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Wednesday, 12 December, 2001, 12:17 GMT
Consignia clashes with the unions
John Roberts, Consignia, and John Keggie, CWU
John Roberts of Consignia vs. the CWU's John Keggie
Consignia's announcement that it may cut up to 30,000 jobs has shocked and dismayed union leaders. BBC News Online reports on what has been said by both sides in this increasingly bitter dispute.

John Roberts, Consignia

The revelation that Consignia may cut the jobs was made late on Tuesday by Consignia's chief executive John Roberts before the House of Commons Trade & Industry Select Committee.

Mr Roberts told the MPs that thousands of jobs needed to be eliminated over 18 months in an effort to cut costs by 1.2bn.

We haven't finalised numbers we are looking at if we produce the 1.2bn. We could be looking at anything up to 30,000 redundancies

John Roberts
When the Select Committee asked Mr Roberts what the scale of the losses would be, he replied:

"We haven't finalised numbers we are looking at if we produce the 1.2bn. We could be looking at anything up to 30,000 redundancies."

He hoped many of the losses would be made through natural wastage and then voluntary redundancy.

Cost-cutting measures

Cutting 1.2bn would bring Consignia in line with its international competitors, Mr Roberts also told the committee.

He blamed the decline in Consignia's profits on weak economic conditions and delays on the railways, following the Hatfield crash.

Further cost-cutting would be achieved by transferring mail from the trains to transport by road and air, he said.

In addition, Mr Roberts explained that the unprofitable parcel service for non-business customers would no longer be run by Parcelforce.

Instead, it will be handed to the Royal Mail as part of its universal obligation to offer a universal letter delivery service.

No more second post

Mr Roberts also said Consignia hoped to save money by scrapping the second post for residential mail - as announced previously.

While the Post Office worked flat-out to deliver a first post between 0700 and 0930, most European postal services delivered between 1000 and 1600, he said.

The company dedicates 30% of its resources to a second post which only represents 4% of the mail volume, he added.

Asked whether the company's problems showed that the semi-privatised status it was granted last year was not working, Mr Roberts said:

"It is too soon to say, after just 12 months... I do have concerns, but I would have thought we have to give it another 12 months."

John Keggie, CWU

John Keggie, deputy general secretary of the Communication Workers' Union, expressed his dissatisfaction with Consignia's announcement, calling the figure of 30,000 a "Harry Potter figure".

He told BBC Breakfast News on Wednesday morning:

"It could have been avoided and it will be avoided. There is no way that the public or indeed our membership can sustain 30,000 job losses.

This will wreck service throughout the country and quite frankly I don't think the public or indeed our membership will stand for it

John Keggie
"We are deeply disappointed that Consignia announced this yesterday through the Select Committee and gave no indication to the union that we were discussing job losses in this manner.

"This will wreck service throughout the country and quite frankly I don't think the public or indeed our membership will stand for it."

Biting the bullet

When asked whether the job cuts were inevitable and should have been made a long time ago, he responded:

"The post office provides an excellent service to many parts of the country. Unfortunately because [Consignia wouldn't] invest in sustained employment in many areas, such as London, the service has deteriorated.

"We are being affected by competition but we are still the best and want to remain the best - and cutting 30,000 jobs will make us the worst.

"The main shareholders, the government, I'm sure will take a view on this."

Too many strikes

Speaking on the company's history of industrial action, he said:

"This is a convenient excuse for Consignia but the facts of the matter are for 40 years - with the same workforce that we now blame - [Consignia] made massive profits.

"In the last two years, since the consultants came into Post Office, the losses have occurred."

He added that he hoped the union would not have to strike, and certainly would take no action before Christmas.

But he would not rule out action early next year if the union needed to defend the industry.

The BBC's David Harrison
"Consignia hopes to make the job cuts through natural wastage"
John Keggie of the CWU
"This will wreck service throughout the country"
John Roberts, chief executive of Consignia
"30,000 is very much an indicitative could well be a lot less"
See also:

12 Dec 01 | Business
Post unions to fight job cuts
11 Dec 01 | Business
Consignia to cut up to 30,000 jobs
12 Dec 01 | Business
Q&A: The Post Office Crisis
12 Dec 01 | Business
UK unemployment rises
26 Nov 01 | Business
UK post operator loses 1.5m a day
03 Oct 01 | Business
Consignia cuts 1bn to stem 'crisis'
13 Jul 01 | Business
Consignia to axe 2,100 jobs
26 Jun 01 | Business
Post office jobs warning
31 May 01 | Business
Consignia considers outsourcing deal
09 Jan 01 | Business
UK Post Office name change
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