Where's the news coverage : Royal Mail bosses threaten to declare insolvency as pay talks near collapse

[adamanti]

You would think that even the slightest mention of RM possibly going into administration would be all over the news. 115000 employee's, huge national company, major implications for businesses. Where's the noise? Starting to really think there may well be collusion in all of this. Pension's and savings.

https://www.theguardian.com/business/20 ... r-collapse

Royal Mail bosses threaten to declare insolvency as pay talks near collapse
Long-running talks between Royal Mail and the Communication Workers Union are on the brink of collapse, with the company’s board thought to have threatened to put the loss-making postal service – the regulated UK entity that delivers to every address in the country – into a form of administration if a deal cannot be agreed.

A politically explosive move to declare the postal service insolvent is regarded by Royal Mail’s board as a last resort but has been raised with the union already.

“We are aware of the speculation,” said a Royal Mail spokesperson. “If we have anything to add to our previous financial statements, we have an obligation to do so.”

Royal Mail is on course to make operating losses of £350m-£400m this year, its parent – the recently renamed International Distributions Systems (IDS) – has previously said.

After 18 strike days in 2022, talks reopened in the new year and the union paused industrial action, saying the company had made “significant moves” towards a potential settlement. Brendan Barber, a former general secretary of the TUC, was brought in as a facilitator for the talks.

But hopes of a deal have faded over the past week. Sticking points include not only pay but also changes to working practices, with the company arguing the two are interdependent.

“This dispute is truly at a crunch point,” the CWU’s official account tweeted last week. If talks do fail, the union’s national executive is due to meet in the next few days to consider more industrial action, for which a mandate was overwhelmingly secured in February.

It is thought the boards of Royal Mail and IDS still regard a negotiated settlement as the preferred way out of crisis, but a special administration under the Postal Act has been explored. This would mean declaring the business insolvent and unable to pay its dues, raising the possibility of more job losses among its 140,000 employees. Approval would be needed from the government.

It is thought that only the parts of Royal Mail that operate under the universal service obligation – the requirement to deliver to every address six days a week at a uniform price – would be involved. Some parts of the parcels operation, including Parcelforce, would not be affected.

Even a tentative threat of administration, however, could cause a political storm because Royal Mail, with the help of extra demand during the Covid pandemic, made operating profits of £416m as recently as the financial year that ended in March 2022.

It is unclear who the government could appoint as an administrator to run the postal service. The last major company put into special administration was Bulb, the failed energy supplier, which was sold to Octopus Energy at the end of last year.

Most City analysts ascribe a negative economic value to Royal Mail within the IDS’s stock market capitalisation of £2.2bn. The group also owns GLS, an Amsterdam-based international parcels business that is on course for adjusted operating profits of €370m to €410m this year.

The IDS chair, Keith Williams, raised the prospect of a breakup of the group last year and said in November: “The board reiterates that in the event of the lack of significant operational change in Royal Mail, it will look at all options to preserve value for the group including the possibility of separation of the two businesses.” Shares in IDS fell 4% on Monday.

A CWU spokesman said “It is clear Royal Mail Group are in a serious financial situation. This is as a direct result of mismanagement and recklessness at the most senior level of the company. Those individuals who have led the company into this crisis have no right to lead us out of it.

“The company as a whole now have a decision to make – do they reach an agreement with the union or do they continue their relentless and daily assault on postal workers in workplaces across the UK? There is no positive future for Royal Mail without the support of the workforce.”

[zz666]

Because there's no evidence of it.

[derekm]

spoke to a manager today who's a decent bloke and he said nothing has been mentioned of anything like the rumours going around the office. if a company this size was under any threat of administration then it would be all over the news

[freespeech]

spoke to a manager today who's a decent bloke and he said nothing has been mentioned of anything like the rumours going around the office. if a company this size was under any threat of administration then it would be all over the news

It's a CWU conspiracy so a crap deal looks better than no job/poor T&C's and administration.

[redlen]

Probably because at the Moment Royal Mail is trying to secure additional funding through the banks.

Any issue of a financial crisis will be included in its annual report released to the city next month and at its AGM.

At the moment there is no official crisis and just speculation from both Royal Mail and the CWU.
How much of that is simply propaganda and spin, who knows from both sides?

If an agreement cannot be reached by Wednesday with the CWU and with a lack of external funding, administration is a very real possibility with the government appointing an administrator and run Royal Mail as it cannot fail due to USO obligations as a going concern.

Nobody knows anything until the annual report is released as it could have a major impact On the share price if released premature.

[enskied]

You would think that even the slightest mention of RM possibly going into administration would be all over the news. 115000 employee's, huge national company, major implications for businesses. Where's the noise? Starting to really think there may well be collusion in all of this. Pension's and savings.

First batch of electoral mail in tomorrow.
See what news we make while that fails spectacularly.... Just the tracked remember guys.

[robking]

Because there isn't the slightest possibility of IDS going into administration, IDS owns Royal Mail.

[Kenfandango]

Because the interest rate fluctuations on the money RM borrowed for the "superhubs" is the real issue, and the BofE have already stated they'll go back down later in the year. Provided RM can prove that they can get their finances in a position where they can pay the money back, which is more likely in an environment where interest rates recede again, then administration isn't really on the cards

[yellowbelly]

Probably because at the Moment Royal Mail is trying to secure additional funding through the banks.

Any issue of a financial crisis will be included in its annual report released to the city next month and at its AGM.

At the moment there is no official crisis and just speculation from both Royal Mail and the CWU.
How much of that is simply propaganda and spin, who knows from both sides?

If an agreement cannot be reached by Wednesday with the CWU and with a lack of external funding, administration is a very real possibility with the government appointing an administrator and run Royal Mail as it cannot fail due to USO obligations as a going concern.

Nobody knows anything until the annual report is released as it could have a major impact On the share price if released premature.

You're right Len, some people just speculate and make up stuff.....

Have no doubt Royal Mail is being deliberately run down to be taken back into public ownership.

The problem I have is that Ofcom is the regulator and has been silent in all of this. They enforce the USO. Why did it take a Parliamentary inquiry to raise the issue?

[redlen]

Since when has stating personal opinion been making things up?


Some people it seems need a better understanding of the English Language, or is it Pit Bull Mentality people "get off" on?

[zz666]

It's opinion yes. With no evidence attached.

[redlen]

It's opinion yes. With no evidence attached.

And how can you reference personal opinions being subjective in nature?

[Shadedpostie]

You would think that even the slightest mention of RM possibly going into administration would be all over the news. 115000 employee's, huge national company, major implications for businesses. Where's the noise? Starting to really think there may well be collusion in all of this. Pension's and savings.

Because there is no one from the company outside the CWU that have said anything of the sorts. They are not going to report something unless it's directly from the horse's mouth being the board of directors, not the union bosses. More than likely will change depending out what comes out on these talks and not playing damn Chinese whispers with the shareholders. Nobody, I mean nobody knows anything outside this whole dispute.

[toonshola]

I just don’t think it’s credible. No doubt Royal Mail have raised the prospect of administration in the talks to try strong arm the union. I don’t think the union really believe it’s on the cards but have put the rumour out there because they know if/when they get an agreement it’s going to be a giant pile of turd. At least this way they can say the agreement isn’t perfect but hey at least the company hasn’t went under. Very cynical from both sides in my eyes but that’s where we are at.

[SpacePhoenix]

First batch of electoral mail in tomorrow.
See what news we make while that fails spectacularly.... Just the tracked remember guys.

Poll cards have already gone out locally, got mine last week