Carrilion in trouble

[Frrair]

Obviously they knew they were in trouble and perhaps by awarding tripartite contracts (with a safety net of other two contractors having to step up in their failure) that was their was of supporting them, a healthy order book increased their chances of securing funding. said Pooh...

[citizensm1th]

Frrair said:

Obviously they knew they were in trouble and perhaps by awarding tripartite contracts (with a safety net of other two contractors having to step up in their failure) that was their was of supporting them, a healthy order book increased their chances of securing funding. said Pooh...

Well that worked well. said Owl

[SystemParanoia]

citizensm1th said:

Well that worked well. said Owl

My favourite food is owl ice cream, the gruffalo said with a gleam in his eye

[frankenstein12]

crankedup said:

As in the 2008 financial crash, much will be written for future students education. And in this case how not to run a business, no matter what your size of business might be. Arrogance is a word which comes to my mind.

Unfortunately i believe nothing of the sort will happen. Instead a committee will get together as they always do and come up with some more stupid qualifications and processes to teach students which have no application in managing a business or doing the job they are studying to do in the real world.

Without wishing to be harsh toward lecturers and teachers if they know so much about these fields why the hell would they accept the low pay and long hours when they could be making a fortune in the real world running businesses etc.

[frankenstein12]

MartG said:

This garbage is whats been really bugging me all frigging day. The government continuing to award them contracts was 100% the correct thing to do. Had the government not done so they would have gone belly up over a year ago.

You can put on your tinfoil hat and believe it was all a nasty tory scam favours for friends etc but the simple reality is that had the government stopped providing them with contracts the banks would have withdrawn funding sooner.

In terms of whether the government could have or should have done more... Well I am not a fan of governments which are incredibly inept trying to stick their oar in to the management of private companies but at the same time knowing the risks who knows maybe they should have placed the company under special government order banning them from paying out dividends and forcing immediate measures to protect the company and stop top tier mismanagement from paying themselves big paychecks.

The CEO who left with a big golden handshake should not have received a 1.5million golden handshake. The present CEO should not have had his pay protected either. I personally think there should be legislation allowing criminal charges to be brought against people like that.

[Frrair]

Perhaps in the incoming CEO know it would be a big ask to turn it around and wouldn’t have taken it on without assurance he would get paid,,,,, everyone likes to get paid.

Just perhaps the the premium deal was to take on a basket case and the flack and name calling inevitably coming his way if it couldn’t be turned around.


It’s a sad reality and shame the supply chain companies lose the most because of the extra long payment terms...

[MartG]

frankenstein12 said:

The government continuing to award them contracts was 100% the correct thing to do. Had the government not done so they would have gone belly up over a year ago.

You can put on your tinfoil hat and believe it was all a nasty tory scam favours for friends etc but the simple reality is that had the government stopped providing them with contracts the banks would have withdrawn funding sooner.

So ? The phrase 'good money after bad' comes to mind

[anonymous-user]

Frankenstein talks a lot of sense, having been involved in Govt bids for many years, from both sides and in Uk and overseas, it is very difficult not to award to the lowest bidder, providing Carrilion was the lowest bidder, and guarantees were obtained, I would not be to critical of the recent awards.
Certainly all the middle east project will have bank bonds in place to cover the cost of reassigning the contracts and disruption, typically 10% of Award Value, and payments would lag behind progress to minimize exposure. I hope the UK has the same. Plus I understand that the UK projects are awarded to consortiums with joint and several liability, so hopefully the consortium partners will step in take up many of the employs and perform the work with the minimum of disruption
With out specific facts of the contract it is hard to judge, but imagine the fuss 6 months ago if the government instead of awarding to Carrilion as the lowest bidder had awarded, to a higher bid from a foreign company.

I'm interested in how 1B pound of bank debt to subsidiaries appear to have been lost in the consolidated accounts of the holding company, ( I wonder if these are the performance bonds issued for the projects, which would be off balance sheet) and the actions of the Director's needs to be investigated, more than the governments.

[PurpleMoonlight]

frankenstein12 said:

This garbage is whats been really bugging me all frigging day. The government continuing to award them contracts was 100% the correct thing to do. Had the government not done so they would have gone belly up over a year ago.

And the Government would have less of a mess to sort out.

Public contracts and money should not be used to prop up a bad business.

[Smiler.]

frankenstein12 said:

This garbage is whats been really bugging me all frigging day. The government continuing to award them contracts was 100% the correct thing to do. Had the government not done so they would have gone belly up over a year ago.

You can put on your tinfoil hat and believe it was all a nasty tory scam favours for friends etc but the simple reality is that had the government stopped providing them with contracts the banks would have withdrawn funding sooner.

In terms of whether the government could have or should have done more... Well I am not a fan of governments which are incredibly inept trying to stick their oar in to the management of private companies but at the same time knowing the risks who knows maybe they should have placed the company under special government order banning them from paying out dividends and forcing immediate measures to protect the company and stop top tier mismanagement from paying themselves big paychecks.

The CEO who left with a big golden handshake should not have received a 1.5million golden handshake. The present CEO should not have had his pay protected either. I personally think there should be legislation allowing criminal charges to be brought against people like that.

Absolutely.

This story is going to run & run, rightly so imo.

I hope it will prompt reform in the way government & their departments deals with public sector contacts along with how companies conduct themselves.

Just because shareholders don't oppose the pay deal for a CEO doesn't make it right.

The prospect of having their grubby dealings in the public eye & profitable business curtailed by the rise of the rabid left might make them think twice.


Any back-slapping by government ministers (of any colour) & civil servants to their mates in business needs to be exposed & heads roll.

[anonymous-user]

Smiler. said:

Absolutely.

This story is going to run & run, rightly so imo.

I hope it will prompt reform in the way government & their departments deals with public sector contacts along with how companies conduct themselves.

Just because shareholders don't oppose the pay deal for a CEO doesn't make it right.

The prospect of having their grubby dealings in the public eye & profitable business curtailed by the rise of the rabid left might make them think twice.


Any back-slapping by government ministers (of any colour) & civil servants to their mates in business needs to be exposed & heads roll.

Public companies have to have their 'grubby dealings' done in the public eye.

Unfortunately this case looks like a combination of bad buyer and bad seller. Buyer accepts deals on price and timescale unlikely to be achievable and seller agrees to same.

Buying ought to be about value rather than pounds, shillings and pence cost.

[Smiler.]

janesmith1950 said:

ublic companies have to have their 'grubby dealings' done in the public eye.

Unfortunately this case looks like a combination of bad buyer and bad seller. Buyer accepts deals on price and timescale unlikely to be achievable and seller agrees to same.

Buying ought to be about value rather than pounds, shillings and pence cost.

I understand that, my comment was more that they would be higher up the news ladder. Most people in the UK would not have heard the name Carillion before this episode & even though there have been a dozen or so articles/reports in the mainstream news last 18 months, they would have largely been ignored due to lack of Trump or Kardashian.

The resulting media interest from this episode will inevitably lead to a wider inspection of similar companies & contracts. Until Trump breaks wind of course.

As for your last comment, I'd wager the civil service wouldn't know the "value" of anything. Expediency is the name of their game.

[hairyben]

frankenstein12 said:

2 sMoKiN bArReLs said:

fesuvious said:

2 sMoKiN bArReLs said:

Yipper said:

Instead, the Brits have just gone "f*ck It, they're just some scummy builders who don't wear a shiny white office shirt like me".

I was thinking you sometimes get unnecessary stick...

.....but now I think I agree with everybody else

The guy is a complete nipple.

..queue somebody to point out a nipple has uses

Apart from his comment about the british he was not far off the money unfortunately.
]

There's a whole offshoot discussion I haven't the time to inflict upon you but yes, the whole British sneering attitude as in the inability to show/have a little respect for those who weild tools is the underlying rot that precipitates the shoddyness of most of what we make.

[anonymous-user]

Watching this unfold I wondered why Carillions suppliers should be in as much trouble as is being reported.

Isn’t a basic principle of running a business to maintain good CC and to plan and allow for bad debt?

Then I see the comments from one of those suppliers:

“We've invoiced them for £240,000, going back to September last year. I don't think we'll get this money back.
"For us, it's a bad day, it'll impact us for the year. There are smaller contractors who will be impacted worse."
He added: "We've always been struggling with the Carillion culture... Their procurement people weren't good and we didn't like working for them."

So, despite the very well publicised problems, despite ‘always struggling with the C culture’, despite not liking working for them, they continued to do so.

Only one place to lay the blame with that supplier, IMO.

I wonder how many more are the same?

[Digga]

frankenstein12 said:

crankedup said:

As in the 2008 financial crash, much will be written for future students education. And in this case how not to run a business, no matter what your size of business might be. Arrogance is a word which comes to my mind.

Unfortunately i believe nothing of the sort will happen. Instead a committee will get together as they always do and come up with some more stupid qualifications and processes to teach students which have no application in managing a business or doing the job they are studying to do in the real world.

Without wishing to be harsh toward lecturers and teachers if they know so much about these fields why the hell would they accept the low pay and long hours when they could be making a fortune in the real world running businesses etc.

It would seem that, globally, economics graduates would agree that the subject is ripe for vast overhaul: http://www.rethinkeconomics.org/

As for Carillion, people also need to start looking at those in senior management who jumped ship within the last 12 to 18 months; where are they now, are they worth their salt, were they instrumental in the fk up, even culpable perhaps? The clowns who enabled this have potentially now gone off to screw up other firms. It's too late to bolt Carillion's stable door, but other firms perhaps need to do some due diligence?

[ALawson]

Construction Enquirer discussing up some big numbers.

http://www.constructionenquirer.com/2018/01/16/sup...

Van Elle to take £1.6m hit.

http://www.constructionenquirer.com/2018/01/16/car...

[aeropilot]

janesmith1950 said:

Unfortunately this case looks like a combination of bad buyer and bad seller. Buyer accepts deals on price and timescale unlikely to be achievable and seller agrees to same.

Often its the only way you can win a job, any firm that actually puts in an accurate true bid for any big project will never win it.

janesmith1950 said:

Buying ought to be about value rather than pounds, shillings and pence cost.

It should indeed...........however, back in the real world

[PurpleMoonlight]

ALawson said:

Van Elle to take £1.6m hit.

http://www.constructionenquirer.com/2018/01/16/car...

Speedy Hire owed £2M.

Ouch.

[cossy400]

Being abit grass is green to something of this scale.

the ones that are owed big money like that is just a suck it up, or will they see any portion of it?

1.6 and 2 million are not pocket change to be losing after all.

[p1stonhead]

cossy400 said:

Being abit grass is green to something of this scale.

the ones that are owed big money like that is just a suck it up, or will they see any portion of it?

1.6 and 2 million are not pocket change to be losing after all.

Pennies on the pound possible.