An Post is facing huge financial losses at a time when customers are unhappy about the levels and cost of services and its workforce is disturbed by new work practices and proposals to reduce the number of employees.
At the same time, vital restructuring plans are tied up in deliberations at the Labour Relations Commission. And the Government, as sole shareholder, is behaving as if these matters were outside the scope of its responsibilities.
There seems little doubt the company's new chief executive, Mr Donal Curtin, is anxious the semi-State company should return to profitable trading. Last month, An Post announced the closure of its parcels service, SDS, with the loss of 270 jobs. That decision will see SDS reintegrated into the main An Post group and the National Implementation Body has recommended that the company provide trade unions with details of the financial rationale involved. An Post is also awaiting a decision by the Commission for Communications Regulation (ComReg) on an application for a 14 per cent increase in the price of an ordinary postage stamp, which would bring the rise to 34 per cent in a 12-month period.
Morale at the loss-making company is bad and the industrial relations climate is said to be poisonous. Last March, postal services were seriously disrupted in a dispute involving pay, the implementation of a recovery plan and new work practices. The Minister for Communications, Marine and Natural Resources, Mr Ahern, complained last year that he was not kept informed of the worsening financial position at the company. An operating loss of €30 million is forecast for this year following a €43 million shortfall in 2003.
The need for 1,500 redundancies was made known by An Post some time ago. But proposals to give effect to that scheme are still being held up. In that context, management's application for an increase in the cost of letter postage is clearly designed to plug the looming gap in its finances, especially as the Government adopted a hands-off policy about two years ago when the Cabinet refused subventions to pay for the retention of sub post offices and other services.
The decision to seek a second increase in letter postage charges - the only area in which An Post retains a monopoly as the EU encourages complete deregulation by 2009 - would appear to be short-sighted. The company has been unable to compete in the parcel delivery business, as shown by the proposed closure of SDS. It has complained that some Irish businesses are illegally using British Royal Mail to save money and to deliver post more cheaply. That practice may now accelerate. Last year, for the first time in decades, the number of mail items delivered (mostly letters) declined by three million, as people switched to using email.
Given the pressures evident in the business, a policy of reducing costs and demonstrating that it can achieve long awaited efficiencies, rather than increasing charges, would be more credible and more likely to bring success.