Royal Mail’s losses are worsening and CWU should get on to Acas

theguardian.com:

Fat cat bosses holding workers to ransom? Yes, you can understand why the Communications Workers Union is screaming blue murder. Royal Mail’s threat of 10,000 job losses is one way to harden minds during an industrial dispute over pay and working practices.

But the CWU’s leaders would be wise to reflect on a few financial realities. First, Royal Mail is definitely in a deep and deepening financial hole. It has been bizarre in recent weeks to hear Dave Ward, general secretary of the union, question Royal Mail’s claim to be losing £1m a day. Quoted companies do not pluck numbers out of thin air in their stock market statements, or not usually. In fact, Friday’s statement showed the position to be even worse: the six-month loss was £219m.

That figure, plus a projected loss of £350m for the full year, may feel unreal because Royal Mail made operating profits of £416m within a group-wide outcome of £758m last year. But the massive downwards swing only underlines the size of the boost from lockdown and Covid last time. The underlying trend is still a fall in letter volumes, intense competition in parcels and a need to become more efficient on that parcel side in normal trading conditions.

Second, a major round of redundancies is not the most dramatic manoeuvre at the board’s disposal. A break-up of the parent group, called International Distribution Services since ten days ago, would be. Royal Mail would be separated from GLS, the non-UK parcels business run out of Amsterdam and the bit that currently makes all the money. There is still a question of whether UK politicians would permit a break-up but, since it would be GLS that would be leaving, it’s not obvious that new national security powers could prevent it. Under a split,