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Royal Mail’s screwed

Daniel Kretinsky, dubbed the “Czech sphinx” for his inscrutable approach to investing, will be free to increase his Royal Mail stake to more than 25pc after Grant Shapps, the new Business Secretary, ruled that this would not raise security concerns.

The announcement – which paves the way for Mr Kretinsky to buy enough shares for a takeover bid – was followed by explosive exchanges between the company and trade union leaders, who are now threatening a rolling wave of strikes to wreck deliveries over Christmas.

Mr Kretinsky is thought to be supportive of existing plans by Royal Mail executives to end Saturday letter deliveries following a dramatic decline in the amount of post sent. The change will require an act of Parliament, because Royal Mail’s obligations are enshrined in law.

The 500-year-old company wants to turn its attention to parcels instead, where it is struggling to compete with the likes of Amazon.

Well, it’s damn near entirely screwed unless. Unless what? Unless:

There is another business out there though – parcel delivery. Given growth in online shopping, this could be adapted into a viable and most profitable business.

But the key here is “adapted”. That requires flexibility. For what DHL, or Uber, or Doordash, is offering this week will aid in determining what Royal Mail – sorry, IDS – should be offering in order to gain Amazon’s, or Boohoo’s, business. The flexibility to adapt to beat the competition.

Flexibility to adapt will always be lacking at Royal Mail if IDS is not in charge of what the workers do, when they do it, and how they do it.

It is, currently the Communication Workers Union in charge of all of that and they’re not being flexible. For, why should they? The union reps have a cushy number and they’re not responsible – nor even accountable to – the profit and revenue numbers, so why should they want to change?

Now, yes, this does read like some political rant from the Thatcherite side. But the IDS share price gets weaker every time the union threatens to strike.

So, let’s take this from the alternative angle. While the short-term results of trying to crush the union would be profit damaging, it is at least possible that crushing it would leave the business more competitive.

They’ve got to screw the union. Get all St Maggie on it. Not just screw it, crush it.

8 thoughts on “Royal Mail’s screwed”

  1. IDS has to provoke a national strike (or some equivalent with national impact), as that is what makes the legally binding agreement with the union null and void. But they have to do it in such a way that a leftie activist judge (but I repeat myself) can’t say was deliberate. If the union manages to stick to rolling actions and last out until the likely Labour government, who knows?

    What’s the compensation for nationalisation? More than the share price near or during a strike?

  2. I ended up working for the Royal Mail for a short while after spending time travelling round Europe.
    Was staying with sister for a little, up on the Wirral and thought I’d better get some gainful employment whilst I decided what next to do. Which is how I ended up spending the summer as a temporary postman.

    Bloody hard work too, back when they had two deliveries.You really had to hustle to get done on time.But at least when you finished your second walk you were done for the day.

    Beginning of the month was always soul destroying when you came in to find a pile of Cable & Wireless magazines literally as tall as you, as well as an avalanche of other junk mail that you had to deliver. Even back then it was obvious that regular mail was never going to be a money maker – junk mail was seen as the way to make ends meet.

    Anyway, to the point of my story – very first day, me and the other new starter were rather discombobulated to find that there was a bust up between one of the regular posties and ‘the management’. Everybody downed tools and walked out – very much like a 70’s rerun.

    Me and the other lad to the manager (bearing in mind we weren’t part of the union at that point) –
    “What do we do?”.

    Managers answer – a disinterested shrug, “Suit yourself”.

    So, everybody chilled while Union reps from over the water (Liverpool) were called. Lots of mumbling and grumbling from all concerned (and nobody grumbles more than a scouser). End result – no score draw. Everbody goes home.

    Next Day – twice as much to deliver, great!

    Lesson learned – Royal Mail Management and Union Reps deserve each other – both equally useless.

  3. Lesson learned – Royal Mail Management and Union Reps deserve each other – both equally useless.

    Ditto. I was a postie in the spring/summer of 1988, so got caught up in the national strike. As the strike was merely union cuntishness and I was young and idealistic, I crossed picket lines and presented management with a dilemma – there was undelivered mail, there was a van and someone who knew the rounds. They didn’t like it when I reminded them that wilful delay of mail was a crime. Needless to say I wasn’t popular with either side; it was quite unpleasant for me when the strike ended. Luckily I had other work lined up.

    I did get one letter through. For my neighbour. A credit card bill . . .

  4. When the German govt! privatised the Bundespost they allowed it to buy up its rivals. I think they own DHL now…

    One of the parcel companies they bought was DPD – then called Deutsche Paket Dienst which rather sounds like the Stormtroopers were going to break down your door to deliver that nice hat you saw on Zara.

  5. “500-year-old company”

    Er. It’s 53. It was a government department until 1969, with the Postmaster General having a Cabinet seat.

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