FabSwingers.com forum: What to do with Carillion?

By *LCC OP Couple
over a year ago

Cambridge

Should they be bailed out, or left to fold?

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By *rMrs Horny300Man
over a year ago

Sutton Coldfield

"Should they be bailed out, or left to fold? "

Bailed out !

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By (user no longer on site)
over a year ago

Left to fold

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By (user no longer on site)
over a year ago

Lots of jobs involved so id say bailed out but strict controls placed on them

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By (user no longer on site)
over a year ago

politicians with declared and un-declared interests in carillion makes for interesting reading...

this whole scenario shows why limited companies should not be allowed to tender for public contracts

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By (user no longer on site)
over a year ago

Difficult - a private limited company who has failed. Why they failed is because they "bought" work no profit a bad move. We can't bail out everyone so I don't know - glad I am not making the decisions. I feel sorry for the employees & their pension fund - another fine mess!

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By *illwill69uMan
over a year ago

moston

Left to fold...

And if it turns out they have continued trading while insolvent all their directors should be prosecuted to the full extent of the law and jailed when convicted.

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By (user no longer on site)
over a year ago

"Left to fold...

And if it turns out they have continued trading while insolvent all their directors should be prosecuted to the full extent of the law and jailed when convicted."
.

I'd like to see one in particular one get jail time

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By (user no longer on site)
over a year ago

Not only should it be left to fail but it's essential that big business fails and allows smaller ones to come through, it's the very essence of evolution

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By (user no longer on site)
over a year ago

But when port Talbot steal works we’re not allowed to be bailed out

So what’s the difference?

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By (user no longer on site)
over a year ago

They are a private company with shareholders...all of whom know that the value of which can go down as well as up.

While there is some moral point in ensuring the pension fund is sorted....perhaps by stripping assets and making the pension fund the number one recipient ahead of all others. The company itself should be left to fail.... the directors brought to task as appropriate and seen for the grabbing b@5t@rd5 they are.....and hung out to dry...named n shamed and not allowed to run anything else ever again.

Too many “directors” fail in job after job and just jump back on the merry go round. Worse than football managers!

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By *illwill69uMan
over a year ago

moston

"Too many “directors” fail in job after job and just jump back on the merry go round. Worse than football managers!"

No they do not...

You confuse the failure of companies that have boards put in place by financial institutions through excessive profit taking and under-investment with failure of the board members. The fact is those board members are not there to run successful enterprises, they are there to maximise their employers returns by means of asset and pension fund stripping.

And they use our money to steal our futures! LoL

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By (user no longer on site)
over a year ago

It is £1.5bn in debt. Let it fold.

Any company that has allowed it's pension fund to get £580m in the red shouldn't be allowed to trade let alone get any government contracts.

Too big to fail is no longer an option.

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By *ara JTV/TS
over a year ago

Bristol East

No money for this, no money for that- Oh Look, our chums in the city might lose out, here, take some cash

Another case of privatising the profit and nationalising the risk.

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By (user no longer on site)
over a year ago

"It is £1.5bn in debt. Let it fold.

Any company that has allowed it's pension fund to get £580m in the red shouldn't be allowed to trade let alone get any government contracts.

Too big to fail is no longer an option."

I think your right - you pays your money you take your chance. They have lost on this occasion. Sad for employees though.

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By (user no longer on site)
over a year ago

"No money for this, no money for that- Oh Look, our chums in the city might lose out, here, take some cash

Another case of privatising the profit and nationalising the risk.

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By (user no longer on site)
over a year ago

I've not read much news on this but it does remind me of in ways of Serco. I wonder if it's a common problem with outsourcing, the government cut jobs within only to outsource in some vain attempt to reduce costs, it's a false economy from the outset; but it cuts the direct number of employees from the pubic sector so is seen as a good thing until this happens.

But no, it shouldn't be bailed out

Ginger

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By *entaur_UKMan
over a year ago

Cannock

Should be left to fold. Private companies should not be bailed out with taxpayers money.

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By (user no longer on site)
over a year ago

Companies that win contracts to deliver essential public services and infrastructure projects should be required to put up a bond so if they go bust the taxpayer isn't left to pick up the pieces.

Similar to the ABTA & ATOL scheme for the travel industry.

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By (user no longer on site)
over a year ago

Not like it has any real assets,certainly the rail side is a management co,plant all hired in or subbies,even people running jobs are from agency's,what happened to Jarvis? Jobs continued to run just different co name on gate,let them go down

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By *mmabluTV/TS
over a year ago

upton wirral

"Lots of jobs involved so id say bailed out but strict controls placed on them "

To many jobs involved to let them go under sadly,it is a bit like the banks in 2008 we have no choice

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By *LCC OP Couple
over a year ago

Cambridge

"Not like it has any real assets,certainly the rail side is a management co,plant all hired in or subbies,even people running jobs are from agency's,what happened to Jarvis? Jobs continued to run just different co name on gate,let them go down "

What about the 900 schools they run, or the 50,000 homes they maintain for the military? If they go bust, who fixes them?

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By (user no longer on site)
over a year ago

What about the 900 schools they run, or the 50,000 homes they maintain for the military? If they go bust, who fixes them? "
.

Another company! It's called capitalism, the system the world runs under!!!!.

The poster above had it right, all were doing is spreading the risk for big business heads they win tails they win, that's not how it works and why the world economy is fucked up, you risk and work hard to get rewarded, you don't work hard you fail.

They didn't work hard enough and should fail, somebody else will come along to try to make that profits they couldn't.

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By *rincessvenusCouple
over a year ago

Hull

guess who is one of the directors philip green here we go again

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By *LCC OP Couple
over a year ago

Cambridge

"guess who is one of the directors philip green here we go again "

2 different people.

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By *LCC OP Couple
over a year ago

Cambridge

What about the 900 schools they run, or the 50,000 homes they maintain for the military? If they go bust, who fixes them? .

Another company! It's called capitalism, the system the world runs under!!!!.

They didn't work hard enough and should fail, somebody else will come along to try to make that profits they couldn't."

So the tax payer just pays twice. Great!

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By *ubble troubleCouple
over a year ago

Manchester

Carillion derive a lot of profit from the disastrous PFI schemes that Gordon Brown and the Conservatives have encouraged. I might be wrong but if we effectively nationalise the company at least those massively excessive PFI payments might go straight back into the public purse.

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By *ubble troubleCouple
over a year ago

Manchester

"guess who is one of the directors philip green here we go again "

It's not the BHS Phillip Green.

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By (user no longer on site)
over a year ago

"guess who is one of the directors philip green here we go again "

I refer you to my point above regards the merry go round of failure!

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By *illwill69uMan
over a year ago

moston

"Carillion derive a lot of profit from the disastrous PFI schemes that Gordon Brown and the Conservatives have encouraged. I might be wrong but if we effectively nationalise the company at least those massively excessive PFI payments might go straight back into the public purse."

Are you serious?

Tell me what the Tory history is...

Or let me tell you...

The Tories will look for the first opportunity to hive off the losses to the public purse and then pay a financial institution a huge fee to sell off the profit making parts of the business at far under market value to the very financial institutions that have driven the company to bankruptcy by their asset stripping of company and pension funds by profit taking beyond the companies means to start the lazy dance again.

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By (user no longer on site)
over a year ago

What about the 900 schools they run, or the 50,000 homes they maintain for the military? If they go bust, who fixes them? .

Another company! It's called capitalism, the system the world runs under!!!!.

They didn't work hard enough and should fail, somebody else will come along to try to make that profits they couldn't.

So the tax payer just pays twice. Great! "
.

No not really, the tax payers being the biggest creditor will be first in the queue for assets and more than likely get most of their debt back!

I feel sorry for the small firms who won't see shit all back, the only snippet of good news for them is once this shit company is out of the way there's a great big market for them to delve into

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By *ercuryMan
over a year ago

Grantham

In liquidation at 7am this morning.

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By (user no longer on site)
over a year ago

It won't just be Carrillion that goes under here.

There are thousands of Sub Contractors waking up this morning knowing that at the very least the last 1-2 months invoices will not be paid.

So the cub contract companies will not be able to pay their workforce, this is from the guy who cleans the bogs on site to the joiners, plasterers, sparkies, etc, Lost of small companies will struggle if not go under.

You watch how the upper echelon of Carrillion will walk away with as much as they can strip and walk into cushy little jobs elsewhere.

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By *ercuryMan
over a year ago

Grantham

It looks like the Goverment refused a bailout, but will appoint the Official Receiver to liquidate the Company

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By (user no longer on site)
over a year ago

Why should the tax payer be paying to subsise a large failing company, which is failing due to the ineptitude of its overpaid directors?

When a small company fails with relatively little debt, no one is expecting them to be bailed out, so why should the tax payer plough millions into a company that's inevitably going to continue to lose money and be going back to the government cap in hand again in a year or two.

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By (user no longer on site)
over a year ago

The right decision.No more bs bailouts.

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By (user no longer on site)
over a year ago

Business analyst just said on 5 live it would have been cheaper for the government to bail the company out

He had a compelling arguement to be honest

However that does not excuse the directors for allowing the company to get this much debt

Also just found out Carrillion are owed £500 million from Oman and Qatar governments, and also the UK government owe them money

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By (user no longer on site)
over a year ago

I feel for the subies.Im one myself. I've been taken before I got a penny in the pound.Its happened before it'll happen again.

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By (user no longer on site)
over a year ago

"I feel for the subies.Im one myself. I've been taken before I got a penny in the pound.Its happened before it'll happen again. "

Big business has no conscious! As so often in a big collapse the little men pick up the bill! Unfortunately some are going to probably go bust as a result

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By (user no longer on site)
over a year ago

"It looks like the Goverment refused a bailout, but will appoint the Official Receiver to liquidate the Company"

PWC appointed to liquidate assets. Number ONE priority for the capital realised MUST be to sort out the pension deficit. This will include bringing in the money owed by various governments ..... LAST people on the list should be the inept directors that have allowed this to happen.

What’s been said by the “experts” on various news channels seems to be that “most” (whatever that means) of the contracted out work will continue as the many (mainly government) contracts will still need to be completed. Let’s hope they are correct!

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By *ercuryMan
over a year ago

Grantham

PWC have been put in by the Official Receiver to manage the business.

A company of this complexity will need a lot of sorting out but Goverment contracts will presumably take priority over private contracts.

5 of the Directors were only appointed in September 2017, as huge holes in finances became apparent. I would be careful in pointing the finger at the present Board, as it seems many of the problems are more historical.

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By *oncupiscentTonyMan
over a year ago

Kent

"PWC appointed to liquidate assets. Number ONE priority for the capital realised MUST be to sort out the pension deficit. This will include bringing in the money owed by various governments ..... LAST people on the list should be the inept directors that have allowed this to happen."

Pension fund will be an unsecured creditor, big ol' hit for the pension protection fund (and the pensioners themselves).

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By *LCC OP Couple
over a year ago

Cambridge

"guess who is one of the directors philip green here we go again

I refer you to my point above regards the merry go round of failure!"

It's not the same guy. 2 seperate people called Phillip Greene

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By *LCC OP Couple
over a year ago

Cambridge

"PWC have been put in by the Official Receiver to manage the business.

A company of this complexity will need a lot of sorting out but Goverment contracts will presumably take priority over private contracts.

One of the guys put on the board to turn it around was from EY, so they will be pissed off that PWC have been assigned as the receivers.

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By (user no longer on site)
over a year ago

"I feel for the subies.Im one myself. I've been taken before I got a penny in the pound.Its happened before it'll happen again.

Big business has no conscious! As so often in a big collapse the little men pick up the bill! Unfortunately some are going to probably go bust as a result

"
The small sub contractors will go under.They won't be able to take the hit.The middle men between carrilion and the small subies will be fine.Its always the trades that will get fucked over and will be offered a penny in the pound in about a year . Standard practice in the game.

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By *ercuryMan
over a year ago

Grantham

"PWC have been put in by the Official Receiver to manage the business.

A company of this complexity will need a lot of sorting out but Goverment contracts will presumably take priority over private contracts.

One of the guys put on the board to turn it around was from EY, so they will be pissed off that PWC have been assigned as the receivers. "

Yes, I saw that. He was supposed to be a restructuring and turnaround expert. Guess that didn't turn out well then!

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By (user no longer on site)
over a year ago

[Removed by poster at 15/01/18 20:01:00]

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By (user no longer on site)
over a year ago

"Lots of jobs involved so id say bailed out but strict controls placed on them "

The DUP bribe cost the British taxpayer nearly as much to keep the shitbag tories on power

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By *ara JTV/TS
over a year ago

Bristol East

Report this afternoon in City AM that the hedge funds banked £80m shorting the shares.

Ching, ching, celebrations all round.

Meanwhile, back in the real world . . .

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By *ercuryMan
over a year ago

Grantham

"Report this afternoon in City AM that the hedge funds banked £80m shorting the shares.

Ching, ching, celebrations all round.

Meanwhile, back in the real world . . ."

They've been shorting Carillon for over six months now!

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By *anejohnkent6263Couple
over a year ago

canterbury

shame for the contractors and workers ....hope the big boys all got there bonus payments out before the big bang.....just like woollies b homestores and going back pollypeg ....fold it up

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By *ophieslutTV/TS
over a year ago

Central

Are you serious?

Tell me what the Tory history is...

Or let me tell you...

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By (user no longer on site)
over a year ago

Its now becoming apparent that the "top end" of the company have "looked after" themselves at the detriment of the rest. As one of brexits main aims is deregulation - surely this company proves we need more regulation not less? Why were generous bonus schemes allowed and dividends paid? There clearly is no control - people are getting away with fraud.

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By (user no longer on site)
over a year ago

"Its now becoming apparent that the "top end" of the company have "looked after" themselves at the detriment of the rest. As one of brexits main aims is deregulation - surely this company proves we need more regulation not less? Why were generous bonus schemes allowed and dividends paid? There clearly is no control - people are getting away with fraud."

Why is there a £600m deficit in the pension fund when dividends and bonuses were being paid out?

UK plc... rotten to the core and aided and abetted by HM Government.

Vive la révolution!

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By *ercuryMan
over a year ago

Grantham

The Official Receiver has the power to sanction and penalise those it may deem to have contributed to the demise of the company.

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By (user no longer on site)
over a year ago

The Official Receiver has the power to sanction and penalise those it may deem to have contributed to the demise of the company."

Yes but it's too late! Intervention should have happened before the company went bust. Accounts and dividends are announced annually so that's when actions should have been taken.

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By *oncupiscentTonyMan
over a year ago

Kent

The Official Receiver has the power to sanction and penalise those it may deem to have contributed to the demise of the company.

Yes but it's too late! Intervention should have happened before the company went bust. Accounts and dividends are announced annually so that's when actions should have been taken."

That comes down to the auditors though.

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By (user no longer on site)
over a year ago

The Official Receiver has the power to sanction and penalise those it may deem to have contributed to the demise of the company.

Yes but it's too late! Intervention should have happened before the company went bust. Accounts and dividends are announced annually so that's when actions should have been taken.

That comes down to the auditors though. "

KPMG again!!!

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By *oncupiscentTonyMan
over a year ago

Kent

I don't it really matters if it's KPMG PWC EY or AA if any industry needed more competition then surely it corporate auditing

(an less initialisms too!)

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By (user no longer on site)
over a year ago

"I don't it really matters if it's KPMG PWC EY or AA if any industry needed more competition then surely it corporate auditing

(an less initialisms too!) "

Agree but it's the quality of work being done. We need more regulation - it's no good having toothless regulation because it never stops. There has got to be an element of fraud here? If the audit wasn't given all the facts then it was flawed. Problem is we rely on honesty being the norm. As a recent documentary on UK bankruptcy it's all being manipulated. Hopefully this event will see positive change not spin.

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By (user no longer on site)
over a year ago

This makes interesting reading...

https://www.theguardian.com/commentisfree/2018/jan/16/pfi-bosses-carillion-money-george-monbiot

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By (user no longer on site)
over a year ago

"No money for this, no money for that- Oh Look, our chums in the city might lose out, here, take some cash

Another case of privatising the profit and nationalising the risk.

plus how the likes of phil green (no this other one) can still walk away with hundreds of thousands in pay, plus others wjo left the corrilion in October can still get paid until October 2018 is fookin disgraceful

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By (user no longer on site)
over a year ago

"No money for this, no money for that- Oh Look, our chums in the city might lose out, here, take some cash

Another case of privatising the profit and nationalising the risk.

Tory chum-ocracy in action!

The toffs squirrel away more in offshore accounts, possibly avoiding tax too, champagne all round while the workers get shafted.

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By *illwill69uMan
over a year ago

moston

"This makes interesting reading...

https://www.theguardian.com/commentisfree/2018/jan/16/pfi-bosses-carillion-money-george-monbiot

Stating the obvious but without mentioning the real aim of PFI, the transfer of wealth held in trust by the state for the benefit of the population to the wealthy for their personal personal benefit and gain.

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By (user no longer on site)
over a year ago

As the saying goes "if it looks too good to be true, then it probably is". Hinkley Power station for example. Its the consumer who will pick up the bill not the politicians.

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By *abioMan
over a year ago

Newcastle and Gateshead

the problem with the carillion situation is that they have both private sector and public sector contracts.....

so where yes you could let the private sector bits go to the wall.... what do you do with all their public sector contracts?

remember they are the people who then sub contract a lot of the stuff down for work in prisions, the millitary, schools ect ect......

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By (user no longer on site)
over a year ago

Apparently their directors were on fab most of the time and couldn’t see it coming

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By (user no longer on site)
over a year ago

It is very sad to see the sudden demise of one of the UKs great construction oompanies . Many of their engineerng feats which they achieved are ones of which we can be proud.

The key issue in this case appears to be that the government ( uk tax payer ) was given too good a deal . We now have the scenario where two other plcs ( Galliford Fry and Kier Construction ) are left to pick up the completion costs on at least one existing contact.

Problems on a number of recent large contracts created additional costs for the company .

The directors at Carillion had distinguished careers at other plcs and it is difficult to see what actions they could have taken recently to prevent what happened . Would Carillion have been allowed to walk away from loss making contracts . ? Highly unlikely . Would a rights issue have raised sufficent funding to tide the ompany through . ? Again unlikely as investors confidence had dropped due to at least three separate profit warnings ? Could more have been done to collect a substantial debt owned by Qatar ?

On the face of it , Carillion directors ( quite a few of whom were only appointed comparatively recently ) did their best to keep the company afloat and have nothing to either apologise for ( or be concerned about ) . Could anyone have done any better and if so what ?

Some may use the collapse of Carillion as an indicator that we should not engage in pfi contracts , especially as the government can borrow money more cheaper .

However while the government may be able to borrow money more cheaply , other costs are simply hidden away . A key advantage of pfi contracts is that it reveals the costs to the government immediately and risks are passed to a third party .

It would be interesting to see how the pension black hole is calculated . It is clear that many pension promises are simply unsustainable hence the closure of final salary pension schemes . There may be an arguement for allowing companies to break some of the promises made to pensioners if the payments in made by an employee are unrealistivc compared to future pension payments that they are promised . Pension deficits are not an issue that is unique to Carillion .

Any investor ( shareholder ) in Carillion will have lost everyting . There will also be a knock on effect for the shareholders of Speedy Hire , Kier Construction an Galliford Fry .

The demise of Carillion is very sad for al concerned . In theory anyone who has lost a job as a result of this will be quickly find alternative work as the contracts still have to be completed

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By *LCC OP Couple
over a year ago

Cambridge

They could have stopped paying out ever larger dividends when they were struggling financially and with a big hole in the pension pot.

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