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Thread: Carillion oh verge of collapse

  1. #1

    Carillion oh verge of collapse

    £1.5 billion of debt and a pension shortfall of £587 million. Absolutely shocking.

    http://www.bbc.co.uk/news/business-42675427

  2. #2

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Auntie Andy View Post
    £1.5 billion of debt and a pension shortfall of £587 million. Absolutely shocking.

    http://www.bbc.co.uk/news/business-42675427
    Their CEO's basic pay increased from £790k to £1.5m in the five years he has been there and last March they paid out a record dividend on 18.4p a share. Part of the CEO's additional bonus was based on appointing a new Finance Director to improve leadership yet one year later they have unsustainable debts and a massive pension shortfall.

    What I can't understand is that the government has a defined IT strategy of seeking to work with small to medium enterprises rather than giants like IBM and Accenture to lower dependency on high margin major businesses yet at the same time when it comes to infrastructure and outsourcing projects a large proportion of the work ends up with the same small number of companies.

    Carillion may now be considered too big to fail and may need state intervention or if this is considered to be too risky politically then the impact will be most harshly felt on its workers and those in its pension fund.

  3. #3

    Re: Carillion oh verge of collapse

    Quote Originally Posted by cyril evans awaydays View Post
    Their CEO's basic pay increased from £790k to £1.5m in the five years he has been there and last March they paid out a record dividend on 18.4p a share. Part of the CEO's additional bonus was based on appointing a new Finance Director to improve leadership yet one year later they have unsustainable debts and a massive pension shortfall.

    What I can't understand is that the government has a defined IT strategy of seeking to work with small to medium enterprises rather than giants like IBM and Accenture to lower dependency on high margin major businesses yet at the same time when it comes to infrastructure and outsourcing projects a large proportion of the work ends up with the same small number of companies.

    Carillion may now be considered too big to fail and may need state intervention or if this is considered to be too risky politically then the impact will be most harshly felt on its workers and those in its pension fund.
    If Carillion go through - it will affect lots of large infrastructure projects. So the Govt / Carillion either need to find a buyer or arrange it so their creditors dont call in the debts.

    Got a couple of mates who work for Carillion on the HS2 project (waste of time / money in my opinion). Their gut feeling is that a buyer will be found to take on the existing Govt work - and everything else will go.

    ps - Accenture dont have a very good job in Govt IT delivery - least not on the big one I worked , they had to give the contract away to a competitor.

  4. #4

    Re: Carillion oh verge of collapse

    Quote Originally Posted by cyril evans awaydays View Post
    Their CEO's basic pay increased from £790k to £1.5m in the five years he has been there and last March they paid out a record dividend on 18.4p a share. Part of the CEO's additional bonus was based on appointing a new Finance Director to improve leadership yet one year later they have unsustainable debts and a massive pension shortfall.

    What I can't understand is that the government has a defined IT strategy of seeking to work with small to medium enterprises rather than giants like IBM and Accenture to lower dependency on high margin major businesses yet at the same time when it comes to infrastructure and outsourcing projects a large proportion of the work ends up with the same small number of companies.

    Carillion may now be considered too big to fail and may need state intervention or if this is considered to be too risky politically then the impact will be most harshly felt on its workers and those in its pension fund.
    It’s absolutely disgusting that this is continually allowed to happen. Capitalism stinks, the working man will once again be shafted and the rich walk away unscathed. But it’s OK just privatise everything and all will be OK.

  5. #5

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Auntie Andy View Post
    It’s absolutely disgusting that this is continually allowed to happen. Capitalism stinks, the working man will once again be shafted and the rich walk away unscathed. But it’s OK just privatise everything and all will be OK.
    So let a private company bid for work - fail and go bust or let a Govt nationalised dept - run it in the same way - and still make the same loss. If you want to protect us - the tax payer - then you would choose the former not the latter.

    The Govt wont make a loss - it is the banks , shareholders, pension funds that will take the hit if it goes bust. All that will happen to the Govt is that another company will bid for the existing work..

    The 'rich' wont walk away unscathed - they (the shareholders + pensions funds) are the ones who will get hit.

  6. #6

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Mambo View Post
    So let a private company bid for work - fail and go bust or let a Govt nationalised dept - run it in the same way - and still make the same loss. If you want to protect us - the tax payer - then you would choose the former not the latter.

    The Govt wont make a loss - it is the banks , shareholders, pension funds that will take the hit if it goes bust. All that will happen to the Govt is that another company will bid for the existing work..

    The 'rich' wont walk away unscathed - they (the shareholders + pensions funds) are the ones who will get hit.
    What??? As pointed out earlier in the thread “Their CEO's basic pay increased from £790k to £1.5m in the five years he has been there and last March they paid out a record dividend on 18.4p a share. Part of the CEO's additional bonus was based on appointing a new Finance Director to improve leadership yet one year later they have unsustainable debts and a massive pension shortfall”.

    Great!

  7. #7

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Auntie Andy View Post
    What??? As pointed out earlier in the thread “Their CEO's basic pay increased from £790k to £1.5m in the five years he has been there and last March they paid out a record dividend on 18.4p a share. Part of the CEO's additional bonus was based on appointing a new Finance Director to improve leadership yet one year later they have unsustainable debts and a massive pension shortfall”.

    Great!
    To be fair to Mambo I think he was making a slightly different point that if Carillion's contract for HS2 let's say was taken into public ownership then the taxpayer could face an equal or greater bill by a combination of setting up the service and perhaps running it less efficiently so the cost is higher. I was highlighting the way that Carillion seemed to be rewarding its senior management and shareholders for what has turned out to be a failing company. You don't build up the level of debt and pension shortfall you highlight over a single financial year.

    I don't buy the argument that a public sector body would have made the same loss. Carillion seems to have suffered through a combination of mismanagement by over-borrowing to support its over-rapid expansion via public sector contracts in a number of sectors, some of which they seem to have badly priced. Even at low interest rates it has to service the interest on that debt which it seems unable to manage.

    Mambo mentions another company picking up the slack. I read that on HS2 which was won by a consortium including Carillion that the bid explicitly caters for the other winning tenderers covering the gap should one member drop out. It will be interesting to see how this pans out in practice. Carillion had released a major profits warning just before they were announced as one of the successful tenderers for HS2 by the Transport Department so don't be surprised to hear that Chris Grayling is on an overseas trip next week if Carillion goes belly-up.

  8. #8

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Auntie Andy View Post
    What??? As pointed out earlier in the thread “Their CEO's basic pay increased from £790k to £1.5m in the five years he has been there and last March they paid out a record dividend on 18.4p a share. Part of the CEO's additional bonus was based on appointing a new Finance Director to improve leadership yet one year later they have unsustainable debts and a massive pension shortfall”.

    Great!

    Why are you so aggressive ? , I wasnt talking about the CEO - if a company wants to pay their CEO x amount and dividends of xx in the £ - that is entirely their responsibility and their decision - if the board and shareholders arent happy they can get him removed. The main financial 'losers' in Carillion going bust will be the shareholders of the company - and any other companies that are owed money - if they go into liquidation that is.

    My point being that as a tax payer - we would be far better that a private company went bust - than get a Govt 'nationalised' dept to implement the projects - just my opinion having worked in both public and private sectors. The Govt can sue / penalise a private company for not delivering on time / to budget , they cant exactly fine themselves or take themselves to court for non delivery of their own project.

    Cyril - I know there are contingencies in place on the HS2 contract for this eventuality - how that will work out in practice - Im not sure. I agree with you Carillion's issues seem to be from trying to grow too quickly, paying a high dividend in order to encourage equity investment perhaps - and trying to keep the pension fund afloat, a govt run organisation would have the same pension problem.

    I wonder if the Govt are planning a network rail type scenario for Carillion. I think (ironically) under EU law all major infrastructure projects must be put out to tender for anyone to bid for. "Anyone" being private companies or state owned companies.

    My mate at Carillion on the HS2 project isnt that concerned - the work still needs to get done - so in all probability he will end up working for the new contractor.

  9. #9

    Re: Carillion oh verge of collapse

    They seem to be doing a lot of government business.

  10. #10

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Mambo View Post
    Why are you so aggressive ? , I wasnt talking about the CEO - if a company wants to pay their CEO x amount and dividends of xx in the £ - that is entirely their responsibility and their decision - if the board and shareholders arent happy they can get him removed. The main financial 'losers' in Carillion going bust will be the shareholders of the company - and any other companies that are owed money - if they go into liquidation that is.

    My point being that as a tax payer - we would be far better that a private company went bust - than get a Govt 'nationalised' dept to implement the projects - just my opinion having worked in both public and private sectors. The Govt can sue / penalise a private company for not delivering on time / to budget , they cant exactly fine themselves or take themselves to court for non delivery of their own project.

    Cyril - I know there are contingencies in place on the HS2 contract for this eventuality - how that will work out in practice - Im not sure. I agree with you Carillion's issues seem to be from trying to grow too quickly, paying a high dividend in order to encourage equity investment perhaps - and trying to keep the pension fund afloat, a govt run organisation would have the same pension problem.

    I wonder if the Govt are planning a network rail type scenario for Carillion. I think (ironically) under EU law all major infrastructure projects must be put out to tender for anyone to bid for. "Anyone" being private companies or state owned companies.

    My mate at Carillion on the HS2 project isnt that concerned - the work still needs to get done - so in all probability he will end up working for the new contractor.
    Apologies for sounding aggressive, I don’t intend it at you. I just get so angry at the working man continually getting shafted.

    This article details how Carillion bosses instead of looking after their company, staff and their pensions, instead protected their bonuses despite knowing the company was in trouble.

    http://www.constructionenquirer.com/...ses-protected/

  11. #11

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Auntie Andy View Post
    Apologies for sounding aggressive, I don’t intend it at you. I just get so angry at the working man continually getting shafted.

    This article details how Carillion bosses instead of looking after their company, staff and their pensions, instead protected their bonuses despite knowing the company was in trouble.

    http://www.constructionenquirer.com/...ses-protected/
    But no one is getting 'shafted' as you so eloquently put it - apart from the shareholders (those shareholders being banks, pension funds, and private investors). The 'working man' will still be doing his job - but probably for another company very soon. The contract of work still needs to be completed, another company will come in and 'employ' those who are working on Govt contracts. That same company will then apply for new Govt tenders as well , I would have thought

    I read the report - and it is simple, the shareholders will raise a no confidence vote in the board to get rid of the chairman / CEO / finance director and anyone else who may have been trying to do something dodgy.
    When the answer to any question is more Govt - then usually the wrong question is being asked - in my opinion.
    Although in Arriva trains Wales (German owned) I think the WAG idea of attempting to run the franchise themselves will be an interesting experiment and one worth trying.

  12. #12

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Mambo View Post
    But no one is getting 'shafted' as you so eloquently put it - apart from the shareholders (those shareholders being banks, pension funds, and private investors). The 'working man' will still be doing his job - but probably for another company very soon. The contract of work still needs to be completed, another company will come in and 'employ' those who are working on Govt contracts. That same company will then apply for new Govt tenders as well , I would have thought

    I read the report - and it is simple, the shareholders will raise a no confidence vote in the board to get rid of the chairman / CEO / finance director and anyone else who may have been trying to do something dodgy.
    When the answer to any question is more Govt - then usually the wrong question is being asked - in my opinion.
    Although in Arriva trains Wales (German owned) I think the WAG idea of attempting to run the franchise themselves will be an interesting experiment and one worth trying.
    I pay into a pension scheme, I imagine most on here do. I pay tax, I imagine most on here do. The tax I pay goes to pay for projects like HS2, my pension contributions may well also get invested in a company like this. So I am potentially part-funding the CEO's payrise twice. He drives off into the sunset with his bags of dosh after doing a shitty job and my pittance pension takes another hit.

    Does this really look like an example of a situation that doesn't affect the little people?

  13. #13

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Eric Cartman View Post
    I pay into a pension scheme, I imagine most on here do. I pay tax, I imagine most on here do. The tax I pay goes to pay for projects like HS2, my pension contributions may well also get invested in a company like this. So I am potentially part-funding the CEO's payrise twice. He drives off into the sunset with his bags of dosh after doing a shitty job and my pittance pension takes another hit.

    Does this really look like an example of a situation that doesn't affect the little people?
    Bit too late. The CEO who appears mainly responsible for this was removed in July. Having read a bit more about this it appears that a lot of the issues derive from Carillion's valuation of the work on its books. In mid-2017 it wrote down the value by around £850m with a lot of the problems being on the non-UK side of the business in the Middle-east. This followed a "review" by the new Finance Director. Though as the new Finance Director was promoted from his role as Carillion's Financial Controller then you might have expected a bit more insight before this bombshell hit. The company would have been paying dividends and raising capital on the back of the original valuation so when that folded they have been in fire-fighting mode ever since with an interim and then another new Chief Executive appointed in November.

    The old CEO probably cashed in his shares, he had 250k of them, at a far higher value than they are today and would have benefitted from the dividends paid on the overvalued company at the end of its 2016 financial year.

  14. #14

    Re: Carillion oh verge of collapse

    Quote Originally Posted by ninianclark View Post
    If Carillion go through - it will affect lots of large infrastructure projects. So the Govt / Carillion either need to find a buyer or arrange it so their creditors dont call in the debts.

    Got a couple of mates who work for Carillion on the HS2 project (waste of time / money in my opinion). Their gut feeling is that a buyer will be found to take on the existing Govt work - and everything else will go.

    ps - Accenture dont have a very good job in Govt IT delivery - least not on the big one I worked , they had to give the contract away to a competitor.
    They got 43 thousand employees, what type of wages are your mates are , are they likely to receive favourable pensions , got one chap nearby worker / engineer driving a lovely top end range rover ?

  15. #15

    Re: Carillion oh verge of collapse

    Quote Originally Posted by life on mars View Post
    They got 43 thousand employees, what type of wages are your mates are , are they likely to receive favourable pensions , got one chap nearby worker / engineer driving a lovely top end range rover ?
    I dont know mate - but I reckon around 45k maybe , civil engineer types. They arent overly concerned - as they will go and work for whoever buys them out / takes over the contract. Seems to happen a lot in the construction / IT industry.

    There is pension fund is deficit of 500m , but I know he has another pension setup (SIPP) and they both have rental properties they let out.

    SkyNews earlier saying the UK end of it is sound, the problems seem to stem from valuations they put on overseas work Carillion were doing - it wasnt worth as much as they thought. Over valuation, over investment, over paid a dividend - hence they are now in debt. The Govt quite rightly wont bail them out, administration in the morning. Someone will buy up those UK contracts - guilt edged juicy Govt contracts.

    I heard that Costain would be one of them - dont know if they are that big though.

  16. #16

  17. #17

    Re: Carillion oh verge of collapse

    And guess what! It’s failure means “the government will have to provide funding to maintain the public services run by Carillion”.

    Guess I was right.

  18. #18

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Mambo View Post
    I dont know mate - but I reckon around 45k maybe , civil engineer types. They arent overly concerned - as they will go and work for whoever buys them out / takes over the contract. Seems to happen a lot in the construction / IT industry.

    There is pension fund is deficit of 500m , but I know he has another pension setup (SIPP) and they both have rental properties they let out.

    SkyNews earlier saying the UK end of it is sound, the problems seem to stem from valuations they put on overseas work Carillion were doing - it wasnt worth as much as they thought. Over valuation, over investment, over paid a dividend - hence they are now in debt. The Govt quite rightly wont bail them out, administration in the morning. Someone will buy up those UK contracts - guilt edged juicy Govt contracts.

    I heard that Costain would be one of them - dont know if they are that big though.
    I think the bigger problem is the lack of competition to these huge contracts , governments are under huge pressure to get the cheapest British deal , aligned with penalties costs , that exclude smaller construction companies ,very worrying trend , its like the left are pushing inwards and the right are aware of failure and blame,perhaps a halt to HS2 , and major infrastructures could be a welcomed choice and just concentrate on hospital /school builds only.

    I'm sure the government will be blamed for others inefficient decisions , however the lack of UK choice Is probably why they got into bed with Carillion , other than that its off shore companies , and we know what the press will say about that ,a s the per the outrage of the french /Chinese building nuclear plants.

    You cant win

  19. #19

    Re: Carillion oh verge of collapse

    They were never the same after Fish left them.....

  20. #20

    Re: Carillion oh verge of collapse

    Quote Originally Posted by life on mars View Post
    I think the bigger problem is the lack of competition to these huge contracts , governments are under huge pressure to get the cheapest British deal , aligned with penalties costs , that exclude smaller construction companies ,very worrying trend , its like the left are pushing inwards and the right are aware of failure and blame,perhaps a halt to HS2 , and major infrastructures could be a welcomed choice and just concentrate on hospital /school builds only.

    I'm sure the government will be blamed for others inefficient decisions , however the lack of UK choice Is probably why they got into bed with Carillion , other than that its off shore companies , and we know what the press will say about that ,a s the per the outrage of the french /Chinese building nuclear plants.

    You cant win
    HS2 has to be the biggest bollocks ever. I really can’t see how 10 mins difference in getting to London from Cardiff is worth all the money being spent on it

  21. #21

    Re: Carillion oh verge of collapse

    Quote Originally Posted by life on mars View Post
    I think the bigger problem is the lack of competition to these huge contracts , governments are under huge pressure to get the cheapest British deal , aligned with penalties costs , that exclude smaller construction companies ,very worrying trend , its like the left are pushing inwards and the right are aware of failure and blame,perhaps a halt to HS2 , and major infrastructures could be a welcomed choice and just concentrate on hospital /school builds only.

    I'm sure the government will be blamed for others inefficient decisions , however the lack of UK choice Is probably why they got into bed with Carillion , other than that its off shore companies , and we know what the press will say about that ,a s the per the outrage of the french /Chinese building nuclear plants.

    You cant win
    For the Times: 'Ministers dismissed warnings on failing firm Carillion' - but still handed out lucrative contracts to them.

    Could the reason be that Carillion donates to the Tory party? If not, why give contracts to a failing business? Of course this government should be blamed.

  22. #22

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Auntie Andy View Post
    For the Times: 'Ministers dismissed warnings on failing firm Carillion' - but still handed out lucrative contracts to them.

    Could the reason be that Carillion donates to the Tory party? If not, why give contracts to a failing business? Of course this government should be blamed.
    I don't know that depth of details relating to funding political parties, I do the workers unions fund other political parties .

    If it wasn't them who in your view should have been handed the contract this size , there are very few companies about .

    I'm no Tory ,but its too easy to blame Goverments, at least as its a private firm its shareholders and banks that get hurt not hefty tax paying subsidies , I'd jyst postpone the madness that us HS2 but they won't as tgey will get "we hate northerners " bleats , as I say you cant win .

    Once again the pension commitement raises its ugly head as with steel workers have these benefits and wage scales been over egged and demanded, to the detriment of younger people looking now for job futures ,that's a better debate as it appears unsustainable.

  23. #23

    Re: Carillion oh verge of collapse

    Quote Originally Posted by life on mars View Post
    I don't know that depth of details relating to funding political parties, I do the workers unions fund other political parties .

    If it wasn't them who in your view should have been handed the contract this size , there are very few companies about .

    I'm no Tory ,but its too easy to blame Goverments, at least as its a private firm its shareholders and banks that get hurt not hefty tax paying subsidies , I'd jyst postpone the madness that us HS2 but they won't as tgey will get "we hate northerners " bleats , as I say you cant win .

    Once again the pension commitement raises its ugly head as with steel workers have these benefits and wage scales been over egged and demanded, to the detriment of younger people looking now for job futures ,that's a better debate as it appears unsustainable.
    I don’t have the answers as I am not an expert in this field. That’s what MP’s and their advisors are paid to do surely. What I do know though is that it stinks. This article adds to that.

    https://www.theguardian.com/business...ns-of-millions

  24. #24

    Re: Carillion oh verge of collapse

    Quote Originally Posted by life on mars View Post
    I don't know that depth of details relating to funding political parties, I do the workers unions fund other political parties .

    If it wasn't them who in your view should have been handed the contract this size , there are very few companies about .

    I'm no Tory ,but its too easy to blame Goverments, at least as its a private firm its shareholders and banks that get hurt not hefty tax paying subsidies , I'd jyst postpone the madness that us HS2 but they won't as tgey will get "we hate northerners " bleats , as I say you cant win .

    Once again the pension commitement raises its ugly head as with steel workers have these benefits and wage scales been over egged and demanded, to the detriment of younger people looking now for job futures ,that's a better debate as it appears unsustainable.
    You have been doing an impeccable impersonation for a few months now.

  25. #25

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Eric Cartman View Post
    You have been doing an impeccable impersonation for a few months now.
    There are many sides to these type of events and it seems to me only certain aspects can be debated .

  26. #26

    Re: Carillion oh verge of collapse

    Quote Originally Posted by life on mars View Post
    There are many sides to these type of events and it seems to me only certain aspects can be debated .
    It is all on the table.

    What isn't being debated that you would like to?

  27. #27

    Re: Carillion oh verge of collapse

    Something that is not so narrow in view as blame Goverments for everything, it's such a weak answer.

  28. #28

    Re: Carillion oh verge of collapse

    Quote Originally Posted by life on mars View Post
    Something that is not so narrow in view as blame Goverments for everything, it's such a weak answer.
    But in this case the truthful answer

  29. #29

    Re: Carillion oh verge of collapse

    Quote Originally Posted by life on mars View Post
    Something that is not so narrow in view as blame Goverments for everything, it's such a weak answer.
    Spoke to my mate today - they had a phone conf this morning re the situation. Tomorrow they carry on as normal re work. Needless to say no one is giving them credit anymore - so travel expenses they have to use their own credit cards - and claim it back - the company credit card strangely doesnt work anymore.

    Youre right though, if anyone saw the complexity , red tape and the cost of preparing these tenders etc - you would honestly come to the conclusion - it is a bad decision to even bother trying. Which is why there is so little competition.
    MP's wont have a clue (any who suggests otherwise is drunk).
    The margins that Carillion are working off are tiny, so small that 1 Feck up / delay and they wont make any money.

    The problems they have stem from an over valuation of the value of the works on the books, this led to lots of equity investment = share price hike, they paid a dividend they shouldnt have - and now the chickens are home to roost. That is all by the by though.

    The UK work part of Carillion is fine - it seems it's the overseas stuff that did for them, a big projects they had lots of payments delayed, which didnt help.

    Anyone who says a nationalised company could do any better - I would beg to differ - as you would have the same people running the show (they'd just be employed by the Govt instead of Carillion), if a project was delayed the Govt would have no comeback - you cant sue yourself, if the workers go on strike - you are stuck with them - no competition, also pretty sure under EU law all bids must go out to tender.

    So where does that leave us ?
    Ever since Tony Blair exploded the PFI loop hole large public sector projects have used PFI, as it means the full cost never went on the balance sheet. I think PFI needs to stop - and be replaced with what - I dont know.

    Need to accept that we as a country need to pay more for large construction projects (tax increases). I wouldnt be surprised to see 'Virgin Builders' from Richard Branson be setup and take over HS2.

    HS2 etc cant be cost justified in my opinion - we have better things to spend it on, same goes for cutting the overseas aid budget in half.

  30. #30

    Re: Carillion oh verge of collapse

    Quote Originally Posted by life on mars View Post
    Something that is not so narrow in view as blame Goverments for everything, it's such a weak answer.
    The thing that alarms me is how accepting people are of behaviour that harms others when it is engaged in by a person in power in the private sector. It is like a sliding scale - when an individual harms people they are prosecuted, when a public sector official harms people they are likely to face criticism and potential sanctions but when a private sector leader makes decisions that negatively affect millions of people they are practically untouchable. This is born from the idea that there are two different types of money, public money and private money. Manipulative nonsense of course but it helps to enable the bad eggs in the private sector from having to adhering to the same moral (and potentially legal) code as the rest of us. It also allows our dear leaders to tell us that the people of this country should have absolutely no say in what is deemed to be acceptable and unacceptable behaviour within the private sector – as long as they break no current laws then they didn’t do anything wrong (and any attempt to say – ‘hold on, we can always change the law’ is shouted down as extreme left rubbish). Unfortunately some companies have become as big as governments (unelected of course), so there is no escape, no choice and no competition. Could I (as a UK taxpayer) choose not to use Carrillion if I didn’t agree with their practice? No, my overlords in parliament have made that choice on my behalf and that is why the government have questions to answer!

  31. #31

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Auntie Andy View Post
    But in this case the truthful answer
    "The Govt" were desperately trying to help Carillion grow (which creates jobs) - which is why they were handing them large UK infrastructure projects. If they had awarded those contracts to ACS or Zech etc I'm assuming people on this thread would be going mad at the UK Govt for NOT giving contracts to UK based companies ? - so 'the Govt' are damned if they Do and damned if they Dont.

    A Public Limited Company screwed up because they over valued their work, which led to equity being bought, a dividend which should not have been declared - was declared - and the rest is now history etc.

    Hargreeves and Lansdown (who I have a pension with) held over 9% of Carillion stock - so they have taken a massive hit I believe. HL interview all the CEO's and finance directors and ask them detailed questions re their stock, their debts, their turnover etc etc - you cant stop someone being economical with the economic truth - which is why they normally have accountants / business managers etc go through their figures - it seems even HL missed the issues - until it was too late.

    Just blaming the Govt all the time for everything from the weather to the football results obliviously fits a rather narrow minded closed political mindset. The road to hell is paved with good intentions - which is where Carillion, The Govt, pension funds, banks now find themselves.

    Having said all that - those projects will be completed and the employees will no doubt be split into the companies that take over the projects - but time will tell, my mate on the HS2 project is back to work as normal today - I'll update here though - if he gets sacked, transfers to a new Co or just carries on as normal.

  32. #32

    Re: Carillion oh verge of collapse

    Time for a change Eric, maybe a not for profit type setup like Welsh Water for large projects in the future perhaps



  33. #33

    Re: Carillion oh verge of collapse

    Time for a change , Ive got a couple of mates on the HS2 project - they find out later this week if they get paid or not, company credit cards no longer accepted, paying for their own hotels - and a mortgage and 3 kids to look after

  34. #34

    Re: Carillion oh verge of collapse

    Quote Originally Posted by ninianclark View Post
    "The Govt" were desperately trying to help Carillion grow (which creates jobs) - which is why they were handing them large UK infrastructure projects. If they had awarded those contracts to ACS or Zech etc I'm assuming people on this thread would be going mad at the UK Govt for NOT giving contracts to UK based companies ? - so 'the Govt' are damned if they Do and damned if they Dont.

    A Public Limited Company screwed up because they over valued their work, which led to equity being bought, a dividend which should not have been declared - was declared - and the rest is now history etc.

    Hargreeves and Lansdown (who I have a pension with) held over 9% of Carillion stock - so they have taken a massive hit I believe. HL interview all the CEO's and finance directors and ask them detailed questions re their stock, their debts, their turnover etc etc - you cant stop someone being economical with the economic truth - which is why they normally have accountants / business managers etc go through their figures - it seems even HL missed the issues - until it was too late.

    Just blaming the Govt all the time for everything from the weather to the football results obliviously fits a rather narrow minded closed political mindset. The road to hell is paved with good intentions - which is where Carillion, The Govt, pension funds, banks now find themselves.

    Having said all that - those projects will be completed and the employees will no doubt be split into the companies that take over the projects - but time will tell, my mate on the HS2 project is back to work as normal today - I'll update here though - if he gets sacked, transfers to a new Co or just carries on as normal.
    I am not sure it is the Govts responsibility to help any particular UK company operating in this sector to grow though it should have a role in ensuring the health of that sector more generally. In fact Carillion's unhealthy appetite for growth seems to have been a contributory factor so helping them grow may have done no favours.

    It is a legitimate question whether the government would have been better served in widening the mix of companies getting direct contracts on major infrastructure and service by setting the strategic procurement framework for the use of more nimble medium and small enterprises. One consequence of Carillion's collapse is a greater concentration of these contracts in fewer hands. Companies like Serco and Capita hoovering up outsourced service contracts and their share prices increasing accordingly. That said PFI contracting was here long before the May government and was particularly unhealthily embraced by the Blair and Brown governments after its introduction under Major.

    The government's policy of transferring work and assets to the private sector should not be above scrutiny over its consequences in this case. It might be argued that awarding £2 billion of contracts after three profit warnings was an unwise act and prioritised keeping the company afloat over the interests of the taxpayer. It also seems an error of judgment by the Cameron government to appoint the Carillion Chairman as Corporate Responsibility advisor given events, though someone in the May government deserves credit for getting rid of him off taxpayer's books in 2016.

    I think the government does deserve credit for the way it has handled the issue thus far. It did not throw in with the banks or a discredited company and looks to have chosen the least worst option. As you say the main buck should fall with the failed management of the company for its strategy, commercial incompetence and lack of transparency. There are companies operating in the same environment that are more sustainably managed.

  35. #35

    Re: Carillion oh verge of collapse

    Apparently the head of carillion was a Tory donor, and a personal advisor to Cameron and then May on corporate responsibility.

  36. #36

    Re: Carillion oh verge of collapse

    I thought you had me on ignore???

    I’m delighted your mates have got jobs to go to today. However I don’t think the smaller companies who are owed millions by Carillion are whooping and hollering today! I’ve lost count of the number of business owners who have been on the radio/media reporting they have had to lay staff off because of the incompetence and greed of those at the top of these organisations.

    And spare me the nonsense about how this government is not partly to blame.

  37. #37

    Re: Carillion oh verge of collapse

    That went well, didn’t it. STINKS!

  38. #38

    Re: Carillion oh verge of collapse

    What we dont know is how hoodwinked the people were when the due diligence took place ,or how component it was carried out , until then we need to see where this takes us , lets be fair they are huge company and until recently we saw them as big player in that market , I note the share price rose today

  39. #39

    Re: Carillion oh verge of collapse

    Carillion directly employed around 20,000 workers, all of whose jobs are now under threat. However, that figure is dwarfed by those employed in the firm’s supply chain, where as many as 30,000 small businesses are thought to be owed money.

    Andy Bradley, managing director of Cambridge-based landscaping company Flora-tec, said he has had to lay off 10 of his 90 workers because he is owed nearly £1m by Carillion. “We’ve got a profitable business but we can’t trade out of a black hole of £1m,” he told the Guardian.

    https://www.theguardian.com/business...staff-collapse

    Looks like the ordinary working man is suffering to me.

  40. #40

    Re: Carillion oh verge of collapse

    Quote Originally Posted by Mambo View Post
    Time for a change , Ive got a couple of mates on the HS2 project - they find out later this week if they get paid or not, company credit cards no longer accepted, paying for their own hotels - and a mortgage and 3 kids to look after
    I think we need a change in the prevailing attitude of the nation Conveyor belt of scandal after scandal and the thing they all have in common is the central characters appear to be needlessly greedy. We accept it though. The word aspiration has become attached to the accumulation of money, it is what we are all programmed to want.

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