Stop the privatisation of Royal Mail

[TrueBlueTerrier]

http://www.socialistworker.co.uk/art.php?id=21770" onclick="window.open(this.href);return false;

The government last week ramped up threats to privatise Royal Mail, but suggested that any sell-off would be accompanied by a share offer aimed at postal workers.

Ministers hope that by offering them a “John Lewis-style partnership” potential strikes can be avoided.

But postal workers reacted to the plans with anger.

“How will having a handful of shares benefit us when a chunk of our public service has been handed over to profiteering multinational firm?”, said Paul Garraway, a CWU union rep from Oxford.

“We are already facing job losses and an attack on our pensions.

“Privatisation will make matters worse. We need to start preparing for action.”

Attempts by the previous Labour government to sell-off Royal Mail were defeated as it became clear that both workers and the public vehemently opposed the plans.

Industrial action in defence of this vital public service would be extremely popular and force the government to back off.

© Socialist Worker (unless otherwise stated). You may republish if you include an active link to the original.

[fishtank]

Industrial action in defence of this vital public service would be extremely popular and force the government to back off.

Optimistic....and i'm being kind.

[mdm]

i hope they don't expect me to strike after the s**t deal they 'negotiated' for us! get used to it privatisation is coming!!

[andy2007]

So you're really willing to let privatisation happen, just to spite the CWU?!?!
Is that really wise?

[mdm]

So you're really willing to let privatisation happen, just to spite the CWU?!?!
Is that really wise?

just realistic!

[fishtank]

So you're really willing to let privatisation happen, just to spite the CWU?!?!
Is that really wise?

It's a big ask Andy.
Members have in my opinion 3 things to weigh up.

1. Is it a fight worth fighting?
2. Is it a fight we can win?
3. Can you trust the motives of Billy&Co.

Question 1 is easy.....questions 2 & 3..slightly more blurred.

[dvbuk55]

There are two sides to the privatisation issue:

Primarily Royal Mail is floundering. Even with the collusion of the CWU the plans for modernisation are half baked because it is a publicly owned company trying to be profitable whilst providing a service bound by rules over which it has no control and only a marginal input. Would privatisation help the industry to survive?, well in my opinion it would. TBH the swathing cuts and changes which a wholly private company would institute would override any outside influence other than profit and if you want an organisation to be profitable - it's all or nothing at all. Would it be a leveller above all else - yes it would. I feel that existing postal employees wouldn't like it but the politicos would be glad to get the monkey off its back.

Secondarily there is the pension issue. A long suffering sore that has been left to fester by both the politicians and the union which just grows and grows, whilst the financial support gets less and less. So how do you solve a problem like the pension? The immediate answer is you cannot in the short term. One thing you cannot do is ignore it as is happening at the present. Selling off the company at a giveaway price which doesn't raise any immediate cash but does fund the pension as it stands with an annual input which represents the buyers overall responsibility in perpetuity. That would solve the immediate problem but not the deficit - which IS a paper figure and not an actuality and which can be dealt with over time by an act of Parliament which resolves any annual shortfall brought about by higher than expected retirees.

[andy2007]

There are two sides to the privatisation issue:

Primarily Royal Mail is floundering. Even with the collusion of the CWU the plans for modernisation are half baked because it is a publicly owned company trying to be profitable whilst providing a service bound by rules over which it has no control and only a marginal input. Would privatisation help the industry to survive?, well in my opinion it would. TBH the swathing cuts and changes which a wholly private company would institute would override any outside influence other than profit and if you want an organisation to be profitable - it's all or nothing at all. Would it be a leveller above all else - yes it would. I feel that existing postal employees wouldn't like it but the politicos would be glad to get the monkey off its back.

Secondarily there is the pension issue. A long suffering sore that has been left to fester by both the politicians and the union which just grows and grows, whilst the financial support gets less and less. So how do you solve a problem like the pension? The immediate answer is you cannot in the short term. One thing you cannot do is ignore it as is happening at the present. Selling off the company at a giveaway price which doesn't raise any immediate cash but does fund the pension as it stands with an annual input which represents the buyers overall responsibility in perpetuity. That would solve the immediate problem but not the deficit - which IS a paper figure and not an actuality and which can be dealt with over time by an act of Parliament which resolves any annual shortfall brought about by higher than expected retirees.

Primarily Royal Mail is floundering. ?!?!? How on Earth did you come to that conclusion?
How much profit have we been making for the last few years?
Hundreds of Millions! How could that POSSIBLY be considered to be floundering?!?

[dvbuk55]

Primarily Royal Mail is floundering. ?!?!? How on Earth did you come to that conclusion?
How much profit have we been making for the last few years?
Hundreds of Millions! How could that POSSIBLY be considered to be floundering?!?

All the glisters is not gold - ostensibly Royal Mail cannot meet its financial responsiblities NOW including the pension and the repayment of the borrowed money for modernisation investment - so forget the golden goose - this agreement has been paid for with our own money, the hope for an increase in the D2D market is to generate MORE money - which is not going to pull them out of the crap but it may look more "salelable" to a potential buyer.

[fishtank]

Primarily Royal Mail is floundering. ?!?!? How on Earth did you come to that conclusion?
How much profit have we been making for the last few years?
Hundreds of Millions! How could that POSSIBLY be considered to be floundering?!?

All the glisters is not gold - ostensibly Royal Mail cannot meet its financial responsiblities NOW including the pension and the repayment of the borrowed money for modernisation investment - so forget the golden goose - this agreement has been paid for with our own money, the hope for an increase in the D2D market is to generate MORE money - which is not going to pull them out of the crap but it may look more "salelable" to a potential buyer.

Indeed dvb....have our own gloriuos leaders of men not been downdialing our expectations for the past 6 months for that very reason?
I'm sure i could quote dingo a dozen times over telling us just how technically bankrupt Royal Mail really is.

[andy2007]

And yet, if we're sold off. The Pension deficit will be miraculously cleared. Even though they won't get enough from the sale to cover it.

Let's face facts here: If the Government didn't step in to take over the deficit, and any future shortfalls from the Pension Scheme. No-one would even consider buying RM shares. So they're going to do exactly that. Allowing the Shareholders to pocket the dividends from hundreds of millions in profits, whilst landing the Taxpayers (including us!) with the costs of providing our Pensions.

But what if we aren't privatised?
Will the Government still take over responsibility for the Pensions deficit?
No, of course not! If there was any possibility of that happening, they wouldn't be able to blackmail us into accepting privatisation! Which is exactly what they've been trying to do, ever since the original Hooper Report. Who want's to bet that he won't be suggesting that we're privatised, while the Government takes over the Pensions deficit. But that it wouldn't be right for them to do that, if we weren't privatised?
Any takers?
No. I didn't think so!

[TrueBlueTerrier]

Primarily Royal Mail is floundering. ?!?!? How on Earth did you come to that conclusion?
How much profit have we been making for the last few years?
Hundreds of Millions! How could that POSSIBLY be considered to be floundering?!?

In plain English (well as plain as accounting can be) its the turn over and the profit that should be measured. The lower the profit as a percentage of the turn over the more exposed a company's bottom line is to fluctuations in the market and the more likely it is that it will run into a deficit.

So using Royal Mails own figures (just for the letters division)

Revenue £6,564m
Profit £121m
Margin 1.8%

1.8% is a very slim margin and leaves the business in quite an exposed position when it comes to volume fluctuations. A 2% drop would put RM into negative territory.

[andy2007]

Thanks. It makes sense now. Although I still wouldn't call that floundering. Considering the state of the Economy at the moment. After all: Margins can go up, as well as down. And how many other Companies are in the same position, or actually loosing money at the moment?

[dvbuk55]

Thanks. It makes sense now. Although I still wouldn't call that floundering. Considering the state of the Economy at the moment. After all: Margins can go up, as well as down. And how many other Companies are in the same position, or actually loosing money at the moment?

Believe it or not andy some companies would call it a day with such a parlous state of affairs thinking that it wasn't economically viable on such a narrow profit margin - it's pointless going into detail but one single factor is investment in new equipment without borrowing on such a small margin - who other than the government would lend you the money?

[POSTMAN]

I'm actually curious why anyone would pump 3£billion or whatever into a company that is working in a constantly falling market.

No amount of cuts would generate MORE than £3billion in the medium to long term.