Hedge funds press RM for more savings as profits rise

[meweavy]

Hedge Funds more bloody parasites with privatisation the stench of a new kill will bring the vultures of capitalism!

[The_Wax_Man]

Here's a comment I wrote last week in reply to WCM :

^^ Actually it would not surprise me if a form of WCM much, much bigger than what we see at the moment will be placed into this business.

Be very sure that now we have shareholders, the companies very first task over any kind of monetry input into the company is to pay dividends and show profit.

To do this the company needs to show itself as a streamline enterprise with reduced unnecessary expenditure - year on year savings will be demanded whilst profit is extrapolated at every opportunity - WCM or a new form is certainly on the horizon. Changes do need to be made or the company cannot go forward - This is how they will implement them.

The next few years are all about cutting out the dead wood in RM - from both a staff, property assets and business practice point of view.

I say if you think things maybe tough now - you ain't seen nothing yet.

Actually in fairness I think todays news has come a bit early - but these hedge fund companies are ruthless - they have to be it's part of what they do.

They don't give a flying eff about what you or I do on a daily basis other than look at the baseline cost figures on input and output streams. If they don't see a balance then of course they will demand cuts etc.

WCM won't go away - the only way to change a company is by looking at how it operates - to do this you need a 'version' of WCM to report and create on best working practice - if anything, we will see a ramped up version of this coming to a DO,MC near you.

For the record the current WCM working methodology is skewed badly and needs to be scrapped in order for the correct processes to take place.

You saw it here first people. WCM ( version 2 ) coming soon.

[Danelectro]

cue Bob Gibson jumping off a double decker at EC1 waving a legally binding agreement on the stockmarket floor!f**k off! its the law!

[toomuchcoke]

Any more cuts to staff/duties in our office, and there will be no bugger able to go out and deliver anything.

Deliveries every other day?
Cancel Saturdays.
Cut pay, etc. etc.
Many options available to cut staffing costs.
Unfortunately.

Going to deliveries every other day would require half the number of delivery staff, that's well into compulsory redundancy territory which is unlikely to fly well publicity wise. It would also require amendments to the relevant act(s?) of parliament which I suspect would be politically unpalatable at the moment. (In theory they could use Labour's "Death of Democracy" Act (aka "Legislative and Regulatory Reform Act 2006") to bypass parliament and just do it, but again that's unlikely to be politically palatable.)

Cancelling Saturdays, means 1/6th of delivery staff are surplus to requirements. Again an amount that's probably not achievable through "natural wastage", and hence we're back into large negative PR. Also needs government approval, and so is almost equally politically unpalatable IMHO. Though give them 5-10 years and they might be able to pull this one off.

... but it's not like there aren't cost-cutting things the Royal Mail could do :-

• Electric vehicles - bit of a large upfront cost, but the lifetime cost of ownership is lower. (Plus you can get some good PR about the green-ness of it all.) Plus there's the possibility of getting some additional revenue from Vehicle-to-Grid (http://en.wikipedia.org/wiki/Vehicle_to_Grid).
• Buy a really large number of letter boxes (and probably get a decent discount from the manufacturers whilst you're at it), and install one for each rural property where the public highway ends. Saves money on fuel and vehicle repairs (and dealing with complaints from customers claiming we're driving too fast down their farm tracks!). Since some of those rural houses can be 10+ minutes of round-trip driving to/from the public highway this could save quite significant amounts of time. Said time to be filled with more address points obviously, but the reduced staffing requirement this generates could probably be covered through natural wastage. (Reduced number of vans required also reduces the amount of capital tied up that way.) Does kind of conflict with the move to being a parcels company, but it's not like every house gets parcels every day ...
• Adjust how distribution bring the mail to the non-mail centre based delivery offices. The one I work in gets two 7.5tonne trucks a day, or we could start later and maybe just get one larger truck instead? Again, there'll be a reduction in the numbers of staff needed this way but not one that can't be dealt with easily enough I'd expect.

[resperin]

Its called business as usual now not wcm ?

[Lincox]

They will follow Amazon, and start leaving parcels at local shops, supermarkets, train stations, you name it. I can foresee a reduction of 50% of delivery staff or more over a ten year period. Franchising/Owner Drivers will come in at some time in the not too distant future as well.

[pants123]

hedge funds human beings are really bad humans.. they care only for money,, their wealth and their life style...

what these human beings don't understand there only human like we all are...

THAT'S THE BIT THAT MAKES ME LAUGH.... there nothing to us all..

[UnhappyGremlin]

Going to deliveries every other day would require half the number of delivery staff, that's well into compulsory redundancy territory which is unlikely to fly well publicity wise. It would also require amendments to the relevant act(s?) of parliament which I suspect would be politically unpalatable at the moment. (In theory they could use Labour's "Death of Democracy" Act (aka "Legislative and Regulatory Reform Act 2006") to bypass parliament and just do it, but again that's unlikely to be politically palatable.)

Cancelling Saturdays, means 1/6th of delivery staff are surplus to requirements. Again an amount that's probably not achievable through "natural wastage", and hence we're back into large negative PR. Also needs government approval, and so is almost equally politically unpalatable IMHO. Though give them 5-10 years and they might be able to pull this one off.

I didn't mean overnight. Think it will be years, similar to the current plan of 'modernisation'. And would likely have to wait until letters mail levels drop quite considerably, and the company could argue for a reduction in the USO requirements.
The thing with it is, a PRIVATE company will not care about how it would look to the public or anyone else.
The only interest of theirs is how the profit column looks, end of.
I think any real action won't happen until after the next General Election, and most of the 'fallout', will have passed by the time the following one is due.
I think cancelling Saturdays could be achieved through natural wastage, many FT jobs are now staffed with PT staff (no one has been made up in my area for 7/8 years at least), presumably in some anticipation of some actions like these being required. Plus, they would have the option of not renewing temporary contracts, and doing revisions to readjust workloads affected.

Personally, my real fear is that rather than reduce staff levels, they may try to reduce actual pay, though that would be difficult, for obvious reasons.
I can envisage a concerted effort by the company to introduce a different pay scale for new entrants i.e. minimum wage, with no allowances. But this would result in a longer term issue for current staff, not that they'd care.
It would also mean they would try and get rid of longer serving posties, in some cases, by any means necessary.

One thing we all should remember, the board serve at the behest of shareholders. Shareholders want dividends, the bigger the better. If the current board don't/can't deliver that, they will be ousted and replaced by those that will.
There is only so much scope for growth, and increasing profits this way is hard.
But, with 60/70% (approximate guess) of RM's cost being staff, it is by far the simplest target for cuts, and therefore the most effective, both short and long term.

[Lincox]

Personally I think the initial target will be the asetts. They know that the infrastructure of Royal Mail will and is worth a tidy fortune. The annual profit return against turn over is small fry and they know in the short term the CWU still wields a fair amount of power and shifting that power base quickly would look very ugly to the outsiders looking in. Until Royal Mail is recognised as just another company and not as an institution, the gold diggers will want to achieve their crave for returns where they can be realised quickly and without staining their reputation.