Who does Dermot Mannion work for?

by Gyro Wed Mar 22, 2006 12:42

This is an interesting article and well written, with much knowledge of what you are on about. It is interesting how our mind-sets are changed with the modern focus on growth at all cost. I would be of the old school, I suppose when we were not so blinded by material welloffness; my primary focus would be on having children and raising my family and thereby creating good honest citizens as opposed to having the shareholders as the primary recipients off my efforts.
Anyhow, I have to accept for this discussion that the shareholder must be satisfied and therefore my full 24 hours would be at their service! The Germans are now seeing the folly of this false commitment with their late realisation that they have sacrificed their nation’s future to the Mark, Euro, Dollar or whatever currency the shareholders are most happy with!
My wife and I flew with Emirates to visit my daughter in Sydney when Mr Mannion was at the helm. It was a fantastic flight, the cabin crews were top class, entertainment (ICE) and meals were A1. The flights (stopped for a few days in Dubai) seemed to pass faster than many journeys to the West of Ireland. This man would never have risen to the top of such a prestigious airline without being a competent and upright person. He has sacrificed a lot to come back to this country. The Arabs choose well, but crucially they gave him the resources. The Arab Governments do not need immediate return on their investments, they can wait for many years while their management can build an airline that can produce top class service, have contented employees etc. When this happens, the world builds a path to its door and the shareholders can get their dividends. Look at the Eircom fiasco, the shareholders drew huge dividends shortly after investing and the pace of changing technology seems to have overawed the employees; their customers are leaving in droves.
The Irish Government seems to be very reluctant to invest in resources that can bring huge returns to its citizens. Look at the Hydrocarbon fiasco, where foreign investors will make huge money with not even a smell of copper coming near the citizens of the Irish State!
With Aer Lingus, people are losing sight of the sure and firm foundations that it is built on: a rock solid world wide image; based in a country that is economically thriving; in a country that already has produced airline executives of world class calibre e.g. Ryans, O’Leary, McEvillys etc; possessing a CEO, Mr Mannion with proven world wide credentials as a manager in the same airline industry. If the Government does not see that this is a ready made case for the State Pension Reserve Fund to invest in; one can only surmise that ROI is not the major criteria in going forward.
Now, Vulture Capitalist, whatever the Government does is yours and my fault; after all we voted them in. If we could link salaries to the number of children that employees have, we might be achieving something very positive. But then we would need to renew our lifetime commitment to marriage or whatever; perhaps by means something similar to the indoctrination that you received in the expected commitment to your Shareholders. I am afraid that the dismantling of the barriers that held the family together in Ireland in the last quarter of the last century, has left the Irish Society defenceless. The cradle of the Irish Diaspora worldwide is being dismantled. All our Government Ministers have revelled in this Diaspora over the St Patrick’s Week. Irish society, commitment to regeneration etc is no match for the expected commitment that employees of today’s Capitalist Institutions demands. There are c.125,000 less children in our National Schools in 1999/00 (Yes, in other guises, I have being crying in the wilderness for a while) than in 1985/86 resulting in about 250,000 less kids under twenty years of age today. Immigrants eventually adopt the social mores of the host country as in Europe and exacerbate the “Old Aged” problem. There were 70% more births in the EU15 per head of population in the early 1960s than there are now. You can buy a house worth €100,000 more if you defer that second child, having already written off any hope of a third, fourth, or fifth child etc. Our young people on salaries of €60,000 per annum are not even able to feed that one child. Such a society that puts such emphasis on Capitalism (with its need for Growth) is heading for meltdown!
Now, give €2Bn to Mr Mannion from the State Pension Reserve Fund. He is capable of building a company that will be the model for the whole world throughout the 21st Century. This man’s dreams are that wide. Don’t mess him about or we all lose out!

by me Wed Mar 22, 2006 13:15

I have a lot of sympathy with some of your views, but I think that this article is rather simplistically presented. My main point is that being a state-owned company is not like being a company owned by random shareholders.

You say “Putting money into Aer Lingus is either a good idea or a bad idea.” I disagree. The source of the money has a big influence – whoever pays the piper calls the tune.

No-one would dispute that Aer Lingus workers have very significant political clout in north Dublin. Letters of comfort (guaranteeing jobs for life to some privileged ex-Aer Lingus workers) are just one example of how privileged workers used their political clout to extract employment terms that are not available to most people.

This was because they had the power to influence their bosses’ bosses – so we had an airline being run not to transport the citizens, but to provide cushy jobs for privileged workers.

The Telecom Eireann example is an excellent one. It was run for the benefit of highly-paid employees. Providing a telephone service was seen as a barley relevant distraction, and we had the worst and most expensive telephone service in western Europe. At the time of privatisation TE had 125 employees per telephone line in the country. BT had 300; the European average was 250.

TE charged 44p (56c) per minute to telephone Britain. Now they only charge 25c and if you shop around with smaller suppliers you can get rates at 5c or less.

Of course capitalists see customers as second to shareholders, but so do governments, with the added disadvantage that governments put customers behind employees as well.

Privatising healthcare and education doesn’t work because the customer is not well educated enough to know what they want and need. But with telephone calls and airline tickets, citizens have no problem deciding what they want, and they have clearly decided that they don’t want state-owned former monopolies.

So who should provide the money and call the shots? Capitalists who maximise shareholder value by getting the most customers, or governments who maximise employee value by subsidising them with taxpayers’ money when people get fed up of their bad service?

by Socialist Wed Mar 22, 2006 14:05

It is a fact that workers are being exploited by the bosses - the government should be replaced by the people governing themselves and Aer Lingus should remain nationally owned by all the people of Ireland as should all industry and commerial enterprises.

by Shop steward Wed Mar 22, 2006 21:11

Me,

don't you mean lines per employee and not employees per line. I'm all for full employment and the occasional restrictive practise but 150 employees per telephone line is carrying things a bit too far :-)

Seriously, though you've fallen for one of the great myths of our time, yes, the old COMPETITION ALWAYS BRINGS DOWN PRICES cliche beloved of every 3rd rate economist who can't get a real job and churns out the same repetitive drivel for some media organ owned by the very "investor" who picked up a license to compete with a former state monopoly on the cheap after contributing handsomely to party funds. (Just a political contribution, of course, no favours asked or received - you know yourself)

But compare the prices, whines Professor 3rd rate. Prices me arse, compare the technology. When old telecom Eireann was charging 56p per minute or whatever, calls to britain were carried on old fashioned technology like analogue co-axial cable and radio links. The height of technology in early 80's was digital co-axial carrying 1920 voice channels on a single cable with repeaters every 2 miles. Now fibre optic lines can carry tens of thousands of voice channels over huge distances and you can put dozens of fibres in each cable. Thats what the internet is made of. Telephone exchanges have gone from the size of a house (literally) to modular units that can be mounted on roadside boxes. THAT'S whats made telephony cheaper, not competition, not Denis O'Brien, not ESAT, O2 and all the eejits coldcalling to "whoever pays your telephone bill" not to mention the crazy frogs selling ringtones to 12 year olds at a fiver a pop.

by Me Wed Mar 22, 2006 22:53

Hi Shop Stewart

Correct on 125 lines per employee.

I didn’t say that competition always lowers prices – I gave two examples of where markets don’t work. What I do believe is that competition usually lowers prices. I don’t restrict my argument to financial costs either – the taxi monopoly imposed a cost of waiting for hours in the cold and rain on their customers.

So until harm is proven, I believe it is an infringement of someone’s liberty to say that they can’t trade goods or services with another person, just because it suits privileged workers.

You are correct that advances in technology made cheaper telephone calls possible, but you missed the vital point – TE workers succeeded in preventing MF technology (phones that make beeps) from being introduced for more than a decade. So Ireland was stuck with rotary-dial phones, or button phones that had to be specially adapted to make the ticks like a rotary.

While other countries steamed ahead with deregulation and price-cutting, Ireland lagged behind. The new technology was only brought in when competition loomed, and the unions were bought off with the ESOP, giving them hundreds of millions in free money, from the taxpayer.

This could never have happened in a competitive market, because the most advanced competitor would have an advantage, and the least advanced would either get in shape or go out of business.

When the company is state-owned, there is a third option – lobby politicians to force the management to run the company like a workers’ charity, overcharge, outlaw competition, and get taxpayers to stump up for the losses.

The effect of this is that non-unionised private-sector workers (generally lower-paid) must work harder and pay higher taxes and prices, so that lazy public-sector workers don’t need to do a proper day’s work.

By the way, 25 years ago it cost IE£400 to fly to London and back – say €2,000 in today’s money. Now you can get it for €100, sometimes much less – what happened there?

by Ex-Air Lingus Employee Wed Mar 22, 2006 23:48

Since many airport workers live in Mr Ahearns Constituency, one way to fight this would be to launch a 'Get Bertie' campaign, so that he's left in no doubt that if this goes through he's out on his arse at the next election. Taoiseach or no-bloody-Taoiseach son, you're history

by vulture capitalist Thu Mar 23, 2006 00:09

Yes, very good me, you've read the Frank Fitzgibbon opinion piece and bought in to the consumer paradise that is competition, the solution to all public sector ills.

Sort of irrelevant to the point of the argument. Investment decisions are binary - good or bad, positive or negative returns.

You say “Putting money into Aer Lingus is either a good idea or a bad idea.” I disagree. The source of the money has a big influence – whoever pays the piper calls the tune.

What influence does the source of the money have? For who? Just as any good investor who believes not only in the potential to get rich without doing any work but also in the near perfect efficiency of any fully arbitraged market, I am only interested in what is the best approach to my existing assets. I know the source of the money - me.

You raise the spectre of cushy jobs for privileged workers. As Dermo said in his Prime Time piece, and as is well known by anybody who has read a newspaper, the company that Mr Mannion supposedly manages on our behalf has downsized from 6,500 to 3,500 jobs in the last four years. Sorry - we're not even talking French private sector job protection here - let alone the outdated notions of the semi state you got from your SIndo columnist of choice.

But I don't understand - I'm really not sure how the interesting diversion that yourself and shop steward had launched off on would aid my understanding, or even what relevance the exact date our telephone system started lagging behind or how the litany of evils inflicted by public sector unionised workers is actually about to land on my head if we don't sell off landing slots in Heathrow, JFK and half a dozen other global hubs. Your sub-Michael O'Leary measuring of all personal fulfillment by the price of a flight to heathrow is reassuring in it's predictability.

Load of crap though.

I am not interested in this as a consumer. I've caught the stakeholder democracy bug, I'm assessing investment opportunities, making plans for the future, maximising the returns to me as a shareholder. And Dermot Mannion is not performing his duty to me because he's been bought off. Peer review would actually touch on this issue, not tell me who was right at Kronstadt or other boring meanderings. Who's Dermo really working for?

Gyro - do you really think there is a future in a full service airline?

Shop Steward - is it true Albert Reynolds, in the last great Fianna Fail command economy investment, gave us a state of the art telecommunications system in the early 80's?

Socialist - do you and your friends have a band?

by Badman Thu Mar 23, 2006 00:28

"By the way, 25 years ago it cost IE£400 to fly to London and back – say €2,000 in today’s money. Now you can get it for €100, sometimes much less – what happened there?"

Um... quite a few things?

25 years ago a computer that could connect to the internet cost a few million too now you can get them for a few quid. What happened there? Secret underground trade unions and behind the scenes government control?

or to put it another way, comparing prices 25 years ago is a really stupid argument...

by Frank - Union Member Thu Mar 23, 2006 01:01

Dear Me,

Just to give the real facts on the Aer Lingus workers who obtained these so called Letters of Comfort. Qualified Engineers (tradesmen) who were emoployed by Aer Lingus and were seconded into Team Aer Lingus, are today still working in the kitchen, loading bags and cleaning aircraft as a result of remaining in Aer Lingus when Team was sold in 1998. In the meantime Aer Lingus have up to 18 Aircraft Engineers on 2 Year Contracts (up for renewal soon).

This case has been in the High Court and subsequently in the Supreme Court. These employees are not claiming jobs for life. They are wanting to be treated as if Team Aer lingus never existed and be on the same par as those trades men who were not seconded into Team Aer Lingus.

by i_would_know Thu Mar 23, 2006 01:58

Instead of rubbishing your reasoning, i'll take on your suggestion head on. Investing in Aer Lingus is a poor invesment because:

it employs 3000, but has to finance pensions for 8000,
And replace all its capital (planes),
And radically expand the amount of service it provides because it still have 1000 more employees than it's competitor but doesn't schedule as many flights.

If i was buy such a company i would expect a serious discount.
Please reply whoever you are!

by Vulture Capitalist Thu Mar 23, 2006 11:38

I would propose that the factors you are throwing up are already in the price that is being quoted of €600m. The €200m hole in the pension fund is constantly referred to and the need for capital reinvestment is the whole point of this.

On the fundamentals - Aer Lingus made 12% operating profit on €900m turnover in 2004, the last year I can find a report for. (last year saw a drop but in line with the rest of the sector). The cost of restructuring has already been borne (e.g. a €100m exceptional charge in 2004) and the shareholders funds sit at €400m. The company is v. cash positive, already carries liabilities on it's balance sheet to cover non-pension entitlements of current and former employees.

So a case can definitely be made for an investment - unless your points about operations holds true. The opening of new long haul routes and the Airbuses that are coming on stream with / woithout privatisation show that the mgt is well aware of these issues.

But all of this is beside the point. If Aer Lingus is a good investment then it should be recommended to the current shareholders.

If Aer Lingus is a bad investment, how do they expect to raise money on an IPO? Unless of course, it is a bad investment as a going concern - but there is the potential to raise money on a break up.

Is this what your point is?

by Gyro Thu Mar 23, 2006 11:54

Mr Mannions stated objective is to build up Aer Lingus capability in the long haul flight area. This requires that a full service is provided. The rewards would be very attractive, especially if you could fill c.300 seats at €1,000 each. The recent travels of our Ministers to all parts of the world for St Patrick’s festivities is proof that Mr Mannion would not be just entering territories where Aer Lingus would be totally unknown. There would be lots of initial Good Will. What a kick start!
The government has more or less given the idea that they want a private flotation of shares on the Stock Exchange. They employ Mr Mannion, so he can hardly go publicly pleading with them. I assume Vulture Capitalist that when you say that you own shares in Aer Lingus, it is via the government.
Listen, the Stock markets are due for a correction. The French are thinking of liquidating their Pension Reserve Fund, currently about €25Bn. They are finding that they have more pressing needs at the moment. The Irish Pension Reserve Fund should immediately sell some of their holdings now and invest in Aer Lingus. Share Values are again at top of the market prices, it is the time to sell. It is my opinion, because of drop in birth-rate in the Capitalist Western Countries that Shares are now overvalued. (Where is the demand that creates consumer culture going to emanate from? I reckon that demand in the EU15 is being hit by c. €600bn and rising since the 1960s; again I shouted this from the rooftops in the year 2000, but no one listened.). A spark will ignite the freefall, and it will certainly be provided by the French if they decide to sell. We can provide Mr Mannion now with paper money by a wee adjustment to our Pension Reserve Fund Portfolio, and he can proceed with his plans.
“Over the last three years the annual contribution of the State to the Fund has been reduced. These actions threaten the survival of the Fund which may not be able to reach its goal in 2020. Last November some French senators were close to eliminating the Fund.” http://www.globalaging.org/pension/world/index.htm

by I_would_know Thu Mar 23, 2006 12:38

the value in the company is only realisable if it is in private hands , in the long run. In state hands it has much less value. The basic problem is that in order to realise value for the shareholder , the ceo will need to follow an agressive hard nosed business strategy. Make no mistake Ryanair has made money consistently because of Micheal O'leary methods.

Further more i would say this as food for thought: the national strategic interest is in having as many planes coming from as many places as possible , not aer lingus.It is ryanair that has radically increased the use of Dublin airport and the number of places served. Competition from private companies have improved our strategic interest not Aer lingus.

Second people worrying that now private investers would get to decide whether to fly into ireland ornot ,is a non starter. Firstly dublin to london is the busiest route in the world so i think that these investers would look to chop flights elsewhere.After all private hands decide whether we get fed or not.

This brings us full circle to the where i almost agree with not selling the airline ,but for totally different reasons! In order to get the biggest price we need to sell the whole company, and dilute the employee share to less than 10%. But even then we have to sell it at discount for the reasons i elucidated above, so it's more trouble than it's worth! This isn't an economic decision its political , so i think our minister should concentrate his efforts where there is most money to be made or saved on our behalf. IT is on the ground at the terminal where we have the most problems. Ryanair uses an airport with the same capacity as the expanded cork airport. But while cork cost 180 mil the german one cost 18.
In dublin Ryanair offered to build a terminal for 125 mill .But the last estimate i read in the times was 1 billion. Theres no point in having the 2 most efficient airlines in the world if the landing fees make it expensive to fly !

by eeekkkkk Thu Mar 23, 2006 12:58

burn off the atmosphere you boomer nihilists and fuck your grandchildren

by I_would_know Thu Mar 23, 2006 13:14

"burn off the atmosphere you boomer nihilists and fuck your grandchildren" what the fuck is your argument ? It's the sign of having nothing to say when you resort to such nonsense. Who are you , and what pointless difference do you make to the world ? in shala in shala

by eeekkkkk Thu Mar 23, 2006 15:11

That greatest single cause of man made global warming is cheap mass air travel

Global warming is very quickly becoming an emergency - even in the UK (water)

most experts in geology and fossil fuels recognize that the global oil supply possible has peaked - war anywhere there are pipelines

results of continued overreliance on oil / cheap air travel / cars

=

sudden disastrous transition from oil based society to one that has no oil and no tech replacement

runaway global warming and dublin under water by the middle of the century

a hobbesian universe of fascism and war over resources

=

So I think any side arguing for more ryanairs is irresponsible and nihilistic

both sides who have power here on this issue are irish boomers (56-68 age group)

they don't give a fuck about the future their grandchildren will live in or if they do they show no signs of it

They are too caught up in their memories of scarcity in the 40's and 50's and have no level of self-knowledge

they've poisoned 1/3 irelands rivers and laked

groundwater contaminated all over the place

site from whence budget skyburning travel is absolutely lionised in europe

spending money cynically on more and more roads when rail is necessary within at the latest 30 years just so construction sector can boom

facilitating myriads of septic tanks on the shores of lakes all over ireland

having cake and eating it through elite use of helicopters to avoid the contaminating traffic nightmare they have created

I could go on but it's too depressing

This finally however goes some way to explaining the absolute hatred being displayed for the greens and environmental campaigners countrywide

they at least are future oriented-they freak out the boomers so much because they know their guilt at some level but would prefer to distract from it by doing the equivalent of sticking their fingers in their ears and screaming abuse at anyone who says that anything except individual responsibility to get rich / consume exists

by Joe Thu Mar 23, 2006 15:36

You'll find a detailed discussion of what eeekkk is on about at http://www.anarkismo.net/newswire.php?story_id=2672

It may well not be as bad as he thinks but there are certainly more questions to cheap air travel than you think

by eeekkkkk Thu Mar 23, 2006 15:41

1/3 of irish rivers and lakes are polluted
the polar icecaps etc are melting
global warming is happening

when very bad things MIGHT happen and any control is available to you one generally decides to take precautionary action

I read that article - it's a good summary of the issues

those droughts in africa are not just a chance occurrence

by Fly Boy Thu Mar 23, 2006 15:51

Do you want to get rid of Air Travel? How is the Air Travel Industry responsible for polluting one third of Irish Rivers? Its people like you who get Greens a bad name. Ordinary people be they Middle Class or Working Class will not listen to your nonsense. They are happy to take holidays abroad and use Jets to get there. I am in favour of conservation but not at the cost of going back to a Hunter-Gatherer Life-Style which you seem to favour.

The only way that your views would ever prevail is through a Dictatorship because ordinary Citizens are not going to vote for your whacky ideas. People will not accept enforced veganism or enforced population control. They do not wish to return to living in caves and singing songs around a fire.

by Joe - WSM 1st of May (personal capacity) Thu Mar 23, 2006 16:14

I'm addicted to air travel but all the same I recognise the problems

1. Because planes dump their Co2 and aerosol output high into the atmosphere they make a much greater contribuiton to global warming per litre of fuel then other modes of transport. Google this for more

2. Cheap flights may not be around much longer anyway for the reasons outlined in the article. But to save on the reading just look at how fast energy prices are now increasing. If as the article suggests demand for fuel increases but supply decreases then these price increase will continue and they are already hitting the cost of seats. Planes are very much more efficent than they used to be when you consider fuel per passenger mile, there is probably not that much room to squeeze extra efficency out (the new supersized one will squeze a little). So prices will rise and probably rise sharply in the years ahead. Again see http://www.anarkismo.net/newswire.php?story_id=2672 for the reasons why

Eeekkk global warming is a seperate if connected issue, in some ways if the worst case peak oil hypothesis is true global warming is the least of our worries. Unfortuantly the linkage between the two probably means the reaction to rising energy prices will be a desperate scramble to extract less efficent more polluting fossil fuels that will generate a lot more Co2 and other crap for a much lower energy return. I don't go for the worst case though.

I'm not sure what the linkage between flights and water pollution is but I guess maybe your just making a general point about the environmental downside of the celtic tiger.

by risible Thu Mar 23, 2006 17:39

Essay in Guardian draws attention to draft treaties between US/EU preventing EU implementing environmental measures which would negatively affect US airlines.

by i_would_know Thu Mar 23, 2006 17:47

listen glodbal warming global schwarming, and not because i don't care about it.

The cycle in earth is so long that if global warming ( which i don't doubt ) is a result of primarily our own actions (which i'm not certain), then what we are seing now is the result of deforestation some 2 hundred odd years ago.

I am not clear that we can physically do very much about it, even with the best of intentions. We would need to stop co2 emmisions period. (turn everything , everything off ). But that would not be enough. We would have to reforest 80% of the worlds surface and fast. Even that might not reverse or even stop global warming. As it is we (humans) contribute around 20% of the overall total of co2 emisions in the world. It not exactly a nice thought but the rest comes from animals breathings farting and rotting.

look at it with a broader view, once ice starts melting, then year on year the earth reflects less sunlight than the years before and so it heats up. Given that this has already started it's not realistic to think we can stop it mid flow. I think we will have to just ride it out for good or bad!

Incidentally global warming won't spell the end of the world , just the end of most of humanity. Ice ages and melting ages have been going on since the dawn of time.

You could cogently argue that burning oil is infact restoring the earth to it's proper state since oil is just dead animals.

If you really believe in your cause ,then i tell you that no , NO means of energy other than nuclear can replace oil.

But this is seperate to the discussion on whether dermot mannion is ripping us off , so i think you are still a moron.

by eeekkkkk Thu Mar 23, 2006 17:49

'How is the Air Travel Industry responsible for polluting one third of Irish Rivers?'

I didn't say it was - but the profit at all costs motive and cultural mindset among the boomers now in power political class which leads to it is the same which is what I was trying to point up.

Among cheerleaders for nihilistic growth anything green is bad anyway so your reaction is standard head in the sand nihilism.

by eeekkkkk Thu Mar 23, 2006 17:54

Booster Boomer I-Would-know

Nuclear booster too eh?

Anything but off-grid decentralised energy or politics (or security) right? Even a waste problem that'll last a million years?

Why am I a 'Moron'?

Because you don't agree with me?

by i_would_know Thu Mar 23, 2006 18:25

I am neither a nuke supporter nor basher.

I know better than you as i have a P.H.D. in the subject of electricity grids. The mathematics we need to design and control a decentralized electricity grid have not been discovered yet.

So we have no idea how to control, design, built, execute, operate,and maintain such a system. A decentralized electricity grid is currently more fanciful than star trek's beaming people from one place to another.

Secondly if you examind what i alluded to about the ice melting and sun reflecting . We would have to progressively reduce the level of co2 each year. It would not be good enough to stop making new co2. We would have to devise some way of radically reducing the level of co2 in the air. Reforestation at this stage would not work quickly enough to save us. The earth is now in a cycle of ice melting that is working regardless of the co2 levels in the world.This is not however to be feared , it happens cyclically anyway. whats not clear is how sever it will be.

It is not all totally fucked. If we are lucky a few proper volcanos will go some way to helping us out ( even if they do wipe out the odd million). In fact if we could design a nuke that didn't create radioactive fall out , exploding a good lot of them underground would probably do the trick.

It's not that you are a moron for wanting to improve things it's that you are totally unrealistic. You are however a moron for introducing global warming into a privatisation discussion.

by Fuming Thu Mar 23, 2006 18:31

So we can't use wood, coal, oil, gas or nuclear power until we come up with a renewable energy - not all of us live close to a source of hydro power, wind power varies enormously and the quantity of available sunlight is not universally available. So what do we do eeeek? Walk everywhere, freeze to death in the winter and eat cold raw meat and vegetables and drown our children at birth to control the population.

Get back to the original discussion for all our sakes!
Me come back!

by eeekkkkkk Thu Mar 23, 2006 22:59

why am I a moron for introducing global warming into a discussion of privatisation?

When global warming really as you so inhumanely put it starts 'to kill off a million or two' - the rich will be able to afford amelioration measures while profiting from destructive privatised industry - have their cake and eat it - the poor will suffer the brunt of it through having no control over climate OR industry causing the problem OR control over their physical location as they won't be able to afford the price of air transport.

You my friend are what I refer to as a helicopter head and you aren't the only one with an education here either.

No engineer will design a decentralised grid and impose it on people - all thatidea is is the egomania of engineers - people will do it themselves with co-operation from non-booster engineers through their ingenuity when they snap out of consumptomania.

by Shop Steward Thu Mar 23, 2006 23:49

"Shop Steward - is it true Albert Reynolds, in the last great Fianna Fail command economy investment, gave us a state of the art telecommunications system in the early 80's?"

What Albert did around 1979 was borrow a shitload of money to start the process of giving us said state of the art system. This debt was spun off into Telecom Eireann when it became a semi-state company in 1984. (Didn't show up in the national debt that way) He is entitled to some credit for this this because before his tenure our system was really crap. This was purely due to complete lack of investment and not any kind of restrictive practise as alleged by Me. (The previous minister for P&T was Conor Cruise - nuff said. His lasting contribution to Irish Telecoms was to insist that the then latest French exchange was bought for to serve the Howth/Sutton area - it turned out to be shite and was one of only 3 ever bought for this country. But because it was new it was kept until well into the nineties. Thus Howth was one of the last areas in Dublin to go digital - nice legacy dumbass!) Anyway, even though Albert is a caricature of old style FF gombeenism, in fairness, he did the right thing at the time for telecomms. The digital programme went ahead as fast as the money was pumped in - there was no delay caused by the CWU or the other unions. And by the late 80's early 90's we had pretty much a state of the art system, certainly better than the UK. Industrial relations were good throughout this period and the CWU was totally supportive the modernisation even though it reduced technician jobs and many members were redeployed within the company.

as for Me who stated: "You are correct that advances in technology made cheaper telephone calls possible, but you missed the vital point – TE workers succeeded in preventing MF technology (phones that make beeps) from being introduced for more than a decade. So Ireland was stuck with rotary-dial phones, or button phones that had to be specially adapted to make the ticks like a rotary.

While other countries steamed ahead with deregulation and price-cutting, Ireland lagged behind. The new technology was only brought in when competition loomed, and the unions were bought off with the ESOP, giving them hundreds of millions in free money, from the taxpayer."

Totally wrong on timescale. The ESOP was set up in 1999. The system had long previously been upgraded by then. There was NO decade long delay in introducing digital (or what you call MF) technology. It started in the early 80's and was completed in the early 90's. FAR too early to have been bought off by an ESOP scheme in 1999!

It was post-privatisation, post-deregulation when investment dried up (to pay dividends to the new owners) and we are now left with 15 year old technology while the rest of the world has moved on. The parallels with Aer Lingus are obvious for those who wish to see rather than those blinded by idealogy.

by i_would_know Fri Mar 24, 2006 00:08

eeeeekkkkk i'd be happy to continue the global warming thing if you set up anothing stream.

But again getting back to the original discussion. Attempted parallels between the telecom industry and aviation in ireland are apt. Although so far privatisation of eircom has been written off as a complete waste, the future may give a different conclusion. The current main gripe with eircom is that they are impeding the roll out of broadband. ( From their point of view they should do everything possible to stop broadband , because it permits near free phone calls) However consider if Eircom was in state hands and it was mandated to install broadband in every home. There is currently a very good chance that broadband delivered through the telephone will be obsolete in a few years. Currently there are a myriad of ways to get connected. In the future one will win out. Why does this matter you say ? Well France introduced at huge cost an incredidbly advanced (at the time) minitel system. Soon after the internet made it completely redundant. However France still uses the minitel system and had to bear huge costs. What seems like strategic interest now can turn into a white elephant with a click of your fingers.

by vulture capitalist Fri Mar 24, 2006 03:30

the value in the company is only realisable if it is in private hands , in the long run.

This is the 'flip' argument. That has relevance to the investment banks who first analysed the situation and recommended privatisation and then, altruistically, agreed to manage the privatisation process for us. It may have relevance to the people with a share in the ESOP. But it doesn't have any relevance to me, with my 85% share that the proposal is I reduce to 25%.

This brings us full circle to the where i almost agree with not selling the airline ,but for totally different reasons! In order to get the biggest price we need to sell the whole company, and dilute the employee share to less than 10%. But even then we have to sell it at discount for the reasons i elucidated above, so it's more trouble than it's worth!

OK, Dr I would know. You agree that the price I am going to get will not be any higher than the potential return on an investment. From a financial management point of view, there is no point in selling Aer Lingus.

You also have an unusual argument regarding Eircom. When in state hands, Eircom had a strategic state investment which saw the citizens of this state benefit from state of the art voice technology and which in part was an element in attracting all them luvverly foreigners, the ones with the platinum cards and business plans. Then it was privatised. Then technology developed and there was no investment to keep up with this, no DSL roll-out and always on internet products. It was now private and the assets were sweated and the infrastructure lagged behind. This was a good thing in your mind, because everybody having broadband is way worse than 30% have a whole range of broadband to choose from five years after most countries.

I really don't see this privatisation means we are worse than everywhere else so really, secretly, better off argument working too well for you, but whatever.

The key point you are making with regard to the core investment decision is that Aer Lingus should not be privatised. But do you think Dermot Mannion has a legal responsibiity to us, his employers to agree inform us of this. Is there, amongst the things you know, knowledge of why Dermot Mannion is not telling us this, of where his 'fuck you money' will arrive from?

eeekkk - you're thinking like a citizen or an inhabitant or a worker. Give it up and embrace your inner investor and you won't need to worry about all that.

shop steward - I was told that in a business course in the late 80's I think, but always wondered if it was apocryphal. Thanks.

by i_would_know Fri Mar 24, 2006 11:01

I cannot agree with your conclusions because there is more to this. You are examining the precise question , will ireland make money out of selling aer lingus ? In answering that I could almost agree with you, Ireland may have to sell aer lingus at discount (due to it's costs) however that could be countered by the fact that it is in much better shape than many of its competitors on a europe/worldwide wide basis. Thus investors will be weighing up the possible huge gains to be made ,and ,so on and so on.

Granting that earlingus might not be worth as much as we'd hoped , that doesn't mean it is not a good idea. If aer lingus goes on to reduce fairs and increases the number of flights then as a whole ireland wins hands down.

Maybe your rantings aren't as autistic as i originally thought. The stronger the company the more ireland inc. earns from selling it, however the private entity is then free to gouge it's customers. The weaker the company the less ireland inc. earns , but then the company is free to slash costs and deliver the cheapest ( cheaper ) prices. Again this final analysis suggests that we may both be right. However consider the first (your eircom situation) having sold it off ireland has no longer any interest in protecting eircom anymore, and soon enough competition kicks in ( as has happened with eircom ). Can i convince you that ear lingus in private hands will allow aer lingus to aggresively increase it's services to all our benefit, and the short term interest of a few bob is less important than the long term interest of lot's of cheap flights in and out of ireland (well dublin ,and kerry it would seem from ryanair latest press release ) bringing in those yanks with their greenbacks ?

Wait a second i've been far to kind someone who puts faith in the executive providing growth, employment, and services over private enterprise. You are simple and needs to look at france ( which espouse the alternative Methode Francaise ).

by Me Fri Mar 24, 2006 13:36

But the wrong conclusion.

You are correct that digital exchanges were completed by the early-90s - that's still a decade after many other western countries. But the core point is that well into the late 90s Eircom was still gouging the market and charging (as I had to pay) 56c per minute to call Britain.

Competition arrived in the late 90s for phone calls.

You are incorrect to conclude that technology led to the 90 per cent fall in prices for calls - competition did. The fall in prices coincided exactly with the introduction of competition, seven or so years after the completion of the technology which allowed it.

So yes, you are right, technology allowed the prices to fall, but that fall only occurred when competition was introduced.

by SIPTU Fri Mar 24, 2006 17:29

These are quite good pieces from Daily Ireland that give the stance of the unions on this..also includes Socialist Party stance which seems pretty supportive of the union leadership at the moment anyway.

The covergave in the Irish media on this has been terrible. Since Padriag Yates has left the Times their industrial coverage has unashamedly gone on the sides of the bosses.

http://dailyireland.televisual.co.uk/home.tvt?_ticket=R...opp=1

http://dailyireland.televisual.co.uk/home.tvt?_ticket=R...opp=1

http://dailyireland.televisual.co.uk/home.tvt?_ticket=R...opp=1

by I_would_know Fri Mar 24, 2006 18:16

Here is a quote

“In time, Aer Lingus will disappear. The shamrock will be painted over and a national carrier that flies travellers direct from Ireland to major centres throughout Europe and north America will become a feeder airline to a hub such as Heathrow," Manifestly this is nonsense , it is ryanair that has really cranked up the amount of direct point to point travel. Did you know that after london , some city in poland has the most direct number of flights.Indeed it is does not matter if the shamrock sits on the plane or not.Boeing has bet its future on point to point air travel. What actually matters is that we have the most number of flights in and out of ireland. ryanair has done this hand over fist better than aer lingus!

"The justification for privatisation is going to be very difficult. And when it becomes clear that services, such as the transfer home of people’s remains, that Aer Lingus have provided over the years will be gone after privatisation" Put simply dead people are cargo, last i heard aer lingus was in the business of moving live people around. I think ups can cover this one !

"The Siptu document on Aer Lingus reads: “A once profitable state-owned utility [Telecom Éireann] has been transformed into today’s loss-making, underinvested debt-ridden private monopoly [eircom]." Maybe but again the customer has won with lower phone call rates. It is the staff who now have to work that little bit harder to justify their continued employment.

“An island like Ireland, dependent to an almost unique degree on air services for access to and from the rest of the world, has a need for a national airline with a wide remit.” However history has shown that wide remits and public ownership just don't go together. It's a pity but thats life! communism is nice in theory but shit in practice.

Apparently my government is the "southern government" and not the government of the republic of ireland. News to me !

“The pension issue is an important one for workers but really most people are worried about job security if the airline is sold off."Quite right, an unfortunate side effect of public ownership is that more people were taken on than appropriate. The airline will have to hugely increase its number of flights or sack lots of people. This has to happen anyway though and is not connected to privatisation. Put simply ryanair has a cheaper cost base and so could price aer lingus out of the market. Privatisation will give the company the flexibility to take the hard nosed business decisions which hopefully will allow it to grow and keep its staff and hire new staff!

“Trade union members have seen what happens to companies that are sold off to the private sector, like Irish Ferries, " Interestingly Ryanair pilots are paid a premium to work with them !

I'll let you make up your mind on how good these points are !

by phm Fri Mar 24, 2006 22:44

For decades aer lingus has been propped up or bailed out by the Irish taxpayer. The justification used be that it was necessary to maintain a state airline to ensure strategic links. With more than 35 airlines currently operating out of or into Ireland the small anachronistic flag-carrier is an irrelevancy for everyone except fat-cat business types who like to pay top-dollar to fly into heathrow.

The present 'healthy' state of the airline has nothing to do with long-term viability but is the afterglow from the most recent infusion of public funds and the failure to put aside receipts for investment in new aircraft. If this overmanned operation is still going to be airborn in five years time it will need upwards of one billion in new capital. The aer lingus 'workers' expect us suckers (aka other Irish workers with less well paid, less secure, and unpensionable jobs) to fork out their hard earned cash to featherbed their sinicures. Nuts! I say, if the venture capitalists want to throw their pearls at these swine, let them. Sorry guys, I can't afford to support these chronic ingrates, and if the price is the loss of a Fianna Fail seat in North Dublin, thats an added bonus.

By the way I do think that the government should keep the Heathrow slots and lease tham out to the private airline who bids the highest. This would be in the real interests of Ireland and its workers.

Commercial operations exist to deliver a service to their customers, not as a slush-fund for their employees.

Sell it off quick before it nosedives again.

by socialist Sat Mar 25, 2006 12:16

Aer Lingus is the property of the Irish people.
Other airlines are owned by private individuals but Aer Lingus is special because WE own it!
Our nation MUST have its own airline.
Our nation MUST have its own ships, trains, buses, power stations and electrical network, telecommunication companies, schools, hospitals, sewerage, pensions, social welfare and job security for all.
Why can't you see that if commercial enterprises are owned by the people that it benefits us all equally - the essence of effiicency.
Aer Lingus is in trouble because it cannot compete with a distorted market controlled by private airlines who are ripping customers off. Aer Lingus should instead be the sole company operating in Irish airspace - if it can maximise its profits and it can distribute it to all the people of Ireland equally.
Marxist economics may not make business sense to greedy capitalists but they are morally justified.

by i_would_know Sat Mar 25, 2006 14:53

It's that you are totally wrong. If state ownership is so important why is food provision (dunnes stores ,and the like ) not state owned.

Look it was tried before in russia! Unless the greed of man is funnelled to the benefit of others then it will be funnelled to the benifit of noone. Look at France which is a cross between full blown communism and our system , they have worse unemployment in the youth age bracket than we did in the eighties.

Tell me that ear lingus does a better job than ryanair of moving more people to more places for less money, i dare you!

As you will see written above the strategic interest is in having as many connections into ireland as possible ( it doesn't matter who provides those connections) You are deluded and totally idealistic. Thank god that for now our economy is run by people who are rational.

Are you going to tell me that we could have done better at job creation without the help of u.s. multinationals? Like people who believe in creationism and that the world is flat, you are entitled to your view. But that doesn't mean your view has any value. Your opinions fly in the face of mankinds entire recorded history ,and that makes you a clown , a fool , a loser, or a fucking gobshite . take you pick !

by Socialist Sat Mar 25, 2006 17:18

All humans are the same species therefore they are equal.
Because all humans are equal they each should have the same access to wealth as everyone else.
Marx identified this inequality and since then Marxists have been endevouring to overthrow the global profit system. Capitalists like you always bang on about the Soviet Union - but the Soviet Union was never a Marxist society so blaming Marxists for the crimes of Stalin are complete untruths.
You know that Im right because it is the basic human instinct to be co-operate and not to dominate eachother - it is the capitalist system controlled by the fat cats who have corrupted mankind - removed them and humanity will be perfected.
See?

by i_would_know Sat Mar 25, 2006 20:01

You have exactly supported my point . russia's attempt at communism failed because each individual own interest or greed was not funneled towards the benefit of the common good. An entrepreneur seeks to make profit for himself , however in doing so he creates jobs for lots of people in a more efficient way than a government , because he has an interest in being efficient : he will make more profit . Thus his own interests are funneled in a positive way towards increasing the common good.

thats why communism is and always will be a failure. As a company is state owned the only way for clever people to advance their own interest is through corruption ,which enevitably always sets in.

"All humans are the same species therefore they are equal." If carl marx made these remarks i would put it to you that he was a moron.This statement is completely flawed because it goes what nature teaches us. It is in direct contravention with Darwin theory of evolution, and is manifestly a joke. Humans are not equal and to suggest so , is so stupid as to be embarrassing . Some of us are women , some of us are better at maths, some of us are immume to aids , some of us have invented the wheel, so of us are as hot as kate moss, some of us can speak 11 languages , some of us can run a marathon, some of us can paint, some of us can creat the most beautifull melodies ever heard, some of us can survive thirty days underneath rubble following an earthquake. Human are completely and utterly unequal. The only thing that we can try to do is give every one a fair chance in life given their ability. This is what capitalism does and citizens of capitalist countries have the best quality of life by FAR. You are wrong . The world is round , communism and marxism are autistic , you need to think. You are entitled to your view, but it is wrong. no question

by jady Sat Mar 25, 2006 22:43 jady4evergp at hotmail dot com

I read this article with great interest and having only recently discovered this site I was overjoyed to find one claiming to accept all views and political opinions. So here I present you with a fresh vision of this pressing issue, a dissentist one.

This article is quite comprehensive but only on the side of the arguement which it represents. No mention is made off the enormous inefficiency and corruption that is continually evident in many state/semi-state bodies. This wastes tax-payers money, money which I need hardly point out is desperately needed in other areas. Moreover what is wrong with turning state run monsters into effiecient profit making bodies? This profit can be redistrubuted into the local community furthering growth and leading to a general growth in living standards. Surely no one can find fault with bettering our society through hard work and honest business? Something too often missing in state bodies.

Competition and independent industry are good for the nation and for the people. They help lower prices and provide jobs. This is a FACT.

A Dissent, jady.

by V C. Sun Mar 26, 2006 01:58

"As a company is state owned the only way for clever people to advance their own interest is through corruption ,which enevitably always sets in."

OK Doc I would Know, I may be simple but I'm afraid that even I will have to admit that this is not a financial decision and must be a political one.

We all agree that there is no financial rationale for the sale of aer lingus - so the rationale must be politics. The political ideology that you and phm and Me and the government parties and most of the media and economists and pundits subscribe to and that jady so wittily describes as the dissentist view.

Because this is an ideology, facts have nothing to do with it. We can discuss a profitable company, hailed as the star performer over the last 5 years amongst Europes (mostly now privatised) flag carriers, and insist that all of it's ills are because it is state owned. We can claim a workforce that has halved is an example of overmanning and cushy practices gone wild, that despite the profits and huge productivity increases will be driven to the wall by the inherent inefficiencies of state ownership.

This slash and burn ideology can claim that the lack of broadband infrastructure is a good result from one privatisation and that the best result of this privatisation will be the death of our national carrier as this will allow new, leaner, hungrier entrants to the market and please the great god competition. The logical conclusion of this position - that we should force the closure of the largest players in the irish airline business somehow escapes you.

I am reminded of a situationist saying
Theory is when you have ideas, ideology is when ideas have you
eeekkk - forget the inner investor. I was trying to see the logic of capitalism, trying to use the criteria we are told are everything, to see what was the best course. It didn't matter - the course has already been chosen by blind ideology. There are no reasons - just faith, ideology and slogans. At least socialist could put his slogans to music and sell some revolution to the kids.

I think Mick Halpenny is making the same mistake in SIPTU. He's put a completely rational, convincing case together for the establishment of a state investment body that would own and invest in the semi state companies, that would protect and get a return on the existing investments while providing opportunities for the state pension fund to be invested in the infrastructure that we need so badly in this country instead of where the worlds fund managers say the money should go. But all this work seems to have hit the brick wall of ideology, regardless of the facts and the desires of the Irish people.

When I asked in the article about who was paying off Dermot Mannion, I didn't realise that the consensus here was that the only way for Dermot mannion or Willie Walsh or Brendan Drumm or any of the other people who the political classes choose to work for us to really show their cleverness was through corruption. But I would now propose that it's not really Dermo's fault he's corrupt. His particular brand of corruption is just far too popular with those who tell us, from the vantage of their shrill and damaging ideology, what we should really believe or else we just don't understand the way their world works.

eeekkk, pass the lentils.

by The Rev. Malthus Sun Mar 26, 2006 13:57

You just don't understand the way the world works.
Aer Lingus as a State Company belongs to the many - to the swinish multitude - whereas we all know that wealth should by right be concentrated in the hands of the CHOSEN FEW.
The banquet table of life is not spread for everyone.
Into the coffin ship with the Irish peasants.
Haven't you learned anything at all from ypur pratie-hoking history ?

Look how magnificently Russia has manged this process of transferring all its wealth to where it rightly belongs - INTO THE HANDS OF A FEW CHOSEN UNACCOUNTABLE MEGA-WEALTHY OLIGARCHS !

Why do you fools want to stand in the way of the great march of progress.
RESISTANCE IS FUTILE !
CAPITAL HAS CONQUERED THE WORLD AND SUBJECTED ALL NATIONS TO HER GLOBAL HEGEMONY !
IRELAND IS NOW MORE FULLY SUBJECTED THAN SHE WAS IN 1916.

by i_would_know Sun Mar 26, 2006 19:32

In the narrow point of keeping or selling ear lingus , it's as much in a muchness. In the overall gain to ireland , it is enormously important.
As pointed out by jady , efficient companies produce the most for the cheapest so that the rest of the country has more money to spend on other things .

You continue stubbornly to hold to ideas you would learn in day one of an economics degree.

I repeat again for you: a private ear lingus will triple/quadruple the number of flights in provides. A public ear lingus won't ,doesnt and hasn't. We don't agree at all. You narrative attempts to give your ideas a rational economics basis , but they a flawed from the start. You have to take the entire effect into account. dermot mannion seems corrupt because you are looking at the situation through a kaleidoscope.

To Rev malthus with the BIG CAPITAL LETTERS, given that in 1916 two of my great grand parents were labourer potato pickers, i have got to tell you that my rather nice pay check doesn't make me feel that subjected. But i respect that uber nationalist point of view. It has really worked a charm in france , where they are petrified of the polish plumber!

Give this thing some thought.