As a hundred and twenty-six households in the Birmingham area were cruelly faced with an uncertain future on Christmas Eve, we see once more the damage done by casino capitalism, underpinned by the government, as the taxpayer comes to the aid of jettisoned employees.
The city’s most shocking experience of so-called ‘turnaround’ companies was in 2000 when BMW – adding a £500 million “dowry” – sold the car-making and engine manufacturing assets of the Rover Group to the Phoenix Consortium in 2000 for a token £10. Above: Phoenix’ John Towers celebrates with champagne.
Four years later the Government released a £16m report investigating the collapse of the company, renamed MG Rover. It revealed that the five executives involved took £42m in pay and pensions from the troubled firm before it went into administration in 2005. The role played by key government ministers at the time was not revealed.
Jon Moulton of City Link “will deliver the goods” – “His style is old-school investment and turnaround”
The Telegraph’s 2013 upbeat article about Jon Moulton’s acquisition of City Link – for £! – according to the Daily Mail – now makes sad reading.
Moulton had forecast that the courier could be showing a profit in a couple of months: “We can see a way forward. A lot has happened already – there are 12 substantial work streams on the way . . . “
His company, Better Capital, a ‘restructuring specialist’ which specialises in ‘distressed assets’, bought Jaeger but recently wrote down its value by £6m; earlier this year it sold Reader’s Digest, acquired for £13m in 2010, for “a nominal sum” – £1.
And the taxpayer covers redundancy payments
Administrator Ernst & Young said on Sunday that it would be referring employees to the government’s statutory redundancy payments scheme because “the company is insolvent and unable to meet these payments”.
Mick Cash, general secretary of the RMT union, has deplored the fact that a former donor to the party of government can walk away and leave the taxpayer to pick up the redundancy costs.
How many of these subsidies will be received by the so-called private sector before electors demand change?
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Our Birmingham 