Loss-making SDS to close
29 July 2004
Management proposals to address chronic losses will lead to 270 voluntary job reductions, the sale of the existing SDS premises at Naas Road and the transfer of its central parcels hub to Portlaoise.
The radical overhaul of its parcels business is in addition to the objectives of the An Post Strategic Recovery Plan to restore financial stability to the company which reported operating losses of €43m for 2003.
An Post Chief Executive Donal Curtin said “Moving the central parcels hub to Portlaoise will help eliminate costly duplication and overlap and enable the Company to be more efficient and effective as it continues to provide its range of high quality courier and parcels processing.”
An Post employs a total of 450 workers, at six separate SDS sites, as well as 46 owner/driver operators. 180 staff will transfer to other positions within An Post. Voluntary severance or voluntary early retirement schemes will be available to surplus staff.
The decision to revamp SDS, which last year shed 114 jobs and saw the introduction of owner/driver operators, is part of ongoing management attempts to return An Post to financial stability.
EMS customers of SDS services will not be affected by the radical new approach to parcel handling but the Company will disengage from a range of loss making contract parcel services.
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The Company has developed redeployment and relocation options to deal with staff issues and will be having discussions, in a Partnership context, with its unions - including the Communications Workers Union which represents the majority of those affected.
Proposals approved by the Board of An Post envisage the completion, by the end of this year, of staff transfers and re-integration measures and the commencement of the revamped operations by February 2005.
SDS was set-up in 1989 to compete in the domestic and international parcel handling market. In recent years the SDS business model – due to high fixed costs and inflexibility - has suffered in the face of increasingly intensive price competition resulting in a loss of market share, and falling volumes.
Mr Curtin said “Despite enormous efforts to turn around the situation at SDS, volume losses and market trends have made this decision absolutely inevitable.
“Losses at SDS have been a serious drain on the financial resources of An Post. This action will ultimately be of major benefit as we struggle to restore the business to profitability. Right now the decision is regrettable but unavoidable”.
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