Blackpool Automotive and a little fat man
Discussion
I've read with interest the discussions about the move to put Blackpool Automotive into admistration, very soon after it had been sold off. This will result in redundancies, with the costs picked up by the government, whilst the prime assets (the brand, moulds etc.) will continue.
What is interesting is that as far as I can see, Little Chef did exactly the same financial 'trick' today and yet is being hailed as an "excellent deal that keeps the Chef smiling".
http://news.google.co.uk/news?q=littl
The background is that Little Chef was bought by leveraged debts, the assets were then sold and leased back to pay those debts, and there is a clear £10m+ profit on a £60m investment after just 12 months for the company that 'made it go bust'.
By doing this trick, Little Chef can get rid of the poor performing assets overnight without any expense, and then continue to trade as if nothing happened at the "profitable" sites.
See the parallel with TVR getting rid of it's problematic assets (i.e. the Blackpool site) but continue with the 'profitable' bits (brand, designs, S&M etc.)?
It is funny how the same process gives two different sets of news coverage...
J
What is interesting is that as far as I can see, Little Chef did exactly the same financial 'trick' today and yet is being hailed as an "excellent deal that keeps the Chef smiling".
http://news.google.co.uk/news?q=littl
The background is that Little Chef was bought by leveraged debts, the assets were then sold and leased back to pay those debts, and there is a clear £10m+ profit on a £60m investment after just 12 months for the company that 'made it go bust'.
By doing this trick, Little Chef can get rid of the poor performing assets overnight without any expense, and then continue to trade as if nothing happened at the "profitable" sites.
See the parallel with TVR getting rid of it's problematic assets (i.e. the Blackpool site) but continue with the 'profitable' bits (brand, designs, S&M etc.)?
It is funny how the same process gives two different sets of news coverage...
J
cobdoo said:
BossCerbera said:
joust said:
...continue with the 'profitable' bits (brand, designs, S&M etc.)?J
I don't believe NS & Cº got the "profitable bit" out though.
No but I think he's trying as we post......
Great, I hope - and trust - PKF stripe him good and proper. More money they draw in, the more there is to share out.
DJC said:
Doesnt the LC deal though give the company a chance to keep some of the sites going and a lot of the staff employed?
Yes, and it ruthlessly ejects the "unprofitable" staff and tosses them to one side leaving the government to pick up the tab. It seems to me all the 'profitable' staff in TVR are still happily employed, whilst the unprofitable ones that used to make the cars aren't. See the parallel?
J
BossCerbera said:
joust said:
...continue with the 'profitable' bits (brand, designs, S&M etc.)?J
I don't believe NS & Cº got the "profitable bit" out though.Clearly given the company information RayVon posted here www.pistonheads.com/gassing/topic.asp?t=340040&f=13&h=0&p=2
BA had significant financial losses from 03-04. I wouldn't have expected the situation to have improved since then, and hence BA is effectivly worthless to NS now.
Seems he's done a quite normal 'clearout' job using administration to remove that large negative shareholder funds from his balance sheet. Goes on 100's of times per day, every day.
J
joust said:
DJC said:
Doesnt the LC deal though give the company a chance to keep some of the sites going and a lot of the staff employed?
Yes, and it ruthlessly ejects the "unprofitable" staff and tosses them to one side leaving the government to pick up the tab. It seems to me all the 'profitable' staff in TVR are still happily employed, whilst the unprofitable ones that used to make the cars aren't. See the parallel?
J
The parallel for me doesnt work, if for no other reason than scale. In the case of TVR, the "profitable" bit and its employees/shareholders/stakeholders call em what you will, are just St. Nic, DO & co, whilst *all* of the normal employees are in the can. In the LC case, some employees are canned, but more than a few are retained, i.e. the company can remain trading, serving breakfasts, doing what it does etc. In TVR's case, "business as usual" is simply not true, as that would imply employees making cars, etc, etc, which they are not doing. Now I see your pt, that in an idea world LC would offer redundancy to those who get canned, downsize the company, take the financial hit and carry on as best they could. The situation has been quite clearly portrayed though as not being a financially viable option, so it was either All Close or do it this way, in which case some ppl get shafted, but others keep their jobs...normal employees and higher ups. Now if in the bigger picture, govt picks up the redundancy tab from the shafted employees, but keeps tax revenues coming in from a company still afloat and employeed ppl, or a company cant afford to pay redundancy and carry on trading so it goes completely down the chute and everybody goes on the unemployed list, I suspect the company and the govt will choose the former.
In no way am I saying or judging on anything as regards the moral context of the above, just making an observation.
BossCerbera said:
joust said:
BossCerbera said:
joust said:
...continue with the 'profitable' bits (brand, designs, S&M etc.)?J
I don't believe NS & Cº got the "profitable bit" out though.The IP - as far as I can tell - still belongs to BA.
Phil, Im almost certain the rights to the 3 initials TVR are tucked up safe with St. Nic.
I will clarify when I speak to the man from the NWDA in the next cpl of days. As to whether those 3 initials are up for sale also is shrouded in obsfucation and isnt for discussion on here atm.
DJC said:
joust said:
DJC said:
Doesnt the LC deal though give the company a chance to keep some of the sites going and a lot of the staff employed?
Yes, and it ruthlessly ejects the "unprofitable" staff and tosses them to one side leaving the government to pick up the tab. It seems to me all the 'profitable' staff in TVR are still happily employed, whilst the unprofitable ones that used to make the cars aren't. See the parallel?
J
The parallel for me doesnt work, if for no other reason than scale. In the case of TVR, the "profitable" bit and its employees/shareholders/stakeholders call em what you will, are just St. Nic, DO & co, whilst *all* of the normal employees are in the can. In the LC case, some employees are canned, but more than a few are retained, i.e. the company can remain trading, serving breakfasts, doing what it does etc. In TVR's case, "business as usual" is simply not true, as that would imply employees making cars, etc, etc, which they are not doing. Now I see your pt, that in an idea world LC would offer redundancy to those who get canned, downsize the company, take the financial hit and carry on as best they could. The situation has been quite clearly portrayed though as not being a financially viable option, so it was either All Close or do it this way, in which case some ppl get shafted, but others keep their jobs...normal employees and higher ups. Now if in the bigger picture, govt picks up the redundancy tab from the shafted employees, but keeps tax revenues coming in from a company still afloat and employeed ppl, or a company cant afford to pay redundancy and carry on trading so it goes completely down the chute and everybody goes on the unemployed list, I suspect the company and the govt will choose the former.
In no way am I saying or judging on anything as regards the moral context of the above, just making an observation.
HI DJC,
The only real difference is that Little Chef has close to a monopoly on its business (you can't build new sites and licenses are controlled), plus the demand to stop at those sites and eat food has not gone away.
Thus, it still has value to an entity who can run it differently. They will chop out the individual sites that are loss making (maybe lease them out to comptitors) and they will cut staff as staff will be one of their largest overheads and while they rebuild the business, change suppliers they will need to hold back overheads. One difference here is that LC staff can be brought in in seconds so they can scale up freely as and when.
Now, if foreign firms had come in to the UK and built a different set of motorways with better service stations on them LC would have needed to adapt their product and raise the quality or they would be folding now with no asset value so to speak of.
A little bit rambling (sorry) but I hope you get my drift.
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