Royal Mail's losses are worsening and the union should start talks

[TrueBlueTerrier]

https://www.theguardian.com/business/ni ... on-to-acas

Fat cat bosses holding workers to ransom? Yes, you can understand why the Communication Workers Union is screaming blue murder. Royal Mail’s threat of 10,000 job losses is one way to harden minds during an industrial dispute over pay and working practices.

But the CWU’s leaders would be wise to reflect on a few financial realities. First, Royal Mail is definitely in a deep and deepening financial hole. It has been bizarre in recent weeks to hear Dave Ward, the general secretary of the union, question Royal Mail’s claim to be losing £1m a day. Quoted companies do not pluck numbers out of thin air in their stock market statements, or not usually. In fact, Friday’s statement showed the position to be even worse: the six-month loss was £219m.

That figure, plus a projected loss of £350m for the full year, may feel unreal because Royal Mail made operating profits of £416m within a group-wide outcome of £758m last year. But the massive downwards swing only underlines the size of the boost from lockdown and Covid last time. The underlying trend is still a fall in letter volumes, intense competition in parcels and a need to become more efficient on that parcel side in normal trading conditions.

Second, a major round of redundancies is not the most dramatic manoeuvre at the board’s disposal. A break-up of the parent group, called International Distribution Services since 10 days ago, would be. Royal Mail would be separated from GLS, the non-UK parcels business run out of Amsterdam and the bit that currently makes all the money. There is still a question of whether UK politicians would permit a break-up but, since it would be GLS that would be leaving, it’s not obvious that new national security powers could prevent it. Under a split, Royal Mail’s stability would look even shakier.

Third, the shareholders, including Czech billionaire Daniel Křetínský with a 22% stake, are not sentimental about Royal Mail and its 500 years of history. With the share price at 190p, down another 9% on Friday, they would probably applaud a break-up. At the moment, the £4bn-ish worth of GLS (on course for profits of €370m-€410m this year), is obscured by Royal Mail’s implied negative value. It is only economically rational for those same investors to insist on a “no cross-subsidy” rule until there is a prospect of Royal Mail making profits again.

None of which is to deny that the company’s pay offer in April of a basic 2%, plus a conditional 3.5%, was miserable when inflation is 10% and the group had paid a £400m special dividend to shareholders last year. Whether it was also intended to trigger a confrontation with the CWU doesn’t really matter at this stage. The practical question is how to get out of the mess.

Royal Mail workers can make up their own minds, but the advice here would be to get round to Acas, the conciliation service, and talk. If this dispute runs through Christmas, the numbers start to get extremely ugly.

[pinstripe]

Basically RM instigated the strike action, but we should be the ones to bend over and take the shafting.

[claystones]

How can a company losing so much money pay themselves dividends and bonuses

[hans solo]

The guardian business
f**k off the tabloids are near obsolete

[hans solo]

Niles pratley

[norris9]

You mean.....Royal Mail should put another offer on the table like they should have done months ago.

[Tman]

Things must look bad when even the sh*tty Grauniad comes out against the CWU.

[freespeech]

How can a company losing so much money pay themselves dividends and bonuses

Dividends and bonuses are paid in arrears and usually announced at the end of year market update. Recent dividends and bonuses were for performance in 21/22 when parcel volumes were higher. It's always been the same but highlighted more this year as the performance last year and current performance are opposites.

[Cedar_Room]

Things must look bad when even the sh*tty Grauniad comes out against the CWU.

Why? It’s about as credible as the S*n these days

[chrisj]

I can see the CWU going to ACAS very soon: because the reality they have been avoiding (hopefully avoiding not ignorant of will set in) and to absolve themselves of the wrath of their members when they cave in to most of Royal Mail demands.

People need to move from all these talk about shareholders and dividends given - it is now in the pat; the cure t reality for Royal Mail and the country at large is so much different from when we made loads of money because of Pandemic.

Moreover, why moan about people that invest their money and get returns - we all do it! These big investors are mostly running at a loss anyways; a lot would have bought at much higher prices than today's prices. Pension funds especially those of us in defined contribution pension depend on investments in the stock marker - real world!

[HairyHobbit]

Only 0.1% down from 2019. The figures are being manipulated to lie about the severity of the financial situation. End of thread.

[Frankie15]

How come it's been a million pound a day for weeks/months now??? Surely it should have risen? Just looks and sounds like a bullshit figure. I'm not saying there isn't financial losses but to be the same amount for a long period of time. Come on. The spoof train has stalled at that figure it seems.

[Slim2none]

^
and its the same million pounds that Rico was spouting about but then miraculously found in an accounting error just in time for the year end figures being released....or some such shite!

[k979aaa]

The losses are management payments ie Bonuses and shareholder dividends over £400 million pounds all the nice new electric vans they are not cheep and all the new uniforms you are wareing and also agency workers from June and hire vans at the sametime. We have not even factored in the bribes to keep managers from going on the sick from September to Christmas nor all the perks they get for going in day off covering strike days, If RM want talks instead of action maybe they should back off threating us all and our terms and conditions and talk about a proper pay rise without strings!

[hans solo]

I can see the CWU going to ACAS very soon: because the reality they have been avoiding (hopefully avoiding not ignorant of will set in) and to absolve themselves of the wrath of their members when they cave in to most of Royal Mail demands.

People need to move from all these talk about shareholders and dividends given - it is now in the pat; the cure t reality for Royal Mail and the country at large is so much different from when we made loads of money because of Pandemic.

Moreover, why moan about people that invest their money and get returns - we all do it! These big investors are mostly running at a loss anyways; a lot would have bought at much higher prices than today's prices. Pension funds especially those of us in defined contribution pension depend on investments in the stock marker - real world!

plank