Companies going bankrupt/into administration

Potemkin Villager · Post by **Potemkin Villager** » 13 Jan 2018, 17:24

adam2 wrote:Looks as though the end is near for Carillion.

http://www.bbc.co.uk/news/business-42675427

Surely they are too big to fail?

vtsnowedin · Post by **vtsnowedin** » 13 Jan 2018, 17:44

Potemkin Villager wrote:
adam2 wrote:Looks as though the end is near for Carillion.

http://www.bbc.co.uk/news/business-42675427
Surely they are too big to fail?

Not much information there about how a company that big and on so many different government teats is losing money?

Potemkin Villager · Post by **Potemkin Villager** » 13 Jan 2018, 18:01

vtsnowedin wrote:
Potemkin Villager wrote:
adam2 wrote:Looks as though the end is near for Carillion.

http://www.bbc.co.uk/news/business-42675427
Surely they are too big to fail?
Not much information there about how a company that big and on so many different government teats is losing money?

It sounds as if a lot of money may have "mysteriously" sailed over the event horizon....

raspberry-blower · Post by **raspberry-blower** » 13 Jan 2018, 19:23

raspberry-blower wrote:Going?

Carillion in crisis as contract bungles Â£845m deal

Six months on this looks increasingly likely

The loss, which sparked the first of three profit warnings, was blamed on an Â£845m hit taken on contracts that were rendered unprofitable by rising labour and raw material costs.

The downturn has left the business facing a Â£900m debt pile that dwarfs the value of the company, forcing it to go cap in hand to lenders in the hope of agreeing a restructuring of its finances

Guardian: Carillion Crisis - fears Government contractor on verge of collapse

What this highlights is the folly of the "Neoliberal doctrine" that private companies and private finance can do things better and more cheaply whilst maintaining a good quality service. You can perm 2 out of 3 but not all 3!

The rules of the game are thus:
The cheapest bidder wins - irrespective of whether or not it is the best value for money,
This process puts monetary value above all else, even if it actually endangers life (see the Grenfell Tower disaster for details)

That is it.

What has happened in many council and Government contracts is that bidding companies - such as Carillion - would discount certain aspects of their bids or chronically squeeze their subcontractors in order to secure contracts. Then there would be the inevitable cost overruns that have resulted from delays in procurement, delivery, etc

These projects come in either behind schedule or massively over the original costs quoted - quite frequently both.

A failure of this magnitude is inevitable

johnhemming2 · Post by **johnhemming2** » 13 Jan 2018, 20:52

raspberry-blower wrote:A failure of this magnitude is inevitable

If the state runs everything you still have failures, but they tend to be hidden.

woodburner · Post by **woodburner** » 13 Jan 2018, 22:27

Thatâ€™s ok, at least the taxpayers are not feather-bedding the so called risk-takers and their shareholders. As for the pension fund investors, itâ€™s high time they stopped paying fast and loose with peoples money aided by clumsy politicians such as Gordon Brown.

Virgin is now running away from the east coast trains as they canâ€™t screw enough money, whereas it turned a decent income when it was publicly owned.

cubes · Post by **cubes** » 13 Jan 2018, 23:15

From the FT (Link doesn't require subscription) https://outline.com/ydKWa4.

Carillion lenders reject restructuring plan, call for government to step in

Banks crying to the government - "We don't want to lose or risk our money - bail us out". What's the betting that this happens?

woodburner · Post by **woodburner** » 13 Jan 2018, 23:56

Snouts either in trough or up arses.

johnhemming2 · Post by **johnhemming2** » 14 Jan 2018, 07:58

woodburner wrote: As for the pension fund investors, itâ€™s high time they stopped paying fast and loose with peoples money aided by clumsy politicians such as Gordon Brown.

The pensions issue arises from defined benefits pensions underwritten by the company. As interest rates go down the pension fund goes into deficit.

That is why many companies no longer offer defined benefits pension funds.

Post by **kenneal - lagger** » 14 Jan 2018, 17:23

cubes wrote:From the FT (Link doesn't require subscription) https://outline.com/ydKWa4.
Carillion lenders reject restructuring plan, call for government to step in
Banks crying to the government - "We don't want to lose or risk our money - bail us out". What's the betting that this happens?

Cubes, that link only takes me to the Outline front page which then requests the original URL for the FT article. Can you provide that please?

Post by **kenneal - lagger** » 14 Jan 2018, 17:35

Having lived through the era of nationalised companies in the UK I can remember just why most people were quite happy to see everything nationalised. They were just awful and were even worse when we had a Labour government as the "workers" expected "there own" government to line their pockets when they were voted in! When Labour didn't they went on strike so we went from bad service to no service at all.

We seem to have gone from one extreme to the other as suggested in the Archdruid blog quoted elsewhere on this forum. I await someone who can come up with a way of working which gives workers a fair wage, customers a good service and which doesn't cost a fortune. Both Socialism and Capitalism seem unable to achieve all three at once.

cubes · Post by **cubes** » 14 Jan 2018, 20:43

The link is https://www.ft.com/content/8b500eee-a61 ... 0ba8376a07

copy and paste that into outline.

PS_RalphW · Post by **PS_RalphW** » 15 Jan 2018, 07:53

Carillon liquidated.

Post by **kenneal - lagger** » 15 Jan 2018, 11:03

cubes wrote:The link is https://www.ft.com/content/8b500eee-a61 ... 0ba8376a07

copy and paste that into outline.

Thanks, Cubes.

raspberry-blower · Post by **raspberry-blower** » 15 Jan 2018, 13:44

It's gone!

BBC: Carillion goes into receivership