Issue 2 - 2024 200dpi

13 January 2000 Edition

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Workers in struggle

White knights spell trouble for Irish economy

Will British Telecom recognise unions at ESAT?


Under O'Brien's leadership, ESAT refused to recognise trade unions
The smiling face of Denis O'Brien, chairperson and chief executive of ESAT Telecom, beamed out of newspapers and television screens this week. O'Brien had agreed to the sale of ESAT to British Telecom for nearly £2 billion. ESAT has a presence in the 26-County mobile phone, fixed line and internet markets.

Denis O'Brien himself stands to earn over £230 million from his shares in ESAT. He told the media that he didn't know what he would do with the money but that he would be ``having a bit of craic''. The sale of ESAT didn't come as a surprise; the corporate sharks have been circling the company for some time and O'Brien's real concern was to maximise his takings on any sale.

Therefore we are told that British Telecom was a white knight. However, it seems the only real difference between British Telecom (BT) owning ESAT and Telenor is that BT was prepared to pay $100 a share compared to $85 a share from Telenor.


So what did ESAT do that makes them worth £2 billion? Did they invent mobile phones? Did they invent GSM technology? Did they start the mobile phone business in Ireland? The answer to all these questions is no.

ESAT and Denis O'Brien were in the right place at the right time. The EU had deemed in the early 1990s that there should be competition in the 26-County market place for phone services. In 1995, ESAT won the first commercial tender for providing mobile phone services in the 26 Counties.

They have used this very profitable foothold to get access to the fixed line market and now want to use EU directives on deregulation of the electricity market.

Will ESAT's power station be more environmentally friendly than any ESB stations? Will they use alternative energy sources? No again, as O'Brien's only rationale is the profits he believes he will get from entering this market.


There has been little comment in the media coverage of the ESAT sale that under O'Brien's leadership ESAT refused to recognise trade unions. Will this change now that British Telecom are owners of the company?

There are no guarantees that the anti-union policy will change at the company. Part of the reason for this is that the Dublin government, which gave ESAT the right to operate in Irish phone markets, did so with few conditions. The failure of ESAT to recognise unions has been ignored at an official level.

The same attitudes and mentally were at work when ESAT were let into the Irish phone market. Surely a windfall clause should have been inserted into the ESAT licences that if the company was sold off the Dublin government would get a share of the profits. A big slice of the £2 billion payout would build a lot of hospitals and new houses. It could pay for school books and extra teachers. It could be invested in helping the unemployed get education and training qualifications that would really matter.

However, this didn't happen. Instead, we have to comfort ourselves with the sort of sentiments expressed by the Irish Times, who told us this week that the BT buyout of ESAT will ``usher in a new era of competition''. They are not alone in supporting the belief that more competition means lower prices for consumers and this is the best thing any market can offer us.


The real question of the BT takeover of ESAT that needs to be asked is whether this is the future we want, where companies are bigger than countries? An example of this is the $335 billion merger this week between Time Warner and America Online (AOL), resulting in the world's largest media company.

Do we want a situation where ever greater amounts of resources and wealth are controlled by a smaller and smaller group of people? For example, this year's UN Human Development Report found that the top three billionaires in the world have assets greater than the combined GNP of all least developed states and their 600 million citizens. Meanwhile, profits grow and the wealth of transnational companies is continually amassed, as is the amount of economic power wielded by transnational companies.

These transnationals exercise this power in their own interests, influencing policy makers, changing legislation and getting governments to subsidise their operations. There are around the world today over 250 agencies like the IDA that subsidise the activities of transnational companies on the promise of new jobs in their economies.


The transnational companies pit their workers against each other, telling them they have to be competitive and flexible while their profits grow. The larger the business, the more unaccountable they become.

Friday 14 January is the start of open season on Eircom, as it now goes on the open market. Up until now, international takeover of the company has been prohibited.

It is highly likely that before the end of the year Eircom will, like ESAT, be part of a larger transnational concern. It will probably be followed by the ESB and Aer Lingus into international hands.

There will then be no guarantees that these companies will be run with the needs of the Irish economy as a whole in mind, even though they control resources vital to the wellbeing of the whole economy. As usual, the Dublin government seems oblivious to these important issues as the huge cash windfalls for more Denis O'Briens continue.

Does Ireland need General Motors back?


The workers agreed concession after concession to General Motors management. The end result was that they lost their jobs and Packard Electric closed
Just a few years after the closure of Packard Electric and General Motors is back in the 26 Counties. In the early 1990s, General Motors put their workforce at Packard Electric through the mill, continually asking them to be more productive, more flexible and ultimately to work for less money.

In order to keep their jobs and meet the demands of being in a so-called internationally competitive business, the workers made concession after concession to General Motors management. The end result was that they lost their jobs and Packard Electric closed.

Now, another subsidiary of General Motors is coming to Mullingar, with the promise of 200 jobs. Mary Harney has welcomed the project, even though many of her constituents lost their jobs after the last GM sojourn in the 26 Counties.

Commercial Mortgage Corporation is a financial services company with offices in the USA Canada, Tokyo, Paris and now Mullingar. An Phoblacht contacted the IDA and asked them what would be different about GM this time around.

Spokesperson Colm Donlon said that the IDA was ``absolutely delighted'' about the GM announcement and that the new jobs were a ``very different operation'' from Packard. These were ``high value, high quality'' jobs that the IDA expected to last.

There are no guarantees with any transnational company and the people of Mullingar are probably looking forward to the jobs, but so once did the people of Tallaght. Time will tell if GM has changed its spots.

An Phoblacht
44 Parnell Sq.
Dublin 1