DAVID Begg is fighting the toughest battle of his life. In negotiations now underway he is bidding for a lucrative slice of the State telephone operator.
As general secretary of the Communications Workers Union (CWU), Mr Begg wants 15 per cent of Telecom for his members. The Government, through Telecom, is prepared to offer 5 per cent, but is open to offering more.
But there is more than just the size of the stake to be decided. For with the final deal will come massive changes in work practices and restructuring at Telecom, which is facing ferocious international competition.
If Mr Begg can pull it off it will be, as he has confided to associates, "the most far reaching and difficult agreement" he has ever been involved in. It will mean that a major company has been restructured using the negotiated approach advocated in Partnership 2000.
No stranger to difficult talks, Mr Begg previously took part in protracted and often bitter negotiations in the restructuring of An Post. Although employees agreed to the restructuring, the plan at one stage was to make 1,850 people redundant. But this did not happen. The battle was seen as a victory for Mr Begg.
The current talks involve issues Mr Begg holds dear to his heart. He is known as a great believer in the concept of the "stakeholder society", in which companies consider stakeholders such as their employees rather than purely pursuing profit. Almost a year ago, in an address to the Institute of Personnel and Development's annual conference, he slated what he called the drive to downsize companies. The stakeholder concept was the key to transforming corporations, and the means by which the personnel function could become important again.
Mr Begg will be back in talks in Dublin today, hoping to have a watertight agreement in place in time to present to his members at the CWU's annual conference, which starts next Wednesday in Tralee.
The talks, which have progressed at an agonizingly slow pace at times, have made substantial progress in several areas. But the CWU stance is that nothing is agreed until everything is agreed.
In other words, the restructuring deal and the deal to win a greater share of Telecom are inextricably intertwined. The whole deal could collapse if the shareholder element is not concluded.
Some sources say that the Government, through Telecom, has been holding back on talking turkey on the employee stake until the other parts of the deal are slotted into place.
As competition increases globally, Telecom has to prepare for it. It must cut its own costs, curb its debt and undertake continuous substantial investment, in a market place of increasing competition and falling prices.
The strategic alliance with DutchSwedish partners KPN/Telia is one part of Telecom's preparation to compete; restructuring the company is the other.
Telecom wants to cut £110 million off the payroll costs over the next five years as part of its drive to reduce its massive debt, currently around £600 million.
Mr Begg has argued that the major restructuring was carried out in 1991. What is at issue now is not simply work practices but how the company and staff can cope in an ever changing environment. It will necessitate retraining and reskilling. At present 11,300 people are employed at Telecom and the number will reduce by several thousand in the years ahead. Almost 2,000 people have left in the past two years.
The Government's position is that it is open to "practical and feasible" proposals by the staff to purchase the extra shares at their full market value, when it is satisfied that "this will assist the future development of the company and that the conditions relating to the initial 5 per cent are satisfactory".
Management sources close to the talks maintain that the CWU has not made clear how it is going to pay for the stake and that it has no hope of getting 15 per cent.
They also say that the CWU is tying in some concessions which would pertain to the 5 per cent stake and restructuring plan, rather than anything above that.
The demands from Telecom are exacting, incorporating staff reductions, increasing the use of contract workers, foregoing pay increases, reducing allowances, increasing work time flexibility and partfunding their pension schemes.
An important caveat is that the other shareholders (KPN and Telia) have to approve the deal. As the State wants to remain the majority shareholder, giving the employees 15 per cent (or 14.99 per cent to be exact) would rule out a public share offering unless the current shareholders dilute their own shareholding, something which they may not want to do.
Sources on both sides of the talks say it is unclear what KPN/Telia's position is and what would happen if they objected to a deal which involved ceding substantially more than 5 per cent.
"I think the Government would find it very difficult to sell, if the strategic partners objected," says one source.
However, another said the Government is the major shareholder and it is in its gift to cede the stake above 5 per cent.
There are also understood to be differences on how exactly the stake should be valued. A figure of around £89 million for the remaining to per cent has been mentioned.
Telecom argues that the strategic alliance partners are bringing added skills to the deal and it is not simply a question of applying the same complex valuation methods to value the stake as were used in the KPN/Telia deal.
The employees have argued that by agreeing to restructuring and retraining, their own input also plays a significant role in transforming and increasing the company's value. They also say they are prepared to pay the market value for the stake.
It is against this difficult backdrop that Mr Begg must try to conclude a deal. Both detractors and admirers are agreed on one thing: he is a formidable adversary across the negotiating table.
"He is very intelligent, very sharp, and always very well briefed," says one source. "He is a guy who can intellectualise and deal with all the complexities of the telecoms industry."
Mr Begg saw the writing on the wall several years ago - that the telecoms industry was changing and that the workers would have to change with it. He commissioned his own report, suggesting a strategic alliance was the way forward, while Telecom was in talks with Cable & Wireless. The talks never reached a conclusion and some felt it would have been a straight sell out rather than a strategic alliance.
He has engaged Keilin & Co, US advisers on employee share buyouts, to advise the Telecom workers. It is, observers say, a mark of how he does business. "He is the most progressive and forward thinking trade unionist in Ireland," says one observer.
Two weeks ago, Telecom said it had appointed Investment bankers Morgan Stanley to advise it on its discussions with Telecom and the Government regarding the stake.
This was seen as a positive move by the unions. However, since then there has been little in the way of "substantive engagement" according to sources close to the negotiations.
With just five days to go before his conference, Mr Begg will be hoping that the engagement becomes far more substantive.
Age 46, he was born in Rolestown, north Co Dublin. He became head of what is now the CWU in 1985, after several years working as an engineer in the ESB. He is clearly identified as being a Labour supporter, but is known to be an assiduous cultivator of politicians. Highly regarded by Finance Minister Ruairi Quinn, he was appointed to the board of the Central Bank in 1995.
Mr Begg has been known to try to set politicians of the same political party against one another in order to achieve his aims. However, if this did not work, "he would be first in the door to negotiate", said one politician who has encountered him.
Another observed that he seems to have a huge grip on the CWU, and seems fo rule it with an iron fist. It is said he will not tolerate unofficial disputes, but is incredibly supportive of anyone who has been unfairly treated.
OPPONENTS say he understands and uses the media very well and is particularly familiar with the workings of newspapers. For example, he will dine with industrial correspondents and leader writers alike is family and is familiar with their separate functions. He is regularly seen in Chapter One, in Parnell Square, Dublin.
It is by no means certain that when Mr Begg addresses CWU members next week, he will have good news to report. However, it is expected that he will be in a position to outline a concrete framework for a shareholding, well above 5 per cent in Telecom.
Few believe he can achieve the 14.99 per cent. "That was never a realistic option," says one source, but nobody underestimates his ability.
"There are a few crucial negotiating days left, between this and then," said one source.
