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100 Days To stay in or get out? How many businesses have contingency plans in place?

Not just one vote, but two, Scotland remaining part of the UK, and the UK (what maybe left of it) remaining part of Europe.

With ex-Eastern bloc countries heading for inclusion in Europe, the UK is looking to split itself apart & away from the continent.

Not wishing to get embroiled in the rights and wrongs of either argument, how many businesses have considered the implication of either vote going the way of the separatists? How will it affect your business; do you have employees North of Hadrian’s Wall, could you cope with dual taxation systems, both for employees & trade, would you want to be bothered?

Whilst the details of either verdict will need to be thrashed out, who knows how it will pan out as we are in uncharted territory here. But, if the senior management of businesses are doing their job, they should at least consider the possible consequences, and have some sort of contingency plans in place, rather than leaving it as a panic measure if either or both votes go the way of separation.

An Uncooperative Co-Op

With this week’s announcement of Lord Myner’s departure as Chairman of the 170 year old Mutual Group, the Co-Op seems to be descending further into confusion & controversy. Weirdly, he will still continue with the review, not from within, but externally. How strange will that be? Now, no one will feel compelled to be co-operative (there’s that word again) with what some will see as damaged goods. Even the Labour Party seem to be rounding on him.

Notwithstanding the debacle of the failed take-over of Lloyds, the sacking of Paul Flowers (how was he allowed to be in that position by the authorities), it seems the business (can we still call it a business?) is staggering from one disaster to another. They have announced losses at the Bank of £1.3Bn, with losses expected for a further two years. The group may well declare a loss of close to £2Bn, and will also have to find a further £120m as their share of the Bank’s recapitalisation after declaring their part in the miss selling scandal.

Political connections also will confuse an already confused situation further, the Co-Op group gave £800k to the Labour Party last year, and many Labour MPs are also Cooperative Party members, including Ed Balls. Calls by Lord Myners to stop political donations will not have endeared him to his own party.

There were descriptions by insiders of departing Co-op chief Euan Sutherland being some latter day ‘Pol Pot’, who many believed was pushing the group to far and too fast, and Lord Myner was accused of not engaging with the members and Board. It was obvious a group of insiders didn’t want the Mutual to be in any meaningful way, so got engineered their exit.

The very cumbersome way the Group manages itself goes back to the founding Rochdale Principles laid down a couple of centuries ago, but is it applicable to such a vast collection of businesses, some of which are represented by other mutuals that compete with the parent group? There are examples of successful mutual groups, and the Co-Op would do well to mirror some of those. It was crystal clear that no one was really keeping an eye out on what went on at the Bank, his appointments seemed to be made more on the basis of Buggins’ turn rather than ability. A more professional body needs to oversee the day to day operations otherwise these failings will continue to occur.

All of this wrangling and infighting doesn’t bode well for the appointment of a new Chairman & CEO. Who would be willing to take up such a mantel (or poisoned chalice)? There are challenges, but when you embark on a mission, it’s difficult when you have both hands tied & your legs cobbled. The Co-Op have also announced they will not pay bonuses due to other ex-Executives, something else to factor in when negotiating a contract with them.

So will someone be brave enough? Of course, pay them enough, and get some guarantees of non-interference or a big pay-off, and a number of people will, but unless the group is really willing to change, it may be a futile exercise, with the possibility of it ending badly

Two Bluffs Too Far

If you are going to bluff in life, you either have to be sure the other guy’s cards are rubbish, or you can afford your bluff being called. ERC (European Rugby Cup) and Unite, both tried to call bluffs, and forgot those basic premises. Neither had the whip hand, and failed to understand that their opponents were serious in their positioning.

The basic ERC situation is explained well by BBC Rugby , ERC had assumed that neither the French nor the English would have the cojones to break away from what is the best club rugby tournament in the world. When the PRL & LNR filed notice in June 2012 they were pulling out, they still didn’t take notice. What they hadn’t planned on was that PRL would do a deal with the emerging BT Sport that would surpass the Sky deal, and offer all participants greater returns. ERC belatedly & unilaterally installed a mediator to try and negotiate a way back, but with the French & English clubs not taking part, it was doomed to failure. For the Celtic nations, the Heineken cup is vital for their survival, and without the English & French Clubs the sponsors would pull out, sounding its death knell. The Welsh Clubs have now sided with the Franglais entente, so what we are seeing from ERC is the final desperate death rattle, no more. It only leaves the details of the final demise of ERC to be worked out. The individual unions will fall into place, they cannot afford internal schisms.

Can Grangemouth survive at all in an industry that relies on cheap power, cheap feedstock, and vast economies of scale? Unite foolishly believed that Ineos would not dare to close the facility. They should have taken more note of how Jim Ratcliffe was manoeuvring them into this confrontational position. The row over union convenor Stephen Deans was merely a stalking horse for the real battle; labour costs. How is it that Unite cannot accept that these days final salary schemes are so prohibitively expensive that they cannot be maintained, and that if Grangemouth closes the under-funding of the existing pension scheme (£200m or so) will be at risk. The Scottish Government are running around trying to patch up some sort of deal, but likely buyers are not queuing up; they have quite sensibly ruled out nationalisation. It may well be that Ineos will be able to secure support & funding for the £300m they say is needed. Unite now appear to have rolled over & will accept the original deal, don’t be surprised if Ineos extract more now they have them against the ropes.

In both cases, relationships post any deal being agreed will be severely stretched, even if there is no other realistic option, but until a deal is struck, both Unite & the Celtic nations will need to be careful, neither has any cards to play anymore.

To view the current discussion and add comments of your own, just click on “Two Bluffs Too Far” above

Hinkley Point C

The Contract for the building of Hinkley Point C Nuclear Reactor has been announced, with it being the first new Nuclear Power Station to be built in the UK for over 20 years to ensure the energy security of the UK going forward. Whilst the agreed strike rate of £92.50/MWH appears high (double the current rate), over the lifetime of the project, some 35 years, should see a good and guaranteed deal. If they build a second reactor, this will fall to £89.50/MWH. Construction risk is carried by EDF & its partners. Hinkley Point C-FT Utility Week

EDF has announced the selection of the Bouygues/Laing O’Rourke JV as the preferred bidder for a contract for the civils work to build the new nuclear power station in Somerset. Bouygues/Laing O’Rourke JV

A Kier BAM joint venture has now signed contracts with EDF to carry out £100 +m of site preparation works for the nuclear power station. Kier BAM

Balfour Beatty Civil Engineering has been awarded the £30m project to build a temporary 500m jetty for construction materials to be shipped in. Balfour Beatty

Costain will provide the design and delivery of the water cooling systems for the nuclear power station worth some £250m. Costain

EDF Energy and the principal contractors Laing O’Rourke/Bouygues have signed a Common Framework Agreement enshrining direct employment for workers on site which will set a minimum craft rate of £13 an hour and along with bonus payments will make it the best paid construction site in the UK.

I think it should really have happened at least five years ago, it’s not as if we haven’t been able to predict the energy demand going forward, and it’s been all to obvious that the “green” energy options were never going to realistically fill the gap. Maybe the political will just wasn’t there.

It’s a pity that we lost our world leadership in this technology, the French have successfully managed to supply the bulk of their needs (and some of ours through the interconnector) by building the same model all over France. We just couldn’t make up our minds whether we wanted BWR, PWR, Fast Breeder or whatever; should have stuck to one type and got on with it.

The “green” options, whilst technically feasible, can’t really be run out on the same scale, or will cause harm to the environment, for instance; the Severn Tidal Barrier causing a change in the habitat profile, the visual impact large numbers of Wind Turbines have in sensitive areas (just drive from Sheffield to Manchester across the Pennines & you’ll see) as just two examples.

Whilst the Government claims 57% of the workforce (direct & indirect) will be UK workers, that still leaves a large chunk (11,000) we could have once claimed as well, but that’s the price we pay for losing our technological lead, and having to hunt around the world for sufficient finance.

To view the current discussion and add comments of your own, just click on “Hinkley Point C” above

Big Brother on a construction site?

My local High Street (Hemel Hempstead) has been undergoing a major refurbishment to make it “Enhance the historic character of the Old Town whilst improving traffic flow and pedestrian movement”. The project is running seriously late; it has been bedeviled by problems ranging from unavailability of materials, difficult ground conditions & unknown tombs discovered in the car park (whilst the town has a great history connected with Henry VIII, it was no-one with Royal blood like Leicester).

After telling the local traders that they were shutting the road for seven weeks, not surprisingly there was uproar at the council liaison meeting. To avoid a complete breakdown in local council/trader relationships they have come up with a revised plan that will allow the businesses to trade as usual, including offering some minor financial assistance, so that by Christmas the Street will be “open as usual” with finishing works starting again in the New Year.

Interestingly, Herts County Council (the project leader) have just announced that they have reached agreement with the Contractor to put in CCTV cameras to monitor the progress of the work. Is this unusual, or will it become the norm? What next, will they put up CCTV in the Project Office, the Council Office? How far will it go?

Herts CC & DBC

BBC News

Construction Enquirer

To view the current discussion and add comments of your own, just click on “Big Brother on a construction site?” above

Costa Concordia

The raising of the Costa Concordia has to rank as one of the most impressive feats of non-standard engineering ever accomplished. To take an unknown situation, devise a plan to account for any eventualities, and then successfully carry out the plan to achieve a result few would have bet on, must have taken an incredible amount of planning, teamwork & shear ingenuity not seen too often.

Costa Concordia salvage operation: as it happened

Even the London Mayor, Boris Johnson is using it to point to seminal moment in time, when the bad times end, and through good project management, turn the situation round and start moving towards better times.

Boris Johnson: Britain’s economy has had its ‘Costa Concordia’ moment

Anybody able to point to similar sorts of achievements? To view the current discussion and add comments of your own, just click on Costa Concordia above.