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TMS, "the business plan has nothing to do with the USO"..... that's great, then no change in the USO won't have a significant impact then.
An extract from yesterday's report.....
Risk 7: Failure to secure USO reform - Given the lack of urgent action by Government and Ofcom in pursuing USO reform, this risk is increasing with the passage of time. The UK has fallen behind other countries in modernising its postal USO. Royal Mail now needs urgent reform to ensure progress on its strategy and in the remediation of several interconnected principal risks. Whilst Ofcom has recently announced that it will review the potential for reform of the USO during 2024, the process proposed will take too long. Management will continue to make the case for change with Ofcom and Government in order to provide a more efficient, modern and sustainable USO.
Plus from the anti Marxist Sky News....
https://news.sky.com/story/royal-mail-blames-tough-economy-and-strike-settlement-costs-as-losses-grow-13009327#amp_tf=From%20%251%24s&aoh=17001586601293&referrer=https%3A%2F%2Fwww.google.com&share=https%3A%2F%2Fnews.sky.com%2Fstory%2Froyal-mail-blames-tough-economy-and-strike-settlement-costs-as-losses-grow-13009327
But IDS boss Martin Seidenberg reiterated the company's position that there was an "urgent" need for Royal Mail's Universal Service obligations to be relaxed.
It is currently required to deliver letters six days a week.
Mr Seidenberg said: "Looking ahead, we are transforming our business every day, but we can't do it all on our own.
"We also need the regulator and the government to do their bit.
"It's simply not sustainable to maintain a network built for 20 billion letters when we're now only delivering seven billion.
"The UK is not immune to the trends that we see across the world. Many other comparable countries have already reformed their Universal Service, and the UK is getting left behind.
"We welcome the fact that Ofcom will be reviewing options for the Universal Service, but the need for reform is urgent."
If I remember correctly both Maximas and yourself amongst others have been banging the drum for USO reform for the last couple of years and the IDS CEO agreed. Let's see what he can do.
TMS, "that’s because you’re like the couch potato football fan that sits in their arm chair yelling that ‘the manager is s*it’ and when you ask them why they haven’t got a scooby doo. Lol
And what exactly could I do to change these events? What have you done to change these events? I will tell you.... absolutely nowt..... because we, the minority shareholders and employees don't have the necessary voice. You can rant and rave about things needing to change but it's all about agreements and negotiation and we're not even in the building let alone the room.
I have never said that the USO doesn't need to be changed or reduced. What I have said is that the current agreement is the current agreement and until it is changed will remain the current agreement. It is a failure of senior management that they haven't been able to convincingly demonstrate and/or justify the need for reform to the UK Government or OFCOM. The very people who are entrusted to do their best for the shareholders and the business. Don't keep moaning to me or Derek about it.....email Seidenberg.
Speaking of agreements, I think that I may have mentioned this once or twice before but I, along with 90%+ of the workforce totally agree with changes to the sick policy as the overwhelming majority of employees take none or very little sick leave anyway so won't be affected by the changes.
One last note, yes GLS is performing very well but Thompson can take absolutely none of the credit for that can he? He has still left the UK operation in a much worse condition and without cross subsidy you have to wonder how much more the UK operation can withstand regarding financial losses. As I said earlier, Seidenberg seems to be hanging his hat on the UK Government and regulator helping him out here which could take a while.
TMS, "can you give us all a breakdown of the exact solution that you seemingly must know as to how IDS can maximise profit?....."
No, but even if I did they wouldn't take the word a Marxist. You see this is what the senior management and board of directors are paid a large sum of money to do....sort the paperwork out, legal issues, employment issues, balance the books, sort the dividend out etc.....the people who you were full of praise for over the last sixteen months, the people who were going to break the union and sort out the militant Marxist workforce.
Meanwhile, Thompson has walked away with a year's salary plus bonuses and allowances and left the business in no better condition than he found it. No doubt he will repeat this trick in his next appointment as well. This is what the benefits of failure looks like and the rest of us are bankrolling it.
"However, Seidenberg said the changes would “take time” despite “good progress” in implementing an agreement with the Communication Workers Union".
Hang on.....I thought that the union played no part in the running of the UK operation? Doesn't the head wag the tail here....lol
Return of the dividend payment...... I don't see why the GLS dividend payment shouldn't be around 10p given their increasing profits? I seem to remember that a few years ago the whole business made less than GLS is currently on track to make and the dividend was 9.6p.
So, Thompson dropped the bombshell around sixteen months ago that the UK operation was losing £1m per day. He then tried to make wholesale changes to the operation, much of which didn't have the confidence or backing of either the workforce or low level management and generally stirred the hornets nest and the SP plummeted.
Sixteen months later and the UK operation is now losing £1.7m a day. Now I understand that you have to crack a few eggs to make an omelette but how is this better? It has been mentioned that the UK operation could return to profitability by 2024/25 however with no cross subsidy is this really sustainable, especially as Seidenberg's plan seems to hint on the reliance of the UK Government making changes to the USO?
Redceo, getting back to the point of GLS vs Royal Mail staff costs.... looking at today's report, GLS with a workforce of around 22,000 spent £544m on people costs which is £24.7k each. Royal Mail has a workforce of around 140,000 (Wikipedia says IDS has a workforce of 162,000) and spent £2693m on people costs for the same period which equates to £19.2k each. Perhaps the GLS workforce aren't so badly paid?
Seidenberg said. "We also need the regulator and the government to do their bit. It's simply not sustainable to maintain a network built for 20 billion letters, when we're now only delivering seven billion. The UK is not immune to the trends that we see across the world. Many other comparable countries have already reformed their Universal Service, and the UK is getting left behind."
So, when the UK operation, under Thompson's tenure, was actually reducing the USO by default, they still couldn't turn a decent profit. How much of a reduction in the USO terms does RM need to actually turn a 5% profit on USO items?
Redceo, "there is obviously a different mentality within the GLS workforce"......whilst that may be true, you also have to remember that GLS has a totally different business model to RM and only employs around 20,000 staff across Europe and North America.
Morning Derek, I knew the story but assumed that the £52m fine had put an end to it and there's no doubt that the claim for an additional £600m for interest is ludicrous. Traditionally, claims between two companies, especially those who have close provider/customer ties are kept behind locked doors and negotiated out of the limelight but the text is what took me by surprise and statements such as......
"Royal Mail's behaviour is symptomatic of a historical culture within the organisation which has been prepared to deliberately abuse its dominant position and then brazenly deny any wrongdoing" and
"Whistl suspects that IDS' shareholders and bondholders may not fully appreciate the financial consequences of Royal Mail's refusal to accept responsibility for its actions. For example, the recent bond offerings by IDS in September failed to include a single reference to the claim.
Failure to agree a settlement will result in a lengthy and costly trial with the inevitable distraction for Royal Mail's management team from delivering their turnaround plans. Whistl encourages IDS' investors to seek answers from the company's Board to the following questions in order to make their own assessment.
If Royal Mail has failed to disclose a claim for more than £600m - a figure that continues to rise, as interest accrues at £50m per year - what else is Royal Mail failing to disclose to the market and IDS shareholders?"
.......lead me to believe that the Whistl statement appears to be worded and timed to adversely target today's interim report and put doubt into the market. Even worse, now that Whistl have thrown their hat into the ring on the back of one payout, they could potentially have a puncher's chance to win some more, albeit not £600m hopefully.
TMS, so you would be advocating for more job cuts, leading to ever increasing quality of service failures and therefore more fines?
When I look at articles on Royal Mail lately, there appears to be an ever increasing frustration from Joe Public and SMEs regarding the poor delivery standards and the fact that Post Office Counters has signed up with Evri and DPD (citing that won't be doing it any good either.
TMS, why would the UK operation want more job cuts when it has already announced that unfilled vacancies are a contributing factor to poor quality of service?
Reinstating the dividend..... possibly but highly unlikely in my opinion.
As far as I'm aware, Thompson was put on "gardening leave" in July and left the business last month?
Thank you for posting that link Sid.
I was quite shocked to see this, not because I didn't know that Whistl had put in a claim but because of the sheer bluntness of the whole statement especially given that Whistl is one, if not the largest, of Royal Mail's customers. They certainly haven't pulled their punches.
Given that Kretinsky and/or Vesa Equity have a foot in each camp, could there be some sort of hidden agenda?
TMS, it looks as though your modus operandi, on any of the LSE forums that you frequent, is to abuse anyone who has a differing opinion from yours and are quite happy to troll others with your abuse. Your antagonism towards others suggests bullying lof the lowest order.
In short, you add nothing of any use to this forum.
JB, so getting back to the original point that the UK operation are blaming poor quality of service partially on unfilled vacancies....... isn't this the company that, eighteen months ago determined that it was overstaffed and gave entire early shifts in smaller mail centres VR terms to leave that is now using the excuse of lack of available workforce? Honestly, you really couldn't make it up.....
On the subject of quality of service failures, it has been noticed that, depending on location, T48 items are failing due to lack of parcels automation. There are around ten "small" mail centres (three of which are located in Devon and Cornwall and three in Scotland) which don't have and never will have parcel sorting machines. Traditionally, the early shifts would sort the T24 and T48 items manually however the new regime insists that these are now sent to the nearest mail centre with parcel machines however more often than not the recieving mail centre only has the capacity to deal with the T24 items and returns the T48 items to the sending mail centre the following day meaning that the T48 now becomes T24 and has to be sorted manually by mail centre staff who are prepared to turn up following an early morning phone call which is not always positively received.