Royal Mail faces prolonged agony

[Geezer]

http://www.ft.com/cms/s/0/7d88273c-b763 ... ab49a.html

By Brian Groom

Published: October 12 2009 20:28 | Last updated: October 12 2009 20:28

Industrial militancy tends to be suppressed by recessions: in the first half of this year, days lost through strikes ran close to record lows. But there are startling exceptions. The 1984-85 miners’ strike took place at the peak of postwar unemployment. Now postal workers threaten strikes as joblessness heads towards 3m.

The common factor is that workers in publicly owned industries in structural decline often think they can resist their fate. It happened too in the steel, shipbuilding and auto sectors. The Communication Workers Union wants to protect jobs, pay and working conditions, but its action may accelerate Royal Mail’s decline.


Workers are not the only ones responsible for Royal Mail’s state. Management must bear some responsibility for its poor industrial relations. But a lot of the blame falls also to short-sighted politicians. In the 1990s Royal Mail made healthy profits, but much of these were siphoned off by the Treasury in “special dividends” instead of being invested in new technology, leaving the operator 40 per cent less efficient than its rivals on the continent. More recently, deregulation was introduced faster than in the rest of Europe, giving Royal Mail less time to prepare.

In June, the government shelved a plan to sell a 30 per cent stake, remove the pension deficit and reform regulation – ostensibly because of a lack of bidders, but also because of opposition from Labour backbenchers. A Conservative government would have fewer impediments to privatisation. It is a brave investor, though, that will take a stake in a company that makes just £49m pre-tax profit on revenues of £9.6bn, is losing business to e-mail and private competitors and has some of the worst industrial relations in Europe.

[britwrit]

Actually, that's nonsense. The great depression saw huge gains by workers in France and the USA, with pretty much every major American union either being created or vaulting to national power during that decade. And ok, I wasn't here but weren't unions pretty powerful during the doldrums of the 1970s?

[baldrick]

And where does he get a figure of "just £49m pre-tax profit" from?
Royal Mail made £321m profit last year.

[pickaname]

£49m is the profit from RM letters, not RM Group as a whole.

£10m has been gobbled up in management bonuses though.

[DirtyHarry]

Same old, same old. Who on earth buys a repetitive rag like Financial Whines, for goodness sakes?