AA and union talks 'constructive'

A quarter of the AA's staff have been axed since the 2004 takeover

Trade union leaders and private equity firm Permira have held "constructive talks" over pay and working conditions at the motoring group AA.

The two also agreed to "consult further and to seek to build a constructive dialogue," they said in a statement.

Unions have criticised private equity firms for destroying jobs. But Permira said its investment boosts business.

The talks came about after Permira boss Damon Buffini wrote to the GMB saying he wanted to "set the record straight".

During the discussions the GMB had urged Mr Buffini to raise wages, end a culture of "bullying and harassment" as well as "enforced overtime" at the AA.

Criticism

Union officials say AA workers deserve to share in higher profits at the firm.

Private equity groups - which use clients' cash and borrowed money to buy companies and make them more profitable - have come under fire in recent months.

Permira itself drew criticism for its decision to cut 3,000 jobs, a quarter of the workforce, at the AA after taking over the UK's biggest motoring organisation in 2004.

Meanwhile, Birds Eye - which Permira took over last year - shed 490 of its 1,250 UK staff when it closed its Hull factory.

Private equity firms have also recently hit the headlines amid concerns about the levels of debt being taken on by them for takeover deals - especially when interest rates are tipped to rise.