Unions back An Post axe

UNIONS at An Post have agreed to a radical rationalisation of the company’s parcel delivery business that will lead to the loss of 123 jobs.

SDS, which has about 40% of the Irish parcel delivery market and currently employs 427 people, has seen its revenues fall significantly over the past two years.

Competition has intensified from companies such as UPS and DHL with international operations who are able to offer customers better tracking of parcels.

Before last year, SDS’s financial problems were largely masked by overall growth in the market.

As well as job losses, the An Post unions, led by the Communications Workers Union, have agreed to more flexible work practices.

The restructuring is expected to cost the company Euro 9m this year, mainly in redundancy payments. This brings SDS’s forecast loss for the year to Euro 18m on an expected turnover of only Euro 76m.

The unions have now agreed to work with SDS management to ensure that the company achieves a margin of 5% on its business.

An Post originally sought agreement for a margin of up to 8%.

The SDS rationalisation was viewed by the unions as the best option for a company that at one point faced the prospect of being closed down. According to one An Post director, some members of the board favoured closure.

The rationalisation plan aims to shave Euro 18.2m off SDS’s cost base.

Much of this will come from a restructuring of the company’s collection and delivery service.

This function is to be outsourced to Transport, a new subsidiary company, whose drivers will own their own vehicles and be paid according to the number of deliveries and collections they make.

(C) The Sunday Times, 2003