 8th Davy put out an upbeat research note on the company, not withstanding the issue of crewing on the Irish Sea which was already well flagged.

It acknowledged that the traditional passenger and car ferry business was no longer going to provide any growth for the business, due primarily to competition from low-cost airlines. But it argued there was basically a very strong freight business in Irish Continental Group that will continue to capitalise on Ireland's economic growth.

Davy also focused in on cash flow which it believes is one of the company's most attractive features and underpins the share price. It is worth noting that ICG's shares hardly budged last week despite the somewhat alarmist note struck by Rothwell.

Davy's bullish view is founded in a much more detailed analysis of the sector carried out during the summer.

It set out a number of strategic options for the company which range from just trundling along and using cashflow to pay down debt to much more exotic moves, such as a management buyout. This option is Davy's favourite.

It sees the group - which is already 8.7 per cent owned by Mr Rothwell - as a management buyout waiting to happen, with the only thing holding the management back being the thought of ceding control to private equity backers.

Other options include buying more ships or a regional ferry company. It even contemplates IFG buying out P&O Ferries.

All of the options are predicated on the company's exceptionally strong cashflow and none can be readily reconciled with the picture painted by Mr Rothwell this week of a business on the edge of a precipice.

As of last week it is hard to guess which of these possible courses will pan out - if any are being plotted by ICG - as none of them call for embroiling the company in a national debate about social dumping and calling down the wrath of the social partners.

It rather looks as though what started out as an attempt to force through changes in work practices has gone badly wrong.

The unions' contention that the company is stage managing a crisis to facilitate the changes is lent further credibility by the claim last Thursday that negotiations on finding cheaper contract crews had already got under way.

If it is the case that ICG management were over-egging the crisis pudding to facilitate the introduction of cheaper crews, then the plan has blown up in their faces in a most spectacular fashion.

They now have a real copper-bottomed, ocean-going crisis on their hands and sorting out the mess will prove costly.