carillion

[armsid]

i see that gov. contractor Carillion  is in financial trouble and the gov. has put in place fallout procedures if help is not given. Why can,t  the company be helped by gov.and jobs and contracts saved .The new hospital in liverpool is in danger of not being finished amongst other projects your comments /views please

Edited January 14, 2018 by armsid

[bluesj]

Maybe the  share holders should be putting up some cash before us tax payers 

[panoma1]

Because it's a private company! When they are making a profit the shareholders share the dosh....when they make a loss these same shareholders try to abdicate responsibility expecting the general public (via government funding) pick up the debt....no thanks!

 

[walshie]

9 minutes ago, panoma1 said:

Because it's a private company! When they are making a profit the shareholders share the dosh....when they make a loss these same shareholders try to abdicate responsibility expecting the general public (via government funding) pick up the debt....no thanks!

 

Spot on! 

[Whatmuff]

The company has a shocking track record and for one has failed in every way with military contracts and the major share holders have pulled their investments and subsequantly the share price has plumeted. I hope the Government let's this company fall into the ground and all the share holders/billionaires be held responsible and pay for the pension deficit towards it's employees. It's about time the Government stops bailing out these private firms and banks and start to hold people responsible. It's never the Executives or Shareholders that loose it's always workers and customers that loose out. I am a customer of Carrilion and their service is **** full stop.

[Yellow Bear]

They should be treated the same way they have treated their subcontractors over the years - those that have dealt with them will know exactly what I mean.

[Konnie]

1 hour ago, panoma1 said:

Because it's a private company! When they are making a profit the shareholders share the dosh....when they make a loss these same shareholders try to abdicate responsibility expecting the general public (via government funding) pick up the debt....no thanks!

 

This if you dabble in shares you buy into the company, so when it gambles you roll the dice too, should be able to strip shareholders of assets too, then people would be more careful on how their investment is managed.

[ditchman]

1 hour ago, bluesj said:

Maybe the  share holders should be putting up some cash before us tax payers 

i think the company should make its own way....and the shareholders should stump up...............the miriad of contracts they have will go on hold for a while but will be picked up by others..

totally agree with all the other posts................

[matone]

Let it crash & burn .The gov were unable to help other core industries they said,so this is no different.

[Old farrier]

Anyone think they should find the £125000000 shortfall in the pension fund before they crash and burn 

or at the very least explain where the ££ is 

just wondering 

all the best 

of 

[TIGHTCHOKE]

I think they should employ Sir Phillip Green as their consultant to advise on sorting out the pension scheme!

[amateur]

2 hours ago, Yellow Bear said:

They should be treated the same way they have treated their subcontractors over the years - those that have dealt with them will know exactly what I mean.

An interesting point made on R4 this morning was that the NHS et al should deal with the subcontractors directly to save the situation 

[JohnfromUK]

4 hours ago, armsid said:

i see that gov. contractor Carillion  is in financial trouble and the gov. has put in place fallout procedures if help is not given. Why can,t  the company be helped by gov.and jobs and contracts saved .The new hospital in liverpool is in danger of not being finished amongst other projects your comments /views please

Firstly it isn't a "gov. contractor".  It is a private company (limited liability company) with a large number of contacts here and overseas.  The Government is one among many customers.

The company has been badly managed and has built up debts and a pension fund deficit, which the banks are now worried about (i.e. can they ever be repaid) and will not allow the debt to keep increasing.  Hence they are rumoured to have declined to lend more.  Shareholders (I assume) also have no confidence in the management (hence the tumbled share price) and therefore will not invest more.  If no more money is found, the company is likely to go into liquidation.

As a limited liability company, the liquidator will firstly try and find a buyer as a going concern for all or part of the business - and if that fails, will sell the assets of the company to pay off the creditors.  There is a defined order of those being paid under law (with the revenue effectively at the top I think), but with large debts there will be a lot of creditors who receive very little or nothing - and it all takes a long time to untangle.  I do not know where the pension plan stands in the order of precedence.

The question that should be asked is why it has been allowed to get to this point - and the Government have continued to let contracts to a company who have clearly been very financially 'stretched' for a long time.  In times of higher interest rates, this would have come to a head much sooner.  As a limited liability company, the shareholders have no additional liability to creditors, and neither do the management/directors (unless they have committed some breach of law).

In the event that the liquidators are called in, they will do their best to run the company as a going concern during the winding up process and 'sell off' existing contracts that have value - which may well be offered to sub-contractors.  However one has to ask if there is any value to those contracts because they may have been let with so slim a margin as to be near worthless (which I suspect is the route cause of the whole situation).

Edited January 14, 2018 by JohnfromUK

[stumfelter]

4 hours ago, Yellow Bear said:

They should be treated the same way they have treated their subcontractors over the years - those that have dealt with them will know exactly what I mean.

I have been a subcontractor to them in the past and to be honest they couldn't run a bath, too many chiefs and not enough Indians springs to mind!

[figgy]

Should be left to fail. Other companies will pick up the work. I still can’t see why government isn’t building its own hospitals and looking after its own services. No profit margins needed for shareholders and any profit back into the coffers. 

[Medic1281]

9 minutes ago, figgy said:

 I still can’t see why government isn’t building its own hospitals and looking after its own services. No profit margins needed for shareholders and any profit back into the coffers. 

Usually because MP’s are usually major share holders in the companies? 

[silver pigeon69]

13 minutes ago, figgy said:

Should be left to fail. Other companies will pick up the work. I still can’t see why government isn’t building its own hospitals and looking after its own services. No profit margins needed for shareholders and any profit back into the coffers. 

If they did this then the board of directors/advisors etc of the companys, who also happen to be MP's and familly of MP's would not get their very large salarys/commisions. I wonder if they would get the contracts with their inflated prices if they wern't on the boards??

Edit: Medic beat me to it!

Edited January 14, 2018 by silver pigeon69

[JohnfromUK]

22 minutes ago, figgy said:

Should be left to fail. Other companies will pick up the work. I still can’t see why government isn’t building its own hospitals and looking after its own services. No profit margins needed for shareholders and any profit back into the coffers. 

I agree it should be left to fail. As you say, other companies will pick up the work.

Governments have proved very poor at running projects (but so it seems have Carillion) - just look at Government IT projects.  Civil servants have the wrong training for running businesses.   Basically Carillion has done poorly, but many other companies succeed.  It is rare to find a 'business' run by Government (in reality Civil servants) that does well because they are never properly held accountable for their financial performance.  IF Carillion was a nationalised organisation now, more money would be injected without dealing with the root cause.

 

Edited January 14, 2018 by JohnfromUK

[hambone]

Having worked for a part of the Carillion group over the past 18 months I can't say that this is a shock. The levels of bad management, incompetence and cronyism has to be seen to be believed.   I do not think any private company should be bailed out by the government but hope the bulk of the workforce get toupee'd over to a new employer and the sub contractors carry on with the work as normal.

[Yellow Bear]

25 minutes ago, hambone said:

Having worked for a part of the Carillion group over the past 18 months I can't say that this is a shock. The levels of bad management, incompetence and cronyism has to be seen to be believed.   I do not think any private company should be bailed out by the government but hope the bulk of the workforce get toupee'd over to a new employer and the sub contractors carry on with the work as normal.

And the subbies might actually get paid in full and in time.

[silver pigeon69]

1 hour ago, hambone said:

Having worked for a part of the Carillion group over the past 18 months I can't say that this is a shock. The levels of bad management, incompetence and cronyism has to be seen to be believed.   I do not think any private company should be bailed out by the government but hope the bulk of the workforce get toupee'd over to a new employer and the sub contractors carry on with the work as normal.

I beleive that the EU rules wont allow a government to bail any one out?

[hambone]

2 minutes ago, silver pigeon69 said:

I beleive that the EU rules wont allow a government to bail any one out?

The EU rules also prevent state help in the steel industry....Except for the Italians and Germans 

[Whitebridges]

Disgusting state of affairs. 

Headlines:  Carillion runs vital services for the NHS , the Army  and is helping to build the HS2 rail link.

Carrillion has a £600m back hole in its pension scheme and £900m in debts.

it maintains 50k homes for the ministry of defence.

Emplys 43k staff worldwide . 20k are in Britain.

Main creditors are Barclays, Santander and HSBC.

 

I hope it burns and we realise that certain things need to to kept and managed in house and never contracted out to the fly boys. 

Good night.

[Whitebridges]

3 hours ago, figgy said:

Should be left to fail. Other companies will pick up the work. I still can’t see why government isn’t building its own hospitals and looking after its own services. No profit margins needed for shareholders and any profit back into the coffers. 

Precisely figgy. It’s proven that you can’t just contract everything out and not manage it with a rod of iron. 

[Whitebridges]

5 hours ago, JohnfromUK said:

Firstly it isn't a "gov. contractor".  It is a private company (limited liability company) with a large number of contacts here and overseas.  The Government is one among many customers.

The company has been badly managed and has built up debts and a pension fund deficit, which the banks are now worried about (i.e. can they ever be repaid) and will not allow the debt to keep increasing.  Hence they are rumoured to have declined to lend more.  Shareholders (I assume) also have no confidence in the management (hence the tumbled share price) and therefore will not invest more.  If no more money is found, the company is likely to go into liquidation.

As a limited liability company, the liquidator will firstly try and find a buyer as a going concern for all or part of the business - and if that fails, will sell the assets of the company to pay off the creditors.  There is a defined order of those being paid under law (with the revenue effectively at the top I think), but with large debts there will be a lot of creditors who receive very little or nothing - and it all takes a long time to untangle.  I do not know where the pension plan stands in the order of precedence.

The question that should be asked is why it has been allowed to get to this point - and the Government have continued to let contracts to a company who have clearly been very financially 'stretched' for a long time.  In times of higher interest rates, this would have come to a head much sooner.  As a limited liability company, the shareholders have no additional liability to creditors, and neither do the management/directors (unless they have committed some breach of law).

In the event that the liquidators are called in, they will do their best to run the company as a going concern during the winding up process and 'sell off' existing contracts that have value - which may well be offered to sub-contractors.  However one has to ask if there is any value to those contracts because they may have been let with so slim a margin as to be near worthless (which I suspect is the route cause of the whole situation).

A very good summary of the whole thing . So what do you think of the whole debacle? My view is that it must never be repeated.