Irish An Post needs Five years to deliver profit

Management at An Post have revealed a radical plan to save the ailing semi-state company from bankruptcy and to bring the postal service back into profitability by 2008. Yesterday Chief Executive Donal Curtin outlined a strategic plan which will see 1,350 letter post workers lose their jobs, with unions being offered productivity incentives to help soften the blow. The plan, outlined to an Oireachtas Committee yesterday, concentrates on bringing the company from its current serious loss-making position into profit within five years, and will see the sale of all non-core assets, including property, in an attempt to generate cash. Management believe the plan will deliver significant savings, but will include a radical restructuring with job losses and overtime cuts. Massive job cuts are needed with 1,350 jobs due to go among ordinary workers, and management numbers cut by 40pc by 2005. Around 10,500 people are currently employed. Valuable properties will also go, a process which already started late last year. The company also plans downgrading 50 post offices to sub offices which would be run by independent agents. Fifteen have already been identified and will be changed over by the end of this year. Yesterday Mr. Curtin said there was a lack of a “strategic focus” within the company. Among the problems was an “escalating and unsustainably high” cost base. In some subsidiary businesses the level of profit returned did not justify the amount of management time invested. The company would not invest in new businesses outside its core activities and would sell any non-core business assets. There would have to be cost reductions in every area. Corporate staff would be cut by by120, and postal staff by 1,350 and all non-essential property and assets would be sold. Management would not get any performance-related bonuses unless targets were met but Mr. Curtin said some employees who were performing “extraordinarily” should be offered incentives to continue. An Post intended to examine collecting TV licence debt which did not produce sufficient profit and gave a poor image. Mr. Curtin said operating losses could run as high as €30.6m this year, but when property disposals were taken into account the bottom-line loss was likely to be around €16.3m. He warned: “If we don’t change what will be left of An Post will be frightening and difficult to comprehend. It’s imperative that union discussions conclude by February.”