Effects of Privatisation on Employees

[Budfrog]

What do others here believe will be the long term effect of privatisation, assuming it goes through, on employees. I know much depends on who actually gains control of the business and I think there will be a mixture of some positives and some negatives for staff.

I don't foresee that it will be all gloom and doom but in any event a post privatised business will be a different place to work and there will be some erosion of the Terms and Conditions that CWU and it's membership have fought for over many years.

What are the views of people here?

[RobertT]

The defined benefit pension scheme(final/average salary) is it's current form will go due to it's cost to the business, and be replaced with a far less generous defined contribution version. This will mean lower pension payouts and potentially longer working lives for everyone.

[123456]

having done some homework and asked this same question on another thread,it seems no-one knows..what COULD very well happen is; 1) new contract,sign it or bugger off..2)change of working hours..3)change to the working week..4)drastic cut in staff,frontline and management..5)seniority will be a dead duck,without question..6)more part time/casual transfer of staff from full time.7)quality nosedives..8)any problems with that,you know where the door is...many,many losers(not all though)..once stripped and handsome profits made it probably will be resold..then start again from 1..

[fishtank]

I think the changes will be gradual and erosive rather than instant and catastrophic.
MTSF will be targeted......Pay Protection,Sick Pay and allowances are all easier targets than basic pay.
Reducing basic pay will more likely be done gradually through poorer pay settlements than a change in contract.
Flexibility will be a key demand from the new owner both in job description and hours worked.
Performance will also be a key factor.
New starts will face low or zero hour contracts and will be moved from one work area to another with little notice.
These are some of the milder realistic changes we definitely will face.
The list isn't exhaustive.

[mandelsons_toenail]

We will get bikes to deliver mail from

[Budfrog]

I agree with Fishtank. The new owners will be looking for quick wins and targetting a heavily unionised frontline workforce is not the way to achieve this.

I believe the initial focus will be on reducing the indirect managerial headcount focusing on high salaried staff members who do not directly add value to the operation. OPGs may have better T&Cs than their counterparts in other postal carriers but in my opinion many of the managers/administration positions within RM receive salaries that are far better than elsewhere. Their union is also reasonably weak leaving members in a very vulnerable position.

[123456]

good points well made..but it depends on which kind of takeover is preferred,this to me is a very.very interesting point.IF its an ipo share option then the catalouge of changes we have mentioned could well be slower and stealth like..BUT if a private equity takeover is preferred then for me wait for the fireworks,these people make changes overnight.having a (sort of)strong union could well be a big help but look back at the takeover of the AA IN 2004.permira and cvc went and stuck the boot in straight away.the AA has long since ceased to be a motoring organisation...really hoping for some encouraging comments re; this privatisation...but i wont hold my breath.

[andy g]

think you will find there wasn't 100,000 plus trade union members in the AA !!!no wonder they did what they wanted!!
Put simply Labour must be told to make a statement NOW that in the event of Royal Mail being privatised it will be renationalised under a new labour governmentCVC would run away straight away !!NO compliance from labour now then full withdrawal of CWU funds to the labour party !Time this union got tough with labour it got us in this mess !!!!

[fishtank]

Put simply Labour must be told to make a statement NOW that in the event of Royal Mail being privatised it will be renationalised under a new labour government

Never happen.
Political suicide.
It doesn't matter if not one member of the public wants Royal Mail privatised if Labour start talking about nationalising private companies the press in this country will shred them.
Communist puppets controlled by dinosaur unions will be one of the milder headlines.
Not making a call on the rights and wrongs of it,just being honest.

[Gills_Postie]

think you will find there wasn't 100,000 plus trade union members in the AA !!!no wonder they did what they wanted!!
Put simply Labour must be told to make a statement NOW that in the event of Royal Mail being privatised it will be renationalised under a new labour governmentCVC would run away straight away !!NO compliance from labour now then full withdrawal of CWU funds to the labour party !Time this union got tough with labour it got us in this mess !!!!

This should happen but Labour are Tories in cheap suits, they couldn't give a fck about us.

[andy g]

Well Fishtank I kind of knew that,do wonder why we donate to the labour party?
CWU are certainly putting the pressure on that's for sure,doubts are emerging in Tory party as reported on this forum,do think the boycotting of DSA mail will bring the privatisation of Royal mail to a head !!
the public don't want it and we all remember the poll tax and what public opinion can do !!!!

[tomangoe]

I'm a bit confused about who runs the company if the option of an IPO is taken ? Say a private equity company takes over then obviously they will run the company.But, if shares are sold on the Stock market will it be 49% with the Government still owning 51% ? In which case nothing will really have changed. If all the shares are sold on the stock market then it will be the majority shareholder which could be us with 10% of the shares ! Any thoughts or have I got it totally wrong!

[Robbo318]

I'm a bit confused about who runs the company if the option of an IPO is taken ? Say a private equity company takes over then obviously they will run the company.But, if shares are sold on the Stock market will it be 49% with the Government still owning 51% ? In which case nothing will really have changed. If all the shares are sold on the stock market then it will be the majority shareholder which could be us with 10% of the shares ! Any thoughts or have I got it totally wrong!

Vince Cable says he doesnt know how much of the company will be floated if they take that route. Surely like you say thpugh, the Govt will have to be the main shareholder otherwise the company would be in chaos without a huge majority stakeholder to run the show?

Really the Cons should be looking for an outright buyer first, then a stock market floation should be the next option if a buyer cant be found. But these clowns haven't a clue.

My opinion is Royal Mail at worst will be floated with 39% shares available to be puchased. I don't think a an outright buyer can honestly be found, as this company is too complex to just be sold off

[123456]

more than one equity firm can buy,many big takeovers involve murky waters.2 or 3 could in effect buy in..but these type of companies are ruthless and would be more than a match for the CWU.this has got to be the last resort for us..maybe that buffoon mandlesons deal looks half decent in the grand scheme of things..i just know that many,many people will not no the difference or consequences.

[fishtank]

Surely like you say though, the Govt will have to be the main shareholder otherwise the company would be in chaos without a huge majority stakeholder to run the show?

In the event of an IPO a new board is usually appointed,some of the old...some new.
Major shareholders normally get a seat on the board with minor shareholders appointing/voting on a representative.
That board answers to the shareholders as a group,the primary function being to provide a return on the shareholders investment through a dividend.
The dividend is driven purely by profit.

Even if the Government holds onto a major stake it will not interfere in the running of the company or the shareholders right of return on their investment.
The Government takes no part in the day to day running of Royal Mail now even though it owns 100% of the company,After partial privatisation it would continue to be a silent partner and would look to offload its remaining stake at the earliest opportunity.