Privatisation

[UnhappyGremlin]

O.k so where will any profits end up if we stay under Government ownership?

Either reinvested into the business or going to Government coffers.

If they are not reinvested in the business does it matter?

Of course it matters, the company needs to be in a healthy situation.

And you're saying that if privatised any profit will be taken out of the business as a dividend to shareholders (I assume that's who you mean by the chosen few)? Not might be, will be and not some of it, all of it? That all seems very definite. How can you be so sure?

Pretty much. That's what shareholders want. 'm sure they will reinvest some money, but the majority will go to shareholders. And with asset stripping, job cuts and price rises, a severely slashed service, there'll be more for them to line their pockets with. It's what's happened throughout the history of other privatised companies, why are you convinced that Royal Mail will be any different? As an example, take British Gas (Centrica?), in the last couple of years they announced record profits of about £0.5bn, then within a month or two put prices up, by up to 20%. Did that benefit the staff or customers? No, just the shareholders. Excessive profits are never enough, they always want more. And when the CEO delivers, they reward themselves/are rewarded with a giant pay rise.

If I were a shareholder (and of course I will be) I would want most of the profits invested in the business so that it grows and prospers and gives me a better chance of future dividends and the opportunity to sell my shares at a profit.

Privatisation is not a forgone conclusion, despite RM and the Government (and quite frankly, you) presenting it as such. So you may not be a shareholder, as you believe you will be. Hope that, if it is privatised, those shares keep you warm in the dole queue. Because plenty of us will end up there, including most managers.

[borders]

spot on reply Unhappy Gremlin, whatever way Mr Fury wants to dress it up , I think you have hit the nail on the head . this free shares malarkey is just a token few crumbs tossed onto the table . there will be a future price to pay , for us , for tomorrows posties and the customers......

[Brain Fury]

O.k so where will any profits end up if we stay under Government ownership?

Either reinvested into the business or going to Government coffers.

If they are not reinvested in the business does it matter?

Of course it matters, the company needs to be in a healthy situation.

And you're saying that if privatised any profit will be taken out of the business as a dividend to shareholders (I assume that's who you mean by the chosen few)? Not might be, will be and not some of it, all of it? That all seems very definite. How can you be so sure?

Pretty much. That's what shareholders want. 'm sure they will reinvest some money, but the majority will go to shareholders. And with asset stripping, job cuts and price rises, a severely slashed service, there'll be more for them to line their pockets with. It's what's happened throughout the history of other privatised companies, why are you convinced that Royal Mail will be any different? As an example, take British Gas (Centrica?), in the last couple of years they announced record profits of about £0.5bn, then within a month or two put prices up, by up to 20%. Did that benefit the staff or customers? No, just the shareholders. Excessive profits are never enough, they always want more. And when the CEO delivers, they reward themselves/are rewarded with a giant pay rise.

If I were a shareholder (and of course I will be) I would want most of the profits invested in the business so that it grows and prospers and gives me a better chance of future dividends and the opportunity to sell my shares at a profit.

Privatisation is not a forgone conclusion, despite RM and the Government (and quite frankly, you) presenting it as such. So you may not be a shareholder, as you believe you will be. Hope that, if it is privatised, those shares keep you warm in the dole queue. Because plenty of us will end up there, including most managers.

I meant does it matter where the profits go if they are not reinvested in the business - Government coffers or shareholders dividend - it will not directly benefit us.

You say that the majority of profits will be paid as dividends and they will be achieved by asset stripping, job cuts, price rises and service reductions. You present this as fact but it's just your opinion. Neither of us know what will happen but it suits your agenda just to present the negative. At a personal level I don't much care either way and so I feel I can be reasonably objective. I think privatisation is the best (although by no means certain) hope for a long term future for RM. I could only see a future for RM as a Government owned company if the monopoly was reinstated but that isn't going to happen is it?

[Brain Fury]

spot on reply Unhappy Gremlin, whatever way Mr Fury wants to dress it up , I think you have hit the nail on the head . this free shares malarkey is just a token few crumbs tossed onto the table . there will be a future price to pay , for us , for tomorrows posties and the customers......

The free shares are intended to give employees a stake in the success of the company. The idea is that employees are less likely to strike or obstruct moves to increase profitability if they have a direct interest in maintaining the share value. I don't know if that would work (I suspect not). The free shares is a bribe of sorts but it's a bit more than just a few "token crumbs" to buy acceptance of privatisation.

[eroader]

The Free shares are just a distraction (glass beads,brightly coloured blankets.A carrot)
Just to stop us from focusing on what comes next.

[Danelectro]

spot on reply Unhappy Gremlin, whatever way Mr Fury wants to dress it up , I think you have hit the nail on the head . this free shares malarkey is just a token few crumbs tossed onto the table . there will be a future price to pay , for us , for tomorrows posties and the customers......

The free shares are intended to give employees a stake in the success of the company. The idea is that employees are less likely to strike or obstruct moves to increase profitability if they have a direct interest in maintaining the share value. I don't know if that would work (I suspect not). The free shares is a bribe of sorts but it's a bit more than just a few "token crumbs" to buy acceptance of privatisation.

I think your trying to convince yourself more than anything else, its what some would call business or capitalist realism.

and to hammer home the point,it IS just a few token crumbs,last year we were due approx £1500 in colleague shares and were told they wouldnt be paid out because the Royal Mail was valued at zero,a year later its worth £3billion and hey presto they are using your colleague shares to give you shares in a privatised Royal Mail.Only through the eyes of business realism could anyone believe that its other than a few token crumbs.

[Brain Fury]

spot on reply Unhappy Gremlin, whatever way Mr Fury wants to dress it up , I think you have hit the nail on the head . this free shares malarkey is just a token few crumbs tossed onto the table . there will be a future price to pay , for us , for tomorrows posties and the customers......

The free shares are intended to give employees a stake in the success of the company. The idea is that employees are less likely to strike or obstruct moves to increase profitability if they have a direct interest in maintaining the share value. I don't know if that would work (I suspect not). The free shares is a bribe of sorts but it's a bit more than just a few "token crumbs" to buy acceptance of privatisation.

I think your trying to convince yourself more than anything else, its what some would call business or capitalist realism.

and to hammer home the point,it IS just a few token crumbs,last year we were due approx £1500 in colleague shares and were told they wouldnt be paid out because the Royal Mail was valued at zero,a year later its worth £3billion and hey presto they are using your colleague shares to give you shares in a privatised Royal Mail.Only through the eyes of business realism could anyone believe that its other than a few token crumbs.

Surely you have to see the difference between pretend Colleague Shares that were worth whatever RM said they were worth and real shares in the business where the market determines their value and RM has no say? It's a fallacy to try to connect the two. The point I was making is that I believe the share offer is intended to achieve more than simply to buy acceptance of privatisation. Not that I think it will work.

[UnhappyGremlin]

I meant does it matter where the profits go if they are not reinvested in the business - Government coffers or shareholders dividend - it will not directly benefit us.

You say that the majority of profits will be paid as dividends and they will be achieved by asset stripping, job cuts, price rises and service reductions. You present this as fact but it's just your opinion. Neither of us know what will happen but it suits your agenda just to present the negative. At a personal level I don't much care either way and so I feel I can be reasonably objective. I think privatisation is the best (although by no means certain) hope for a long term future for RM. I could only see a future for RM as a Government owned company if the monopoly was reinstated but that isn't going to happen is it?

It won't directly benefit us no. But it could directly affect us, when they make decisions to turn the screw to make more for the chosen few.

I present nothing as fact, it is my opinion, but an informed one based on history. It's happened in every other privatised firm, so why not in RM?
If I have an agenda, it is to preserve RM's status as Government owned, that's all. Hardly a devastating stand point.

Are you saying that the rest of us, especially myself, aren't being objective?

There is not one single example of a privatised company changing for the better in terms of staffing levels, pay, T&C's, working conditions, prices and improved service. They have all gone the other way, so it is fair to expect that will be the fate of Royal Mail. If privatised, I would love to be proven wrong, but it isn't going to happen that way. Sure, it might not (and probably won't) change much at all for the first 4 or 5 years, but after that, it will be an endless stream of cuts and price increases etc.

You know what, they might succeed in privatising the company, and it might be the best thing ever to happen. Trouble is, the employees are being asked to gamble their livelihoods on this, and I wouldn't put £1 on at 5/1, because it's my opinion that I'd never see that £1 again.

The company is doing well, it is successful, and doesn't NEED to be privatised. They WANT to privatise it, but won't tell us why. So we have no option but to speculate about why they are hell bent on this course.

In a way, I think if we were making huge losses every year, and it was going to be sold as a going concern, I'd be able to understand that, as the private sector would change it around faster, as they are ruthless. Still wouldn't be happy about it, but I'd understand the reasoning. I don't understand the reasoning behind the proposed privatisation of Royal Mail, predominantly as they have yet to tell us why they are doing it. That crap about outside investment is just that.

(As an aside, I do applaud you for stating the fact you are management, and you have every right to put your opinions on here).

[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.

[Shambles]

grins well said..Unhappy Gremlin

[barrowc]

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

The BBC?

Also, Royal Bank Of Scotland (majority stake), East Coast (the train operating company), Channel 4, National Savings (NS&I), Post Office Ltd

[TrueBlueTerrier]

I am against privatisation for 2 main reasons,

1. The selfish one - but then people and firms who buy shares in any company do that for selfish reasons as well.

2. I think in the very long term the privatisations of Royal Mail, Water Companies and Electrical Companies are going to be seen as a huge mistake and unless they have laws that they mean they can renationalise nearly overnight, not having these companies under Government control could exacerbate what may at the time be a dire enough problem anyway. I know its sounds melodramatic but that is my biggest fear over idealogical privatisation.

[Brain Fury]

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

The BBC?

Also, Royal Bank Of Scotland (majority stake), East Coast (the train operating company), Channel 4, National Savings (NS&I), Post Office Ltd

Thanks - as I said I missed some blindingly obvious examples although I'll have to have a think about how good they all are e.g. RBS will be privatised as soon as possible

[Brain Fury]

I am against privatisation for 2 main reasons,

1. The selfish one - but then people and firms who buy shares in any company do that for selfish reasons as well.

2. I think in the very long term the privatisations of Royal Mail, Water Companies and Electrical Companies are going to be seen as a huge mistake and unless they have laws that they mean they can renationalise nearly overnight, not having these companies under Government control could exacerbate what may at the time be a dire enough problem anyway. I know its sounds melodramatic but that is my biggest fear over idealogical privatisation.

Thanks TBT.

1. They absolutely do and I fully understand that why RM staff would be looking for the solution that is best for them. As I've said before I can't understand why so many people are so sure that Government ownership is going to provide that when the business and it's pension fund has already been virtually destroyed under that regime. Why wouldn't it simply continue down that path?

2. I think the privatisation of water is already a huge mistake and probably should be renationalised. I also think gas and electricity are essential public services and should either be nationalised industries or at least tightly regulated. I'm not so sure that RM falls into the same category though. I'm not convinced delivery of mail is an essential public service any more than the telephone service or even the internet is. What do you fear the ramifications of privatisation of RM to be?

[UnhappyGremlin]

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.