Royal Mail boss has a shocker as meeting with MPs doesn't go well

[TrueBlueTerrier]

https://www.theguardian.com/business/ni ... on-strikes

Simon Thompson seemed to arrive to talk about strikes determined not to answer questions asked

There have been worse performers in front of a business select committee, but Simon Thompson, chief executive of Royal Mail, had a shocker on Tuesday. When the session ends with the committee chair – the normally mild-mannered Labour MP Darren Jones – issuing a warning about the seriousness of misleading parliament, you know it did not go well.

Jones’s irritation was understandable because Thompson arrived seemingly determined not to answer the questions he was asked. It took three goes to extract a minor piece of information about the use of “total shareholder return” metrics in his remuneration package. When Jones mistakenly referred to a “PVA” device, Thompson said he hadn’t heard of such a thing when it was obvious – and became clear two minutes later – that what was meant was a “PDA”, or postal digital assistant, the gadgets carried on delivery rounds.

Given that Thompson was trying to deflect the allegation that he and Royal Mail have been overly confrontational – a criticism made by his own predecessor, Rico Back, a few weeks ago – riling MPs unnecessarily was an odd tactic to adopt. The effect was to undercut Thompson’s argument on other matters – notably his claim that Royal Mail hasn’t been prioritising the delivery of parcels over letters, which was the moment at which Jones boiled over.

But let’s be even-handed. Dave Ward, general secretary of the CWU, was given a gentle ride by MPs on his big claim that Royal Mail made two “catastrophic decisions” last year that amounted to “gross mismanagement”. Only on the first can one have some sympathy.

It was indeed tin-eared or bull-headed for the group, now rebranded International Distribution Systems (IDS), to hand shareholders an extra £400m via a special dividend and share buyback in late 2021. The sum was the spoils of inflated demand during the pandemic, in effect, and was very close to the £416m that Royal Mail made in operating profits that year. The timing of the payment was terrible. Royal Mail was about to enter the current talks that have proved so tricky on changes to working practices and pay. As Back, Thompson’s predecessor, said to the Sunday Times, it would have been better to use the £400m to ease the inevitable transition towards parcels.

But Ward should have been pressed far harder by MPs on his claim that it was somehow outrageous for IDS to end the cross-subsidisation of Royal Mail from the profits of GLS, the far more successful Amsterdam-based parcels business that operates in continental Europe and North America.

Come on, the shareholders in a private company – as the parent has now been for a decade – are never going to tolerate indefinitely a situation in which the loss-making bit is propped up by the operation making good money. The numbers in this case are too stark: Royal Mail, with the lockdown now over, is losing £1m a day currently while GLS is on course for adjusted operating profits of €370m to €410m this year.

Ward and the CWU may wish the shareholders were more sentimental about Royal Mail, but they’re not. The Czech Sphinx, Daniel Křetínský, sitting on a 23% stake and with clearance from the UK government to go above 25%, may not say much but you can be sure he has noticed that GLS would have a standalone value of £4bn-ish while City analysts usually ascribe a negative value to Royal Mail.

[Royalman68]

https://www.theguardian.com/business/ni ... on-strikes

Simon Thompson seemed to arrive to talk about strikes determined not to answer questions asked

There have been worse performers in front of a business select committee, but Simon Thompson, chief executive of Royal Mail, had a shocker on Tuesday. When the session ends with the committee chair – the normally mild-mannered Labour MP Darren Jones – issuing a warning about the seriousness of misleading parliament, you know it did not go well.

Jones’s irritation was understandable because Thompson arrived seemingly determined not to answer the questions he was asked. It took three goes to extract a minor piece of information about the use of “total shareholder return” metrics in his remuneration package. When Jones mistakenly referred to a “PVA” device, Thompson said he hadn’t heard of such a thing when it was obvious – and became clear two minutes later – that what was meant was a “PDA”, or postal digital assistant, the gadgets carried on delivery rounds.

Given that Thompson was trying to deflect the allegation that he and Royal Mail have been overly confrontational – a criticism made by his predecessor, Rico Back, a few weeks ago – riling MPs unnecessarily was an odd tactic to adopt. The effect was to undercut Thompson’s argument on other matters – notably his claim that Royal Mail hasn’t been prioritizing the delivery of parcels over letters, which was the moment at which Jones boiled over.

But let’s be even-handed. Dave Ward, general secretary of the CWU, was given a gentle ride by MPs on his big claim that Royal Mail made two “catastrophic decisions” last year that amounted to “gross mismanagement”. Only on the first can one have some sympathy.

It was indeed tin-eared or bull-headed for the group, now rebranded International Distribution Systems (IDS), to hand shareholders an extra £400m via a special dividend and share buyback in late 2021. The sum was the spoils of inflated demand during the pandemic, in effect, and was very close to the £416m that Royal Mail made in operating profits that year. The timing of the payment was terrible. Royal Mail was about to enter the current talks that have proved so tricky on changes to working practices and pay. As Back, Thompson’s predecessor, said to the Sunday Times, it would have been better to use the £400m to ease the inevitable transition towards parcels.

But Ward should have been pressed far harder by MPs on his claim that it was somehow outrageous for IDS to end the cross-subsidization of Royal Mail from the profits of GLS, the far more successful Amsterdam-based parcels business that operates in continental Europe and North America.

Come on, the shareholders in a private company – as the parent has now been for a decade – are never going to tolerate indefinitely a situation in which the loss-making bit is propped up by the operation making good money. The numbers, in this case, are too stark: Royal Mail, with the lockdown now over, is losing £1m a day currently while GLS is on course for adjusted operating profits of €370m to €410m this year.

Ward and the CWU may wish the shareholders were more sentimental about Royal Mail, but they’re not. The Czech Sphinx, Daniel Křetínský, sitting on a 23% stake and with clearance from the UK government to go above 25%, may not say much but you can be sure he has noticed that GLS would have a standalone value of £4bn-ish while City analysts usually ascribe a negative value to Royal Mail.

Good article! It is just a matter of time before Daniel swoops on IDS and split the GLS from a loss-making Royal Mail. If I were a shareholder, I would be happy with that. Some people here still seem to think Royal Mail can continue to run the way it used to pre-privatization. That's not the case. The government ceased to be a paymaster for Royal Mail. Now Royal Mail must be able to stand on its own two feet, which means profit comes before service. There are several factors why Royal Mail is losing 1 million a day. One of them is the USO. Its current status quo is not sustainable or viable financially. The mail volume has halved over the past 10 years, and this will continue. Hence, rather than the union fighting to retain the USO, they can help Royal Mail to get rid of the Saturday delivery instead, in return for a better pay rise and better terms and conditions for its member. This could be a good compromise in my humble opinion.

[NWpostie]

Watched it on YouTube Simon didn't come out of it well.

[Royalman68]

Watched it on YouTube Simon didn't come out of it well.

The survival of Royal Mail is bigger than Simon or Dave. No one is blameless here. We need to stop playing a blame game and work as one team instead. Our survival depends on working together and not working against it. Royal Mail will press ahead with its agenda regardless because Simon has the backing of shareholders. The CWU could not stop Royal Mail from being privatised, so what makes you think the union can stop Royal Mail from doing what it wants?

[britwrit]

Oh, Guardian, you are so tiresome. The only reason you're still around is because of your non-profit status and billion-pound trust fund. If one part of a company supporting another part is good enough for you, it's good enough for us.

[NWpostie]

Watched it on YouTube Simon didn't come out of it well.

The survival of Royal Mail is bigger than Simon or Dave. No one is blameless here. We need to stop playing a blame game and work as one team instead. Our survival depends on working together and not working against it. Royal Mail will press ahead with its agenda regardless because Simon has the backing of shareholders. The CWU could not stop Royal Mail from being privatised, so what makes you think the union can stop Royal Mail from doing what it wants?

I take your point, it still doesn't change the fact that Simon's performance at the common select committee was evasive, exorcerating, short on clarity I was unimpressed, since this is in the public domain the rest of country must come to the same conclusion.

[livewirer]

Also on BBC iPlayer
https://www.bbc.co.uk/iplayer/episode/m ... -committee

Business, Energy and Industrial Strategy Committee Tuesday 17 January 2023
https://parliamentlive.tv/event/index/6 ... c9d6644c2a

[post6675]

Watched it on YouTube Simon didn't come out of it well.

The survival of Royal Mail is bigger than Simon or Dave. No one is blameless here. We need to stop playing a blame game and work as one team instead. Our survival depends on working together and not working against it. Royal Mail will press ahead with its agenda regardless because Simon has the backing of shareholders. The CWU could not stop Royal Mail from being privatised, so what makes you think the union can stop Royal Mail from doing what it wants?

I take your point, it still doesn't change the fact that Simon's performance at the common select committee was evasive, exorcerating, short on clarity I was unimpressed, since this is in the public domain the rest of country must come to the same conclusion.

I think your severely overestimating how much of the country care enough about this dispute

[NWpostie]

Watched it on YouTube Simon didn't come out of it well.

The survival of Royal Mail is bigger than Simon or Dave. No one is blameless here. We need to stop playing a blame game and work as one team instead. Our survival depends on working together and not working against it. Royal Mail will press ahead with its agenda regardless because Simon has the backing of shareholders. The CWU could not stop Royal Mail from being privatised, so what makes you think the union can stop Royal Mail from doing what it wants?

I take your point, it still doesn't change the fact that Simon's performance at the common select committee was evasive, exorcerating, short on clarity I was unimpressed, since this is in the public domain the rest of country must come to the same conclusion.

I think your severely overestimating how much of the country care enough about this dispute

I'm referring to anyone else who has actually watched it, the rest care enough if they dont get their parcels or letters.

[pieoftheday]

Watched it on YouTube Simon didn't come out of it well.

The survival of Royal Mail is bigger than Simon or Dave. No one is blameless here. We need to stop playing a blame game and work as one team instead. Our survival depends on working together and not working against it. Royal Mail will press ahead with its agenda regardless because Simon has the backing of shareholders. The CWU could not stop Royal Mail from being privatised, so what makes you think the union can stop Royal Mail from doing what it wants?

I take your point, it still doesn't change the fact that Simon's performance at the common select committee was evasive, exorcerating, short on clarity I was unimpressed, since this is in the public domain the rest of country must come to the same conclusion.

I think your severely overestimating how much of the country care enough about this dispute

I'm referring to anyone else who has actually watched it, the rest care enough if they dont get their parcels or letters.

Yeah its funny that, I often hear that people don't care whether we strike or not but loads of customers dash to the door if they don't get any letters for a couple of days

[TrueBlueTerrier]

The survival of Royal Mail is bigger than Simon or Dave. No one is blameless here. We need to stop playing a blame game and work as one team instead. Our survival depends on working together and not working against it. Royal Mail will press ahead with its agenda regardless because Simon has the backing of shareholders. The CWU could not stop Royal Mail from being privatised, so what makes you think the union can stop Royal Mail from doing what it wants?

Error, error, does not compute. Two incompatible positions in the same argument,

Unless of course you think criticism from the Union, and representation from it of its members views should be dismissed. A bit Putinesque for me.