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Royal Mail investors meet union leaders: Attempts to negotiate an end to the bitter labor dispute that has crippled business
Royal Mail investors will meet union leaders next week to try to end the bitter labor dispute that has paralyzed the company.
The Mail understands that several major shareholders of Royal Mail’s parent company International Distribution Services (IDS) will meet in London on Monday afternoon with Dave Ward, general secretary of the Communication Workers Union (CWU), to try to find a solution.
Topics on the agenda include alternative ways of running the company, growing the company into new industries and addressing shareholder concerns about union demands.
Change of direction: Topics on the agenda include alternative ways of running the business
One person who will not be attending the meeting is Royal Mail boss Simon Thompson, who was castigated by MPs on the affairs committee earlier this week, where chairman Darren Jones said his answers raised “serious concerns” about the functioning of the group.
Another issue looming during the talks is Thompson’s future as CEO. It follows a few chaotic months for Royal Mail when strikes paralyzed the company during the crucial Christmas period and a Russian cyber-attack shut down its overseas delivery business.
It is not yet known exactly which IDS shareholders will be present at the meeting with Ward, but it is clear that a number of large investors who initially opposed the CWU are now trying to contact the union after Thompson’s lackluster performance on Monday.
A notable absentee is Daniel Kretinsky, the Czech billionaire and IDS’ largest shareholder, who owns just over 23 percent of the company through his vehicle Vesa Equity. Kretinsky, nicknamed the Czech Sphinx for his inscrutable approach to investing, is said to still support Thompson, with rumors he could advise the embattled CEO to solve the crises facing the company.
But the prospect of Thompson being ousted has sparked speculation about his possible replacement.
Martin Seidenberg, the head of IDS’ more successful international delivery division GLS, is considered a viable candidate, while there is also speculation that Thompson’s predecessor Rico Back could return to the top job. Wading in line at Royal Mail earlier this month, Back criticized the company’s board for its “confrontational” approach to the strikes.
Shareholder concerns have steadily increased as Royal Mail’s losses spiked after the disruption, with market analysts recording a loss of nearly £750m for the year to the end of March.
That represents more than £2 million a day and follows profits of £416 million last year.
Royal Mail’s projected losses are so large that it would push IDS to a loss of £290m for the year from a profit of £662m in 2022.
The eye-popping figure is also in stark contrast to GLS, which is forecast to bring in profits of £317 million this year.
IDS shares rose 3.4 percent to 221.3 pence yesterday.