Profile: Willie Walsh was never a man to shirk from controversy, whether as a leader of pilots against management, or as head of management against the Government, writes Arthur Beesley, Political Reporter
Willie Walsh has trumped the Government with his unexpected decision to quit Aer Lingus this week. But, sudden as the move was, it was completely in line with Walsh's forthright and uncompromisingly direct style.
Conscious that elements within the Government were growing increasingly uneasy with the direction of his reforms in the airline, Walsh took his two closest colleagues with him when they met the Aer Lingus interim chairman John Sharman eight days ago to hand in their resignations.
Walsh will leave next May with Seamus Kearney, the chief operations officer, and Brian Dunne, the chief financial officer, depriving Aer Lingus of one of the most successful management teams at work in Ireland today.
The three were already on their way by the time Bertie Ahern declared himself a socialist last week, although the Taoiseach's conversion left little doubt in the minds of many observers that he had seen enough of the cost-cutting and job cuts in Aer Lingus.
Frustrated with Government indecision on the airline's future, their departure creates a major headache for the Government, which must work quickly to avoid a management vacuum taking hold in the airline. The trio gave six months' notice, but their simultaneous resignation has exposed fault-lines within a Coalition that cannot agree a coherent stance on the ownership of the airline.
With clear divisions now emerging between Fianna Fáil and the PDs, the argument within the Government has the potential to be as divisive as the bitter squabbles over the "Bertie Bowl" stadium project. Aer Lingus wants up to €1 billion to buy new aircraft. The Government has dithered for months about the source of the money, with the Tánaiste, Mary Harney, favouring privatisation and Ahern not saying anything.
In the age in which chief executives can become celebrities, Walsh seemed to appear from nowhere in 2001 at the age of 38 to engineer a remarkable recovery in the fortunes of the national airline. He had joined Aer Lingus as a cadet pilot in 1979; rose through the ranks to flight operations management in the mid-1990s and was appointed chief operations officer in 2000.
One year later, when Walsh took over the top job, Aer Lingus was on the brink of bankruptcy after 9/11. But under his management it followed Ryanair to success by cutting costs relentlessly to offer cheaper fares. It was an arduous task, characterised by nasty industrial relations and thousands of job cuts. In the process, Walsh became Mr Aer Lingus in the same way the pugnacious Ryanair boss, Michael O'Leary, stands for his airline.
STORIES INEVITABLY CIRCULATED about Walsh's no-frills attitude to the trappings of office when it emerged that he continued to drive his 1991 Honda to work. He kept his home at Donabate, north Dublin, where he lives with his wife and one daughter, and chose not to engage a secretary. He was a CEO who answered his own phone and typed his own letters.
On one infamous occasion, he gave a press conference outdoors in the teeming rain at Dublin airport, only yards from the shelter of his office. The encounter served to heighten the sense of crisis in a difficult industrial relations moment.
"The man is a pilot by profession and pilots see the world in very black and white terms. I think that's where we're still at," says a union source.
Just like O'Leary, Walsh does not shirk controversy. He told a PD conference last year he had no problem admitting that Aer Lingus had been "ripping off its customers for years" with high fares. And he too has encountered difficulty with some in the Government.
That trouble burst into the open this week when Walsh's resignation was announced only a day after Prof Aidan Halligan opted out of the Government's health reform project. It was bad news for Bertie, and the Taoiseach took the unusual step of attacking the three men from the floor of the Dáil.
At issue was their audacious proposal to develop a bid to take the State airline into the private sector. In forceful remarks on Wednesday, the Taoiseach all but accused the trio of trying to make themselves "extremely rich" on the back of a hard-pressed, depleted workforce. The Aer Lingus unions believed the three managers were working to improve their own position instead of the company's future, he said.
Walsh quickly denied the claim, although the Taoiseach's faint praise for his team told its own story. Ahern's brand of "Botanic Gardens socialism" and deep sense of public service was always going to resist any suggestion of a management buy-out of a major State company. Equally, however, many noted that the Taoiseach's attack on the management meant he didn't have to declare his own stance on the airline's unresolved demand for investment.
Meanwhile, a completely different view was emerging from the PDs. Not long before Ahern got into his stride in Leinster House, Mary Harney had told reporters that Walsh and his colleagues had done a fantastic job at Aer Lingus and said their departure was a great loss to the company.
The deliberate adoption of contrasting arguments points to a deeper divide between Ahern and Harney, one that is all the more serious given the fundamental policy principles at stake.
AS BOTH LEADERS stepped up the rhetoric this week, it became clear that the union-friendly Taoiseach and the market-loving Tánaiste are far from a compromise on the ownership of Aer Lingus. Ahern, it is said, has no current appetite for privatisation. Harney sees it as the only choice, saying money badly needed by the health service should not be used to buy jumbo jets.
As if to stress the differences, the Taoiseach said this week he had ruled out Walsh's investment proposal from the outset, even though he never said that publicly until after Walsh had withdrawn the plan. This position was in direct opposition to that of the Tánaiste, who indicated publicly when news emerged that the option should be considered.
Harney was at one on the issue with the former transport minister, Seamus Brennan, who publicly favoured the principle of allowing the men develop a bid. Ahern later demoted Brennan from the prestigious transport job.
Walsh's approach was fearlessly single-minded. Never afraid of a bold move where others would go lightly, his proposal to take the company private was announced to the press late on a Friday afternoon in July at the end of what had been a chaotically busy week for Brennan.
He seemed to be suggesting the impossible, that three public servants would buy the Government out of a prized, albeit troublesome asset just because they wanted to. "Audacious?" said a union source. "It was outrageous." While some senior sources in the Government circle believe the proposal was merely a ruse to extract a decision on ownership from the Government, the plan quickly ran into the sand. Ahern, who does not like being dictated to, kicked the question into a subcommittee and spent the summer thinking about his reshuffle.
WALSH PULLED THE proposal in October as the trio sensed increasing Government unease at the pace and direction of their plans. Despite the airline's recovery, the three men envisaged yet more cost-cutting, including the elimination of business class.
Ahern appeared to confirm his unease with some of the plans when he told the Dáil on Wednesday that there was "much evidence" of concern in the business community about the reduction in the nature and quality of the connections operated by Aer Lingus.
The Taoiseach was suggesting the withdrawal of business class services would damage Ireland's competitiveness. The implicit message seemed to be that Ahern was calling a halt to relentless cost-cutting in the national airline.
The irony here is that neither Ahern nor anyone else inGovernment stood in the way of Walsh when he was attempting to engineer the airline's recovery after 9/11. What has changed now is that Aer Lingus is back in profit. The company made €90 million last year. It is on course to make €100 million in 2004.
While 1,500 people recently signed up for the latest redundancy programme, it is perfectly possible that Ahern feels, for electoral reasons, that further cuts cannot be justified while fat profits are being made.
There is no doubt that Walsh has a different view. Yet his work is coming to an end in Aer Lingus, a company of which he is said to have "absolute" knowledge. "He knows every star in the sky. If you wanted to fly from Dublin to New York, he'd tell you how much it would cost for every second. As well as being his job, aviation is his hobby and his obsession," says one senior insider.
Walsh made his name in Aer Lingus as leader of the pilots in their quarrels with the management. In his radical union days, he once wrote in a staff publication that "a reasonable man gets nowhere in negotiations". If he was dogged then, he hasn't stopped since. Bertie won, but Willie will be back. In his next job, he is unlikely to work for a Government-owned company.