https://www.wsws.org/en/articles/2023/0 ... f-m26.html
IDS executives made clear that the company’s forecast return to profitability over the next 12 months—and into the future—is dependent on the ruthless exploitation of its global workforce focused on parcel delivery. This includes gutting the Universal Service Obligation on six-day letter delivery which Royal Mail workers and customers regard as a vital public service.
Company executives spoke with candour of the company’s reliance on the CWU, which they referred to as “our union”, to help transform Royal Mail along similar lines, to “drive greater efficiency” including “reduced headcount”, “flexibility in work patterns”, “seasonal variation in hours” and cuts to sick pay entitlements.
Williams, IDS non-executive chairman, said, “we’ve been at the crossroads for a considerable period, but things are now starting to move forward… Our agreement with the CWU includes a number of initiatives designed to help us improve, including removing sick absence and method change.” The former CEO of British Airways, Williams also chairs the Tory government’s Rail Review that is overseeing an historic assault on rail workers’ jobs, terms and conditions (with the collusion of rail unions the RMT and ASLEF), part of the Great British Railways re-privatisation agenda.
The financial impact of the CWU’s piecemeal industrial action on Royal Mail’s finances was estimated by IDS at £200 million—showing how the immense potential clout of postal workers was stymied by the union.iams cit Company executives made clear the sacrifice was worth it, pointing to future pay offs from their negotiators’ agreement with the CWU. In fact, the company has already cashed in, with Willing last November’s five-point stabilisation plan, “On rightsizing the business, for example, we said we’d target a reduction of 5,000 FTEs by the end of March, and in fact, we delivered around a 10,000 reduction on exit from the year earlier. Revisions have now been completed in all units.” All thanks to the CWU’s collusion.
While Ward and Furey have cited the threat of Royal Mail’s bankruptcy to bully workers into accepting the agreement, Williams’ presentation was comparatively upbeat, citing retained earnings of £3.8 billion and access to liquidity of £1.7 billion. He concluded, “Despite the impairment of assets at Royal Mail, the group balance sheets remain strong”. He cited “reasons to be optimistic with a plan that shows a return to profitability this year 23/24, and both companies in profit the year after.”
Royal Mail’s £1.1 billion loss was partially offset by stable GLS profits of €403 million (GLS is 70 percent larger profit-wise than three years ago) for a year-end Group loss of £748 million.
The overall message was clear: while Royal Mail has taken a hit, this is partly strategic, including capital investment into parcel modernisation of £1.4 billion over the past five years. Williams concluded, “The investment phase is now complete for Royal Mail, and so we need to focus on maximising the returns from those investments, including the two new Super Hubs. Our Northwest Super Hub opened in June last year, and next year we are opening our Midland Super Hub.” IDS’s deal with the CWU aims to “maximise return on investment”.
The Universal Service Obligation on six-day mail delivery (being flouted in practice) will be ditched. In reply to a question from JP Morgan about the UK carrier’s long-term profitability, Williams said, the “USO is not sustainable in its current form” and that “the union recognise that in the agreement. They want to work with us in putting forward what changes need to happen to the USO”. IDS Chief Financial Officer Mick Jeavons said the agreement “contemplates us working together” on a broader “modernisation” of the USO, including the “tracking on parcel services that consumers buy in the post office”.
IDS executives made clear that retention of Royal Mail was their preferred option, based on a deal with the union that delivers the company everything it wants. But should the agreement be rejected by workers, then “Group separation remains an option”. Williams told investors, “we will always represent the interests of shareholders”.
In their joint announcement, Royal Mail was treated like a fresh carcass, with investors and analysts watching on like vultures. Williams announced that Royal Mail “will be dependent on asset disposals” in the year ahead, including the sale of the four-acre Parcelforce site at Royal College Street Camden. When a Barclays analyst pressed for more information on “the magnitude of disposals”, Jeavons confirmed plans for widespread asset-stripping, “we’ve got a couple of sites in what is currently a very attractive part of London for developers”.
Any acceptance of the CWU’s claims that Royal Mail workers and the company share a “mutual interest” is a road to destruction. Ward and Furey say that if workers sacrifice now to save the company they will be repaid for their efforts down the line. This warmed-up Thatcherite trickle-down-economics is an insult to the working class.
Workers must act to defend their independent class interests. If Royal Mail faces collapse, then it must be nationalised under the democratic control of the working class, its major shareholders expropriated, and their wealth used to fund improved pay, terms and conditions and guaranteeing a healthy work-life balance for postal workers while protecting a service vital to millions of people.