Carillion

[Filo]

Gone into liquidation this morning, I feel for the 20k employees that will probably be shafted by this in more ways than one. I bet the bigwigs there have creamed their bonuses off first though

[Hounslowrover]

Three profit warnings, shareholders receiving dividends, government still awarding contracts, now taxpayers to pick up the tab. You couldn't make it up with this government.  Private good, public bad!!

[Hounslowrover]

Filo looks like we posted together on this, same thoughts!

[big fat yorkshire pudding]

I have lots of words. I'll post them on time but obviously still can't.

Happy Monday 😔

[ian1980]

It’s also all the sub contractors that will have thousands of pounds owed to them that they are unlikely receive.

I would suspect that there’ll also be quite a lot of smaller businesses that also collapse who can’t stand the losses they are likely to be hit with.

[Glyn_Wigley]

It's a bit odd that they're saying that the big problem has been other companies not paying them leading to the crippling cash flow that's led to this. If that really was the case I'd have expected them to go into administration (to manage those assets) rather than straight to liquidation.

[Filo]

Carrilion fuel cards bouncing at filling stations, the smart employees with an eye on the news would have filled to the brim over the weekend

[big fat yorkshire pudding]

Carrilion fuel cards bouncing at filling stations, the smart employees with an eye on the news would have filled to the brim over the weekend

Depends. Some staff will do a lot of miles so will fill up each day e.g. mobile engineers, cleaners and probably hr this week.

I will pay via cash if I need more.

[Sprotyrover]

Mate in prison service says they had all their maintenance staff TUPE across to Carrilon then nowt got done as jobs / repairs needed  were, 'Not Part of the Contract'. He is looking forwards to getting his maintence team back and stuff getting done properly again.

[Filo]

Carrilion fuel cards bouncing at filling stations, the smart employees with an eye on the news would have filled to the brim over the weekend

Depends. Some staff will do a lot of miles so will fill up each day e.g. mobile engineers, cleaners and probably hr this week.

I will pay via cash if I need more.

Did n't tealise you were a Carrilion employee, theres wider implications for other company's employees here, for instance my lad did security work for a company called Servest, they have a lot of contracts to provide security on construction projects, will they lay their staff off now for fear of not being paid?

[roversdude]

Must be strange being told to keep attending work but being unsure if you’ll get paid

[big fat yorkshire pudding]

Must be strange being told to keep attending work but being unsure if you’ll get paid

Slightly, but then you have a loyalty to your colleagues and friends.  7.5 years later it's not something you walk away from easily (nor do many have a choice given they have mortgages etc to pay).

That, plus despite what the media may say the employees have a commitment to delivering a service (to their credit).  Those that work in schools probably have kids there, those at hospitals have probably used them.  Despite what many in the media say, at the front line it's all about doing the job effectively, not shareholder profit (as some say to make their political points stack up).

[StocktonRover]

I have lots of words. I'll post them on time but obviously still can't.

Happy Monday 😔

BFYP - I also have plenty to say about this situation but at the moment can’t say much.
It’s a really horrible time for the affected staff because of the uncertainty despite the assurance that staff, agency support and sub contractors will be paid for all services carried out with effect from 7am this morning.
There is however no guarantee for money’s owed prior to that.

I sit on the other side of the table to yourself and this has been coming for quite a long time.
I’ve had regular dealings with a plethora of Senior management within Carillion - many of who are great strategists but have no idea about delivery at the sharp end or operational challenges.
The amount of senior managers is phenomenal - I regularly attend meetings where there are 3 or 4 directors in attendance (all of whom are on 6 figure reward packages (pay and benefits) and obscene individual and team bonuses).

A huge factor in this and many other FM contracts is the deliberate low balling of tender submissions to win the work with ambitious and unrealistic expectations of the level of income from variable costs, particularly if the contract is managed to a good standard.

Because of the complexity of the Carillion portfolio, it will take a litttle while before the Cabinet Office can roll out a solution across all contracts for Governemnt departments, but most staff will end up in continued employment on the same T&Cs in the short and medium term.

I hope it works out well for you and would hate to deal with the uncertainty.

[The Red Baron]

https://wolfstreet.com/2018/01/15/collapse-of-carillion-sparks-fear-and-mayhem/

The sound of chickens coming home to roost. Not that that is any comfort to the people unfortunate enough to be affected by this.

[wilts rover]

Despite what many in the media say, at the front line it's all about doing the job effectively, not shareholder profit (as some say to make their political points stack up).

Terrible news and my heart goes out to you and anyone else involved in this who have no share of the blame whatsoever. In particular the suppliers and sub-contractors who are not going to be protected, what will happen to them? There were some heart breaking - and revealing - stories on the phone in shows this morning.

You might think it is point scoring BYP but what this aptly demonstrates is that private companies do not run public services for public benefit - they run them for the benefit of shareholders and executives. Carillion have been in trouble since 2015. In 2016 the chief exec recieved a salary of £1m plus £500 000 bonus. Which he kept after being forced to stand down following the profit warning in July 2017 - along with his salary until October 2018! When these people should have been putting money in to the company - they were taking it out and now you see the result.
https://www.theguardian.com/business/2018/jan/15/carillion-highly-inappropriate-pay-packets-criticised

[big fat yorkshire pudding]

I have lots of words. I'll post them on time but obviously still can't.

Happy Monday 😔

BFYP - I also have plenty to say about this situation but at the moment can’t say much.
It’s a really horrible time for the affected staff because of the uncertainty despite the assurance that staff, agency support and sub contractors will be paid for all services carried out with effect from 7am this morning.
There is however no guarantee for money’s owed prior to that.

I sit on the other side of the table to yourself and this has been coming for quite a long time.
I’ve had regular dealings with a plethora of Senior management within Carillion - many of who are great strategists but have no idea about delivery at the sharp end or operational challenges.
The amount of senior managers is phenomenal - I regularly attend meetings where there are 3 or 4 directors in attendance (all of whom are on 6 figure reward packages (pay and benefits) and obscene individual and team bonuses).

A huge factor in this and many other FM contracts is the deliberate low balling of tender submissions to win the work with ambitious and unrealistic expectations of the level of income from variable costs, particularly if the contract is managed to a good standard.

Because of the complexity of the Carillion portfolio, it will take a litttle while before the Cabinet Office can roll out a solution across all contracts for Governemnt departments, but most staff will end up in continued employment on the same T&Cs in the short and medium term.

I hope it works out well for you and would hate to deal with the uncertainty.

That's a conversation for a month or so's time isn't it.  Done some work on contracts all over the UK so I probably have experienced some that are in your area.

Wilts, think it's fair to say anyone who picks up rewards in a failing business has a lot of questions to answer.

[BillyStubbsTears]

Shocking news for the employees and sub-contractors.

And it looks like very bad misjudgement from the Govt.
https://mobile.twitter.com/Peston/status/953014165618286592

Edit:

And some very serious questions to be asked of Carillion’s directors.

https://mobile.twitter.com/Peston/status/952872450110492672

[Filo]

And the small firms are already being thrown to the Wolves


http://www.bbc.co.uk/news/business-42695661

[Sprotyrover]

Cabinet meeting this morning,best idea will be t dig up Lord Hanson so he can buy Carilion for a £1 million asset strip it and walk away with £. 3 Billion.

[Sprotyrover]

Cabinet meeting this morning,best idea will be t dig up Lord Hanson so he can buy Carilion for a £1 million asset strip it and walk away with £. 3 Billion.

Andy Bradley from SME Flora Tec was just on telly explaining how the £1 million owed to him by Carililion will cause his company out of business.

[Filo]

Cabinet meeting this morning,best idea will be t dig up Lord Hanson so he can buy Carilion for a £1 million asset strip it and walk away with £. 3 Billion.

Andy Bradley from SME Flora Tec was just on telly explaining how the £1 million owed to him by Carililion will cause his company out of business.

And that is why those massive bonuses should be clawed back and recover money from their pension pot if needed, there should be no teward for failure

[Filo]

Some lads i know who work on the railway had their vans taken off them

[StocktonRover]

Vans were almost certainly on leases and have been reclaimed by lease company after consideration by the administrators.

Not many companies own their vans - you often see the lease companies name on the van as well as the contractors.

In this way they are not a company asset and as such can’t be sold off by the administrator.

[Filo]

Vans were almost certainly on leases and have been reclaimed by lease company after consideration by the administrators.

Not many companies own their vans - you often see the lease companies name on the van as well as the contractors.

In this way they are not a company asset and as such can’t be sold off by the administrator.

I understand, but how can they turn up for work like the Government says if they have n't got a van?

[albie]

This might be the tip of the iceberg.

PFI contracts priced to high risk construction projects are heavily back end loaded in terms of return to investors. The corollary is lower early gains multiplied by greater gains down the line after the construction phase is complete.

Great article with refs by George Monbiot in the Guardian on the hazards of PFI finance for public infrastructure projects;
https://is.gd/xrgBE0

Some of these deals are going to put great pressure on Council Tax bills to meet the payback terms in future years.  My old folks were against buying stuff on the never never.

Same old story...at least the head honcho has not had to go without, eh!

[StocktonRover]

Vans were almost certainly on leases and have been reclaimed by lease company after consideration by the administrators.

Not many companies own their vans - you often see the lease companies name on the van as well as the contractors.

In this way they are not a company asset and as such can’t be sold off by the administrator.

I understand, but how can they turn up for work like the Government says if they have n't got a van?

There is a bit of process to get around here.
As the lease deal for the vans was raised by Carillion prior to the governments statement to pay for services after 7am Monday, the lease company are at great risk of not getting paid. If they take them back and a new short term lease is agreed (underwritten by government) they will definitely get paid going forward. They may get the same vans back soon under a lease agreement that will see the provider paid.

[bobjimwilly]

eye-opening article here: https://medium.com/@graceblakeley/carillions-missing-millions-9090a6ee84d8

how the CEO and finance director can earn > £1million in the year prior to the 1st profit warning is beyond belief!

This para hits the nail on the head:

"The cabal of outsourcing firms like Carillion, Serco, and Capita don’t add any value to the economy. They merely act as arbiters between a Government that lacks the desire or capacity to do proper public procurement and the suppliers that end up doing the work, extracting millions from taxpayers in the process."

[big fat yorkshire pudding]

eye-opening article here: https://medium.com/@graceblakeley/carillions-missing-millions-9090a6ee84d8

how the CEO and finance director can earn > £1million in the year prior to the 1st profit warning is beyond belief!

This para hits the nail on the head:

"The cabal of outsourcing firms like Carillion, Serco, and Capita don’t add any value to the economy. They merely act as arbiters between a Government that lacks the desire or capacity to do proper public procurement and the suppliers that end up doing the work, extracting millions from taxpayers in the process."

Personally I find that well out of order.  Lots of people have done a lot of good and to say no value is added is at best factually incorrect.

Very easy to say these things when you don't understand what the company does or how it works.

There's a lot of staff very frustrated by the vast amount of incorrect and in some case lies spouted by the media, politicians etc.

[StocktonRover]

BFYP
I guess that the criticism may be misplaced in respect of some of the Carillion contracts (perhaps including the ones you’re involved in) but I assure you that it is appropriate on others.

I’m aware of some cynical preparation for liquidation by Carillion in the way it placed very senior staff from a contract that had reached its end (and who didn’t qualify for TUPE) onto a different contract still in place even though the staff moved had a pseudo role with no true purpose on the new contract.
They also moved Helpdesk staff from the same contract onto other contracts vastly surpassing the number actually required for the same reasons.

This was blatantly done to avoid redundancy payments and with the end result to burden the taxpayer with the problem of making those staff redundant in the future or finding something for them to do in the full knowledge the company was unlikely to survive.

[StocktonRover]

Just to be clear, I don’t think any criticism can be levelled at the staff delivering the work at the client end but the senior management is by and largely deserving of the criticism which will all become clearer as the facts are made public following the inquiries planned.