Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education

Front Page



UK Politics







Talking Point
On Air
Low Graphics

Wednesday, August 5, 1998 Published at 12:51 GMT 13:51 UK

Business: The Company File

AA axes 1,000 jobs

Firms like Direct Line have had an impact on the AA's business

The AA is to close 142 high street shops over the next 12 months with the loss of 1,000 jobs.

Some 850 shop staff will lose their jobs, together with another 150 at the company's head office in Basingstoke, Hampshire.

The BBC's Stephen Evans: 'It's now a big, fierce industry'
The motoring organisation said staff would be offered other jobs where possible, but compulsory redundancies were not being ruled out.

It said the expansion of companies such as Direct Line had had a "big impact" on its insurance business.

The AA now plans to concentrate on its core roadside breakdown assistance service and has ended its insurance underwriting venture with Eagle Star.

The AA's Home Assistance service - which deals with non-car breakdowns - has also been sold off.

Strategic move

BBC Industry Correspondent Stephen Evans: 'The AA is sharpening up its act'
The changes to the 103-year-old organisation follow a strategic review ordered last year by AA director general John Maxwell.

Mr Maxwell said: "We are totally committed to improving service in our roadside business.

"This must involve improving our cost efficiency and adapting our business to meet the changing demands of our members.

"This year we are putting an additional 20m into roadside assistance."

The AA currently employs 12,667 people, including 3,500 patrolmen and patrolwomen.

Growing competition

AA Director General John Maxwell explains why the cuts are necessary
The new approach also comes at a time when the AA, with 9.4m members, faces increasing competition in the breakdown service market.

American company Cendant has already taken over breakdown company Green Flag and is poised to buy the RAC's motoring services.

Insurance company Direct Line has also moved into the recovery service business.

Advanced options | Search tips

Back to top | BBC News Home | BBC Homepage |

The Company File Contents

Internet Links

Automobile Association

The BBC is not responsible for the content of external internet sites.

In this section

Microsoft trial mediator welcomed

Vodafone takeover battle heats up

Christmas turkey strike vote

NatWest bid timetable frozen

France faces EU action over electricity

Pace enters US cable heartland

Mannesmann fights back

Storehouse splits up Mothercare and Bhs

The rapid rise of Vodafone

The hidden shopping bills

Europe's top net stock

Safeway faces cash demand probe

Mitchell intervenes to help shipyard

New factory creates 500 jobs

Drugs company announces 300 jobs

BT speeds internet access

ICL creates 1,000 UK jobs

National Power splits in two

NTT to slash workforce

Scoot links up with Vivendi

New freedom for Post Office

Insolvent firms to get breathing space

Airtours profits jump 12%

Freeserve shares surge

LVMH buys UK auction house

Rover - a car firm's troubles