Carillion

BobQ

Mr_Curious wrote: »

There are many schools of thought here and I'm just interested in peoples opinions. Do you let it go bust and have Xooo's of people made redundant? Does the state prop it up or just nationalise it completely? If there are (potentially lucrative) contracts in the pipeline then would a rival not buy it? (The last point is that if it is just a management issue that has caused it to be where it is?

I'm quite naive to the intricacies of business but you can always learn something from a healthy debate.

The need for Prisons and Maintenance Services in public building etc will remain. Most likely the staff will be transferred to a new management team.

The Carillions of this world know the costs of everything and the value of nothing but they can usually undercut an existing service. Outsourcing has mostly delivered services through bearing down on staff costs and quality. Hospitals have found that to their cost. They saved on cleaning and had to accept less hygienic wards etc.

But private firms also learn the hard way too. So there was a time when BAE Systems outsourced their HR function and then years later found it cheaper to bring it back in house.

BobQ

Twopints wrote: »

It's (Kier's) contracts for HS2 are with the government (effectively) - Carillion is part of the consortium and can be replaced or removed from the consortium.

My point was about interdependence. Carillion is in trouble this month but if Kier's contract relies on Carillion how easy will it be for them to replace Carillion.

AnotherJoe

BobQ wrote: »

The need for Prisons and Maintenance Services in public building etc will remain. Most likely the staff will be transferred to a new management team.

The Carillions of this world know the costs of everything and the value of nothing but they can usually undercut an existing service. Outsourcing has mostly delivered services through bearing down on staff costs and quality. Hospitals have found that to their cost. They saved on cleaning and had to accept less hygienic wards etc.

But private firms also learn the hard way too. So there was a time when BAE Systems outsourced their HR function and then years later found it cheaper to bring it back in house.

It’s not just cost its also competence and corporate focus. I worked with one of the UKs major supermarkets a few years ago and was stunned when i discovered they had outsourced their purchasing department. Given that supermarkets only do two main things, buy and sell, outsourcing half of that seemed crazy to me, surely that should be part of their core competencies ?

Some years ago I read a book called I think the empty raincoat, by Charles handy and it was all predicated on the idea that companies would / should outsource pretty much everything. I remember thinking at the time that if a company did that, they really had nothing substantial and could be replaced very easily since they had no corporate knowledge, they had given it all away. And that companies who really understood their core business would be more successful than empty shells run by people with no real commitment other than the contract they signed.

So seems to me that the tide is turning as it becomes apparent that this is a seriously flawed concept and maybe companies like Carillion going under is a sign of this.

Thrugelmir

BobQ wrote: »

Outsourcing has mostly delivered services through bearing down on staff costs and quality.

Outsourcing has allowed fundamental change take effect in the public sector. Now that services are returning in house they are providing better value for money for the taxpayer.

Our local hospital is a Brown PFI project. I kid you not that it costs £46 to change a light bulb. Sheer stupidity. The contract exit terms are onerous which makes exit currently impossible.

Andy_L

Thrugelmir wrote: »

Our local hospital is a Brown PFI project. I kid you not that it costs £46 to change a light bulb. Sheer stupidity.

What sort of a light bulb? I can pay more than that on just one bulb

Jimmithecat

Steps taken to go into liquidation just announced by BBC

Mr_Curious

I'll be following the events and updates throughout the coming days and weeks. I'm keen to understand what caused this situation.

System

Mr_Curious wrote: »

I'll be following the events and updates throughout the coming days and weeks. I'm keen to understand what caused this situation.

And you are? The Prime Minister, a billionaire investor, someone important?

lisyloo

Clifford_Pope wrote: »

And you are? The Prime Minister, a billionaire investor, someone important?

Is special status necessary to be interested in current events?
I thought this was a discussion forum.

Arklight

PFI was one of the things I really hated about the Blair / Brown government. It was a massive debt balloon that was nothing other than one king size payday for the private sector and City.


Thank goodness New Labour and the Blairites are dead and buried and we have a Corbyn government on the way that will invest in our infrastructure, rather than just lining the pockets of the rich.