Privatisation

[LinChong]

There has been a long term plan to privatise Royal Mail because the better pay, conditions and pensions in the public sector are regarded by our rulers as a reward that should only be bestowed on people who are prepared to oppress others on behalf of the state e.g. teachers, police etc. Posties are popular and highly respected in this country because they don't try and tell you how to live your life and oppress you, they just give you your post. People who make their money persuading people to believe lies and buy crap are jealous of those who don't have to do this.

To privatise Royal Mail, the government needed to take on the pension liability. EU rules would only allow this if the company was in the shite so they put the company in the shite by making legislation that resulted in a 13 year break from paying into the pension fund and by making legislation to take away profits. Then they liberalised the postal market before modernisation and forced Royal Mail to subsidise the competition. When the company was well and truly in the shite, they applied for permission from the EU to give Royal Mail state aid by taking on the pension liability. The EU would not let the UK government take on the full liability and that is why Royal Mail are trying to cut the pensions now in a desperate bid to make Royal Mail attractive to a buyer. However, who is going to invest in a company that has another 5 years at least to complete modernisation and still has a heavy pension liability?

It will be Railtrack all over again. The shares will be worthless.

[borders]

exactly right, this whole episode has been engineered. RM has not suddenly and mysteriously found itself in this position.
at present we have a crisis of capitalism. the Capitalists are sitting on hundreds of billions of dollars that they have accumulated over the years but they will presently not re-invest. therefore at the moment , as I have said in another post , other services historically controlled by government offer a place where exploitation of workers can generate real profits. this is ideologically driven and the capitalists are taking advantage of austerity to raid the public sector, searching for opportunities to exploit labour and make profits.
the debate should be about creating a worthwhile society whereby the vast majority of people can partake in it , which means a balance between pay and the cost of living etc . the balance between the amounts of profit made and the amounts of tax paid but at the moment all we see is Unregulated Capitalism and the profit before people culture that is undermining this.

[Brain Fury]

It would be impossible to privatise the company by IPO if it was making a loss. Who is going to buy shares in a loss making company? The Govt. might be able to sell RM to a competitor to pick the bits they need and scrap the rest (that could still happen) or sell a majority share to an investment company who would do all the things you're concerned about and sell it on for a profit. There's no doubt that the balance sheet has been sweetened to make the business more attractive to potential investors but IMO it would be wrong to believe that one year's half decent profits means that we are in good shape as a business. I think the long term future for RM is going to be difficult whether it's privatised or not. My opinion is that under Government ownership the business is condemned to a slow death while privatisation by IPO offers half a chance.

I don't know your reasons for wanting RM to continue to be owned by the Govt. It may be that you hold a principled view that RM should be a public service. I respect that view although I believe that ship has long since sailed. But if I am honest, no I don't think some people on here are being objective. They want the outcome that they believe is best for them. I absolutely accept that too. I just think they are wrong to think that this lies in staying under Government ownership and I have tried to understand why this is and how they think it would work successfully. In my view, all the things you fear in privatisation will still happen under Government ownership. The Govt. clearly doesn't want to own RM yet some want to force them to abandon their plans for an IPO as if that would be the end of the matter. I think the IPO is the least worst option given the position RM is in now.

One question I have always wondered is whether anybody knows of a Govt. owned company that competes with the private sector? I genuinely can't think of one but perhaps I am missing the blindingly obvious. Does anybody seriously believe RM can continue in this position? Doesn't it put the Govt. in the position of competing with the very companies they are supposed to be supporting?

I don't even remember saying I was a manager although I guess that was pretty obvious. For the record I am not a DOM or what I would call a senior manager.

To be fair, I didn't say nor mean that an IPO would occur if the company was losing money.
Only that I could understand the need for privatisation under those circumstances.

If remaining in Govt hands results in a slow death, then I would prefer that quite frankly (though I don't think it would), I'd rather have a secure job for 10 or 15 years whilst it is dying rather than the quicker death I and many others believe will happen if privatisation occurs.

I do believe that RM should be about a public service, and not profit, though there is no reason why both can't be achieved. I know we are not as vital as say Water, but to some we are viewed that way, and we are generally more trusted by the public than any other company in our market.

I would agree that some of our fears may very well occur, irrelevant of ownership. Though I feel some of these things would be far more difficult to achieve whilst still Government owned.

There is also the point that an IPO will not actually stop the company being bought by one of these hedge funds or whatever, there is nothing to stop them buying up as many shares as they like. Don't know the rules on an IPO, but even if share purchases are limited by number for each recipient (i.e. each buyer has a maximum that they can buy at the IPO - which I don't think is the case), there is nothing to stop someone like CVC slowly buying shares up and getting a majority ownership. It would take time, but still not overly long in all reality.

I do believe that RM can compete with these other companies. We have been, and are still, handicapped by varying things. If the playing field was made a bit more level, then why not? There is plenty that they COULD do, but they seem to miss opportunities when they arise. A classic example is the 9AM Special Delivery service, great for residential customers who want it before work (kind of), but what about businesses? The majority start at 9am to find a F/L waiting for them. Other companies (I think TNT being one though not sure) offer a 10.30 signature, but RM doesn't. Why? They never think things through all the way.

In all honesty, I do believe that most posties are against privatisation for purely selfish reasons, but there's nothing wrong with that. If we don't look out for ourselves and each other, no one else will. We need jobs, and fear of them being severely slashed and/or wages charging down to national minimum levels will give us the drive to fight.

If it really is the answer, why aren't RM being more forthcoming with info?
Tell us the real reason behind it.
Offer us the guarantees we want to hear. Put in writing pay/T&C's etc. etc. will not be changed for existing employees. But they won't. They only offer a 3 year deal, which would seem to suggest they are already planning to attack jobs/pay and the likes and their only intent is to hold off any industrial unrest until such time as they have sold the lot off, after which it will be open season.

Some good points UG (edit: didn't mean that to sound patronising). The slow death timescale is about what I had in mind too - I'll be long gone by then which is why I don't have a particular axe to grind about the impact of either path on me personally.I'm not sure what else you want RM to tell you about the "real reasons" for privatisation. They are effectively described in the Hooper reports. Whether you believe them or not - nobody is going to turn round and admit a different agenda at this stage.

Personally I've said before that I absolutely believe that there is an element of dogma to the planned privatisation and one of the reasons I support an IPO is that I don't trust the Govt. not to be especially vindictive if their plans for an IPO are frustrated. I think it's pie in the sky to think that any company is going to give a permanent guarantee not to change the T&Cs for existing staff or even for the 10 years that I think the CWU is seeking simply because RM cannot control the economic or market conditions in which it operates. Realistically I think it might be possible to negotiate the deal up to 5 years but not any more than that.

[Brain Fury]

There has been a long term plan to privatise Royal Mail because the better pay, conditions and pensions in the public sector are regarded by our rulers as a reward that should only be bestowed on people who are prepared to oppress others on behalf of the state e.g. teachers, police etc. Posties are popular and highly respected in this country because they don't try and tell you how to live your life and oppress you, they just give you your post. People who make their money persuading people to believe lies and buy crap are jealous of those who don't have to do this.

To privatise Royal Mail, the government needed to take on the pension liability. EU rules would only allow this if the company was in the shite so they put the company in the shite by making legislation that resulted in a 13 year break from paying into the pension fund and by making legislation to take away profits. Then they liberalised the postal market before modernisation and forced Royal Mail to subsidise the competition. When the company was well and truly in the shite, they applied for permission from the EU to give Royal Mail state aid by taking on the pension liability. The EU would not let the UK government take on the full liability and that is why Royal Mail are trying to cut the pensions now in a desperate bid to make Royal Mail attractive to a buyer. However, who is going to invest in a company that has another 5 years at least to complete modernisation and still has a heavy pension liability?

It will be Railtrack all over again. The shares will be worthless.

I'd love to see you doing a jigsaw puzzle. Do you use a hammer?

[biscuit1957]

Royal Mail Ltd is to change its name when Privatised to Royal Mail PLC, could have been worse, like consignior