Pires de Lima cornered over TAP layoffs

Portugal's Minister for the Economy Pires de Lima said he has not discussed layoffs at TAP, after the politically disastrous and expensive ten day strike by pilots, but awaits with interest the downsizing plan to be presented by the president of the airline, Fernando Pinto.

Pires de Lima was questioned by journalists at the commemoration of the 80th Anniversary of the International Chamber of Commerce over how downsizing could be achieved with zero job losses.

Will there be redundancies? "We will wait for the administration's plan, and what is needed to preserve cash within TAP," replied the Minister, adding that he did not discuss layoffs when he called for a readjustment plan for TAP and now awaits the presentation of a cost containment plan and a business plan to be presented by management.

"I have not spoken of redundancies. This strike, despite not having been successful, cost TAP €35 million, so we asked the administration of TAP to present us a cost containment plan and a business plan to allow, with this deficit of €35 million, the company to maintain its activity and not affect the lives of workers," said Pires de Lima who was unable to explain how a downsizing of the airline and a ‘readjustment plan’ can be achieved without sacking anyone.

The minister said that "this effort had to be asked for, because TAP already was in a very tight financial situation and is now on a knife edge in terms of liquidity ... with this extra cost of €35 million, caused by the ten day strike by some pilots.”

When asked again about the possibility of redundancies at TAP, Pires de Lima said: "We will wait for the administration's plan."

Pires de Lima did say that actions of the Union of Civil Aviation Pilots was "truly regrettable" especially as TAP was in a delicate cash position which has been made worse by €35 million, adding that the union has been “playing with fire."

During his speech at the conference, the Minister of the Economy said that in the coming weeks there will be more news about international investors in Portugal but confirmed that he was not talking about potential buyers for TAP.

TAP bids must be in by the end of this week and bets now are mounting that the government will pull the sale.

The airline is in a mess and owes over €1 billion, the government has never really wanted to sell it, offer prices for the business will be at the laughable end of the scale, the union’s key demand has been badly mishandled by management and the Economy Minister and Pires de Lima’s current bellicose attitude attempts to hide his own involvement and incompetence which helped ensure the last strike went ahead.

Prime Minister, Pedro Passos Coelho, said after a speech today in Lisbon, that the privatisation of TAP is important for the company and for Portugal, regardless of the amount, adding that the motivation of the government is to save the company and to stop supporting it with more cash.

"TAP can not continue as it is," according the the PM who fails to note that the well-remunerated president of TAP was brought in to avoid just this sort of situation.

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