The most extraordinary aspect of the TEAM Aer Lingus saga is that, after months of talking, the Government and Aer Lingus management appeared to be taken so much by surprise by the decision of so many of the employees to reject the £54.6 million offer to buy out their letters of guaranteed employment with the parent group.
Either the Government and management completely misjudged the mood of the employees, or the trade union leadership's negotiating stance did not fully reflect the mood on the ground. Now the players have about a month to sort it out. After that the Danish company FLS has indicated that it will finally pull out, if the way is not cleared for its purchase of the facility.
Perhaps the rejection should not have come as such a surprise. After all, those holding letters of guarantee are in a very strong position. From a purely tactical point of view, they know that they cannot lose. Either they get a large sum of money - and retain their jobs under FLS ownership - or they have documents which appear to guarantee them permanent and pensionable employment in the Aer Lingus group.
The extent of the rejection of the deal is striking. Most of the 616 employees who voted to accept the package were from the ranks of those not holding letters of guarantee - who can only gain from accepting the deal. Very few of those holding letters accepted the offer, indicating that mere clarification of various parts of the deal is unlikely to swing the balance.
The view from the other side of the table is somewhat different. For the Government, and for Aer Lingus management, the FLS offer is what could well be the last chance to offload what has been a millstone around Aer Lungus's neck and a major drain on the exchequer. It is also the best chance to underpin the future of the 1,500 jobs in a viable enterprise. If FLS walks away, other suitors are unlikely to be interested and TEAM will remain as a small loss-making aircraft maintenance subsidiary in an industry dominated by a number of giant players.
The decision by FLS to stick around for a while, rather than walking away completely - and its statement that it does not plan any redundancies - suggests that it is confident that TEAM can contribute to its operation. But the Danish company will not hang around forever - it has already made clear that it is looking at other opportunities elsewhere in Europe.
Moreover, its interest in TEAM does not mean that the operation is potentially profitable in itself. Rather, it suggests that TEAM could provide a useful part of an large international maintenance player.
As has been clearly outlined in recent weeks, the aircraft maintenance industry is rapidly consolidating and is increasingly dominated by a number of major international players. These large organisations can offer airlines a full maintenance service in a variety of locations and at a reasonable cost. TEAM, which lost £1.5 million last year and may just break even this year, in a buoyant market, cannot hope to generate the kind of profits needed to invest and make itself competitive as an independent entity.
A link with a major international player is thus the only way forward. Indeed, it should not be forgotten that FLS was the only interested party to emerge after a lengthy process by Aer Lingus management of seeking suitors around the world.
No other deal is on the table and the suggestion reported from some unions sources of an employee share option arrangement, with Aer Lingus retaining a majority stake, is simply not worth considering. Nor will FLS or any other player be interested in taking a minority stake in TEAM - after all, we have all seen in recent months the political pressure which the unions have put on the Government as shareholder.
The folly of offering the letters of guarantee back in 1990 is now threatening the sale. In the normal world of business the prospect of a group of workers receiving a large pay-out - twice as much as the price being offered for the company - and still holding on to their jobs is unheard of. Yet the letters were given and this is the situation with which the Government and Aer Lingus management must deal.
Fortunately, offering yet more of what is effectively taxpayers' money to the employees is not on the table. Yet the extent of the rejection by employees means there is no clear way forward. There is now a risk that the problems will not be sorted out, FLS will walk away and Aer Lingus will be left holding a loss-making subsidiary. This would pose a grave financial threat to the group and seriously hinder the airline's own search for a strategic alliance partner.
