IF agreement on the future of Element Six and the severance package for departing workers isn’t reached by the end of September, the survival plan will be taken off the table and 370 jobs will be lost, as was originally planned, the company’s CEO Cyrus Jilla has said. This week, after sending a letter to employees regarding the situation, Mr Jilla granted interviews to two Irish publications, one of which was The Clare Champion, and he said he is frustrated with the lack of progress being made on the plan to save 163 jobs. He also claimed to be “astonished” that more urgency isn’t being shown by certain union figures.
Mr Jilla claimed that one of the unions had delayed an upcoming Labour Court hearing because an official was on holiday, a claim that is being denied by union officials.
The matter was referred to the Labour Court last week by LRC Director of Conciliation, Kevin Foley, following unsuccessful discussions at the LRC.
“We accepted a plan to save 163 jobs in August but today, the ninth of September, we still have had no substantive talks with unions. We have tried everything, we have appealed to them, written to them and gone to the LRC but there has still been no discussion on the plan to save jobs,” said Mr Jilla.
“And now to cap it all we’re not able to go to the Labour Court on the earlier dates that were made available. We have to wait until September 17 because one of the union representatives is on holidays. Our Shannon management have written to the court and thanked them but they have also expressed amazement at the situation,” he added.
Mr Jilla refused to identify the union or the official who he said was responsible for the delay. “It wouldn’t be helpful to get into fingerpointing. At the end of the day what’s needed is for all of the unions to come to the party together.”
He said that he believes most of the Shannon workers want to have the matter resolved quickly.
“It’s a crazy situation. I know that a very large portion of the workforce want engagement, but a vocal minority and certain union representatives are preventing it. It beggars belief that they don’t want to save jobs. Stringing it out is not in the interests of employees as certain people seem to think and it makes closure more likely.”
Element Six is in crisis around the world, he claimed, with huge losses being recorded in Shannon.
“We were already in a difficult situation and the downturn has only made it worse. In 2008, when the downturn only really hit in the last quarter, we made a $48 million loss in Ireland. As a group we lost $18m. At the moment our revenue is down by 50% on 2008. The situation is very dire and we do have debts and we need to meet the requirements of our lenders.”
While other plants offset many of the losses recorded in Shannon last year, Mr Jilla also claimed that all its plants are currently loss-making. He said that doing business in Shannon is more expensive than at any of its other bases.
“In Shannon we have the highest operating costs in our business globally. Wages are high, costs are high, work practices have led to reduced productivity and there are high energy costs. There are real challenges and for us the sustainability plan relies on a number of elements. One is that we would focus on the high value end of the business. The second is that we would get rid of outdated work practices and that would allow us to drive up productivity. We would not be cutting wages except for the most senior managers; there would still be good jobs and good wages.”
At the moment, departing workers are set to be offered around 2.5 weeks of pay per year of service, on top of statutory allowance, with a cap of one year’s pay. While this is far less than previous severance packages, Mr Jilla dismissed claims that the profits the company has made over the years would allow it to pay more redundancy. “The severance package is now higher than the European average and it’s higher than at any of our other plants. We are very financially constrained and we cannot afford to pay any more.”
The company has been struggling for some time, he added. “Besides last year, in two of the previous three years it was loss-making. This is a company that has been surviving from hand to mouth for some time and the downturn has made it worse.”
He was critical of the attitude of union leaders to the situation, claiming that around 1,000 jobs have been lost at Element Six plants around the world but despite plans to save some positions in Ireland, there has been an absence of co-operation.
“In all the processes we have not had any problems. Shannon is the one place where a sustainability plan has been brought forward but we’ve still faced intransigence.
“It does ask the question if the unions accept there is a crisis and if they do, what are they playing at?”
Mr Jilla said that the company are now paying over €10m to cover a pensions deficit. “We have made an enormous commitment to funding a substantial pensions deficit, with €10.725m per year every year for the next 11 years. If we are in a situation where our financial viability is in question we may have to review that.”
He said that there is no desire to close the Shannon plant, but that it may yet come to pass. “We don’t want to close, we would love to stay and we were very excited when the sustainability plan came forward, but we may have no choice but to close.”
Mr Jilla took up his current position in October of last year. He has advised Element Six for the last decade and served as a non-executive director since 2003.