Viewing 40 posts - 81 through 120 (of 306 total)
  • Carillion
  • Dickyboy
    Full Member

    Hope we aren’t too exposed 😥

    gavinpearce
    Free Member

    Public procurement contracts always let to the cheapest…. this leads to crazy cost cutting to win the contracts in the first place and huge costs to actually get that far. There is no desire for quality. It’s no surprise that these things happen as the margins for error are so slim. Terrible for everyone involved. Fingers crossed they can all get jobs.

    dazh
    Full Member

    Sad news this morning. It seems the victims of govt penny pinching are not limited to the sick and unemployed. It raises huge questions of the relationship between govt and industry. Why do firms like carillion take on these loss making contracts which put the whole company at risk? I’m not sure I believe it’s only down to poor management. There’s something rotten somewhere.

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    Poopscoop
    Full Member

    Can I am a dumb again of the more informed posters plead?

    What will happen to the in progress contacts for the public sector going on right now?

    Ming the Merciless
    Free Member

    I feel sorry for the workers/pensioners and contractors affected by this. No doubt the Directors will be sliding smoothly into new positions in the next few weeks 👿

    There really should be a public flogging post for people that screw up pensions (this includes the political leaders from Thatcher onwards that ignored the growing ageing population problem).

    jamj1974
    Full Member

    I just want to say that this is probably going to be a really tough time for many of the staff and subbies and I wish you all the best. I hope things get sorted out soon.

    Very much this. I have friends and former colleagues working for them and my fingers are massively crossed for them.

    jamj1974
    Full Member

    Sad news this morning. It seems the victims of govt penny pinching are not limited to the sick and unemployed. It raises huge questions of the relationship between govt and industry. Why do firms like carillion take on these loss making contracts which put the whole company at risk? I’m not sure I believe it’s only down to poor management. There’s something rotten somewhere.

    Also this. Seen at first hand in the same sectors – construction, hard FM, soft FM and provision of other services to government.

    IHN
    Full Member

    private companies must stand and fall on their own

    Unless they’re banks.

    Yawn.

    tjagain
    Full Member

    Carrillion have taken over a billion pounds out of the system – thats why they are going bust. all the money paid to shareholders and stolen from the pension fund. should be jailed every last one of the directors.

    Why do firms like carillion take on these loss making contracts which put the whole company at risk?

    Because they can remove large amunts of money from the system and then go bust deliberatly to avoid their liabilities. Its theft pure and simple.

    they would no be going bust if they hadn’t taken all that money in profits and given it to shareholders but instead put it into wages and pension payments. the going bust is a deliberate action to avoid their liabilities and to protect the fortunes the board and shareholders have stolen

    IHN
    Full Member

    all the money paid to shareholders and stolen from the pension fund.

    That’s a pretty serious, and probably false, allegation.

    tjagain
    Full Member

    its the truth. of course it will be dresssed up as other things but its over a billion pounds that carrillion shareholders have takenout of the company. That billion pounds would have kept the company afloat.

    I(ts a common practice. pay shareholders dividends and huge wages to the board which means not enough money left to meet other committments like wages and pension contributions then put the company into administration

    munrobiker
    Free Member

    We do work for Carillion, fortunately we don’t have anything on with them just now and, in all honesty, I really, really won’t miss them. They’re a pretty awful company to work for. We also do work for Kier, B&K, Morgan Sindall and a few others and none of them are anywhere near as bad.

    piha
    Free Member

    Sad day for the employees of Carillion.

    I fully expect the unfinished work will be finished off and the maintenance contracts will go out to tender again or taken in-house/nationalised. I think that the giant French construction firms will be eager to take on the contracts, they already do this kind of work quite successfully in the UK.

    wiggles
    Free Member

    Sad time for the staff, as a currently unemployed person I hope they find something as it’s not the best market out there at the moment 🙁

    But I agree with TJ ( 😯 ) that’s what it is essentially about, didn’t the CEO or someone manage to ensure he got his £4m bonus before all this happened?

    £4m for running a company into the ground is pretty good money…

    kimbers
    Full Member

    So if hedge funds had been predicting this for over a year, hire cone the government haven’t stepped in sooner…. We know they are only about one thing, but someone should have been aware, when they are so important to the country.

    piha
    Free Member

    Carillion’s sub-contractors will be hit especially hard.

    Companies like Carillion sub’ huge amounts of their work out to third parties and little will be heard of the struggle the subbies face. I expect some will cease trading due to Carillions demise.

    Carillions dividends look to have been quite healthy over the last few years, quite a surprise considering the trouble they’ve been in. Looks like a very poorly run PLC and I would be very interested to see what the senior Carillion people managed to take out of the company over the last few years.

    IHN
    Full Member

    The argument that the shareholders of ‘too large to fail’ banks and other companies are pension funds, and that by implication it is ordinary people who will suffer if the companies are not bailed out by public money, is ultimately specious.

    The banks weren’t bailed out to protect the shareholders, they were bailed out to protect the account holders.

    Imagine that RBS had gone bust. In an instant, every account holder would have lost access to their money. Forget all the missed bill payments, mortgage payments, loan defaults etc, instead think about the fact that every business that banks with RBS, from corner shop to megacorp, would have gone into liquidation. That means that everyone that worked for all those businesses would have lost their jobs. The economy goes into meltdown.

    grumpysculler
    Free Member

    Directors and hedge funds pretty much brought Carillion down by lining their own pockets instead of running a business. Immoral, but almost certainly not illegal (perhaps it should be…)

    hire cone the government haven’t stepped in sooner

    Because they though, as Carillion did, that the debt deal the company was after would be accepted by the banks.

    But the banks said no, rumoured to be because they wanted government money to soften their losses. What I can’t work out is that now it seems the banks have lost more than if they had accepted the deal?

    coconut
    Free Member

    Big big shock today, I genuinely believed this could be saved. The share holders lost a fortune and the nit wit who claimed shareholders took a billion from the company is clueless. The board of directors are guilty of fraud. All Carillion sites have closed down… nothing no gets finished

    zokes
    Free Member

    It seems the victims of govt penny pinching are not limited to the sick and unemployed.

    Whilst I feel sorry at the personal level for the many people directly affected by this, I don’t think the government can be accused of screwing the company over. The government puts projects out to tender, private firms bid on them. If they don’t like the terms of the eventual contract they’re not being forced to sign it. Free market neoliberalism, suck it up.

    T1000
    Free Member

    Nothing more expensive than getting a half finished priject completed by a new main contractor

    matt_outandabout
    Full Member

    Sad day for employees, even more so for the many more sub-contracted companies they were working with.

    Carillions dividends look to have been quite healthy over the last few years, quite a surprise considering the trouble they’ve been in.

    I am with TJ on this one – over the last few years they have paid dividends, paid bonuses, paid huge salaries etc. Yet were sinking. While it may not be direct fraud, it is reckless and disingenuous.

    My own employer when I joined in 2013 was heading under, had just cut 50% of workforce and closed an office. We have had three years of hard chuffing work, minimal resources such as no new IT unless vital, all worked blooming hard to get work Last year it has suddenly come good – we are back trading with surplus, recruiting for new projects, invested in new resources like IT to speed up work, looks like salary increases may be on the cards if this carries on this financial year. It is called prudence.

    wiggles
    Free Member

    Free market neoliberalism, suck it up.

    But don’t you think there should be some consideration into the likelihood of a company actually being able to fulfill their contract rather than just “that ones the cheapest”

    scotroutes
    Full Member

    Due diligence would have shown the risk in giving more work to Carillion. Sometimes cheapest isn’t the best option.

    Any MPs amongst the directors?

    thecaptain
    Free Member

    Will Carillion go bust = No in a nut shell

    It’s great to have such expert commentary from insiders.

    tjagain
    Full Member

    coconut – Member

    Big big shock today, I genuinely believed this could be saved. The share holders lost a fortune and the nit wit who claimed shareholders took a billion from the company is clueless. The board of directors are guilty of fraud. All Carillion sites have closed down… nothing no gets finished

    Its indisputable that the board and sharholders took huge sums out of the company. Huge sums that if left in the company could have kept it afloat

    piha
    Free Member

    scotroutes – Member
    Due diligence would have shown the risk in giving more work to Carillion. Sometimes cheapest isn’t the best option.

    Any MPs amongst the directors?

    POSTED 46 SECONDS AGO # REPORT-POST

    Baroness Morgan is a director 😯

    T1000
    Free Member

    Make pension funding sufficiency part of the scoring criteria for all government contracts

    gonefishin
    Free Member

    Its indisputable that the board and sharholders took huge sums out of the company. Huge sums that if left in the company could have kept it afloat

    Lets be very clear about this, and other statements that are along similar lines, the responsibility of the board of a company to act in the best interests of the shareholders, not the employees. You (plural not just TJ) may not like that fact but that is the law.

    Whilst board remuneration and large individual bonuses are certainly outside best use of the shareholders money but when compared with the overall company turnover it is highly unlikely to be a significant amount of money.

    bikebouy
    Free Member

    The BBC article states the Government will take over the Government defined contracts (Oxford City’s Council have already confirmed thier position) and the Public Contracts will be sold to potential buyers…

    Network Rail will be unaffected.

    Pension Funds now managed under PPF so that’s safe, though the deficit of £600m will undoubtably remain just that. So those that put into the Fund probably won’t receive the full term amounts.

    matt_outandabout
    Full Member

    I also see that the board has Philip Green on – who advised David Cameron on business corporate responsibility…

    piha
    Free Member

    Looks like Carillion paid over £350million in dividends since 2012. Not an insignificant amount of money for a company on a less than stable financial foundation.

    T1000
    Free Member

    It’s in the share holders best interest for the company to report honestly, forecast correctly, manage the business professionally, take and manage risks appropriately, meet the companies legal obligations to all parties.

    It is not it the best interest of shareholders to fail in the above or to pay large dividends when the performance of the business doesn’t justify it

    If they get the above list right then the shareholders investments have been justified and they deserve just reward. The failure here is with the directors of the business.

    wwpaddler
    Free Member

    the responsibility of the board of a company to act in the best interests of the shareholders, not the employees.

    The problem with this is that this is often carried out on a short term basis where the shareholder interest and the employees interest do not align.

    If a more long-term view is taken then the interests of the shareholders and the employees are more closely aligned.

    Until shareholders and directors start to take a long-term view events like this will continue to happen

    Isn’t it a different Phillip Green to BHS?

    dovebiker
    Full Member

    I’ve worked with a couple of Government departments – and neither had a clue about assessing industrial capability, they are solely driven by the Treasure mantra of competition and margins, without any real understanding of the impact of what they were trying to do if they fail. In industry, we continually assessing our suppliers to make sure the critical ones aren’t over-exposed / likely to fail. The fact that Government Depts continued to award contracts to Carillion, who no doubt used them to secure more money from banks led to their downfall.

    dazh
    Full Member

    The government puts projects out to tender, private firms bid on them. If they don’t like the terms of the eventual contract they’re not being forced to sign it.

    In a completely transparent free market that’s exactly how it should work. But it doesn’t. I work for a major supplier to govt infrastructure projects like HS2. Everyone knows these projects are a nightmare. We struggle to break even on them let alone make a profit. Some firms, like Carillion, undercut others to win the work in the knowledge that they’ll never make a profit. Why is that? Anything to do with the close relationship between CEOs and the govt? A more cynical person might think it’s because the CEOs get to trouser millions with absolutely no consequences for failure, with the complete acceptance (or even collusion) of govt. The whole thing stinks.

    gonefishin
    Free Member

    The problem with this is that this is often carried out on a short term basis where the shareholder interest and the employees interest do not align.

    I completely agree with you and when the company you work for is shorted by large hedge funds, or has their share price being “manipulated” by them for short term gain it’s not a nice place to be. It is however the law and provided no one is acting illegally then it’s the way things are.

    frankconway
    Full Member

    MOB – wrong Philip Green; you’re referring to the retailer.
    Carillion were, effectively, a ‘management contractor’ with a small direct labour force relative to it’s size.
    Bid, win contract, contract with subbies for scheme delivery, attempt to ‘re-engineer’ scheme, squeeze subbies to deliver buying gains and make margin.
    Part of their process was to squeeze down the size of the risk pot (allowance) on each scheme to reduce bid price meaning that if/when problems arose there was limited scope to absorb the financial impact.
    Fixed price contracts are ok if there is complete visibility and minimal risk; Carillion signed up to some where it was totally inappropriate.
    Add in the unforeseen bad debts from their Middle East contracts; banks who wanted Gov to soften the blow by providing funding and then refused to provide further support when the Gov declined.

    We have the usual range of uninformed comments about the board and shareholders which show no understanding.
    As pointed about ^^^ a board’s duty is to it’s shareholders, not it’s employees.

    T1000 – nice idea about assessing pension fund health when awarding contracts but impractical; suggest you check out how many major companies are running pension fund deficits – it’s 100% legal. Carillion were no different.
    The PPF will support current and future pensioners to 85%.
    Reliance on the PPF is not something public sector employees will ever need to worry about as theirs are, effectively, underwritten by the Gov.

    Former CEO Richard Howson who led the charge for growth should be forced to repay his bonus; in addition his salary and benefits payments – which he is still receiving – should be stopped immediately.

    ransos
    Free Member

    Some firms, like Carillion, undercut others to win the work in the knowledge that they’ll never make a profit. Why is that? Anything to do with the close relationship between CEOs and the govt? A more cynical person might think it’s because the CEOs get to trouser millions with absolutely no consequences for failure, with the complete acceptance (or even collusion) of govt. The whole thing stinks.

    It’s also because they can take the risk of a massive cost overrun, and be safe in the knowledge that the government will pay it. Why? Because by that point the project will be at a stage where it would be even more expensive to re-tender with a different contractor.

    zokes
    Free Member

    But don’t you think there should be some consideration into the likelihood of a company actually being able to fulfill their contract rather than just “that ones the cheapest”

    Absolutely there should be. But that’s poor procurement risk management on the part of the government, not the government screwing over a major company.

Viewing 40 posts - 81 through 120 (of 306 total)

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