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Potemkin Villager
Joined: 14 Mar 2006
Posts: 998
Location: Narnia
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 Posted: Sat Jan 13, 2018 6:24 pm Post subject: |
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Surely they are too big to fail?
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"Test to destruction: engineers like to do that. Only with a test to destruction can you find the outer limits of a system's strength".Kim Stanley Robinson |
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vtsnowedin
Joined: 07 Jan 2011
Posts: 4720
Location: New England ,Chelsea Vermont
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| Posted: Sat Jan 13, 2018 6:44 pm Post subject: |
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| Potemkin Villager wrote: |
Surely they are too big to fail? |
Not much information there about how a company that big and on so many different government teats is losing money? |
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Potemkin Villager
Joined: 14 Mar 2006
Posts: 998
Location: Narnia
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| Posted: Sat Jan 13, 2018 7:01 pm Post subject: |
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| vtsnowedin wrote: | | Potemkin Villager wrote: |
Surely they are too big to fail? |
Not much information there about how a company that big and on so many different government teats is losing money? |
It sounds as if a lot of money may have "mysteriously" sailed over the event horizon....
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"Test to destruction: engineers like to do that. Only with a test to destruction can you find the outer limits of a system's strength".Kim Stanley Robinson |
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raspberry-blower
Joined: 14 Mar 2009
Posts: 1610
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| Posted: Sat Jan 13, 2018 8:23 pm Post subject: |
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Six months on this looks increasingly likely
| Quote: | The loss, which sparked the first of three profit warnings, was blamed on an £845m hit taken on contracts that were rendered unprofitable by rising labour and raw material costs.
The downturn has left the business facing a £900m debt pile that dwarfs the value of the company, forcing it to go cap in hand to lenders in the hope of agreeing a restructuring of its finances
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Guardian: Carillion Crisis - fears Government contractor on verge of collapse
What this highlights is the folly of the "Neoliberal doctrine" that private companies and private finance can do things better and more cheaply whilst maintaining a good quality service. You can perm 2 out of 3 but not all 3!
The rules of the game are thus:
The cheapest bidder wins - irrespective of whether or not it is the best value for money,
This process puts monetary value above all else, even if it actually endangers life (see the Grenfell Tower disaster for details)
That is it.
What has happened in many council and Government contracts is that bidding companies - such as Carillion - would discount certain aspects of their bids or chronically squeeze their subcontractors in order to secure contracts. Then there would be the inevitable cost overruns that have resulted from delays in procurement, delivery, etc
These projects come in either behind schedule or massively over the original costs quoted - quite frequently both.
A failure of this magnitude is inevitable
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A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools - Douglas Adams. |
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johnhemming2
Joined: 30 Jun 2015
Posts: 2161
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| Posted: Sat Jan 13, 2018 9:52 pm Post subject: |
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| raspberry-blower wrote: | | A failure of this magnitude is inevitable |
If the state runs everything you still have failures, but they tend to be hidden. |
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woodburner
Joined: 06 Apr 2009
Posts: 3722
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| Posted: Sat Jan 13, 2018 11:27 pm Post subject: |
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That’s ok, at least the taxpayers are not feather-bedding the so called risk-takers and their shareholders. As for the pension fund investors, it’s high time they stopped paying fast and loose with peoples money aided by clumsy politicians such as Gordon Brown.
Virgin is now running away from the east coast trains as they can’t screw enough money, whereas it turned a decent income when it was publicly owned.
Last edited by woodburner on Sun Jan 14, 2018 12:55 am; edited 1 time in total |
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cubes
Joined: 10 Jun 2008
Posts: 616
Location: Norfolk
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| Posted: Sun Jan 14, 2018 12:15 am Post subject: |
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From the FT (Link doesn't require subscription) https://outline.com/ydKWa4.
| Quote: | | Carillion lenders reject restructuring plan, call for government to step in |
Banks crying to the government - "We don't want to lose or risk our money - bail us out". What's the betting that this happens? |
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woodburner
Joined: 06 Apr 2009
Posts: 3722
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| Posted: Sun Jan 14, 2018 12:56 am Post subject: |
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| Snouts either in trough or up arses. |
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johnhemming2
Joined: 30 Jun 2015
Posts: 2161
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| Posted: Sun Jan 14, 2018 8:58 am Post subject: |
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| woodburner wrote: | | As for the pension fund investors, it’s high time they stopped paying fast and loose with peoples money aided by clumsy politicians such as Gordon Brown. |
The pensions issue arises from defined benefits pensions underwritten by the company. As interest rates go down the pension fund goes into deficit.
That is why many companies no longer offer defined benefits pension funds. |
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kenneal - lagger
Site Admin
Joined: 20 Sep 2006
Posts: 10403
Location: Newbury, Berkshire
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| Posted: Sun Jan 14, 2018 6:23 pm Post subject: |
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| cubes wrote: | From the FT (Link doesn't require subscription) https://outline.com/ydKWa4.
| Quote: | | Carillion lenders reject restructuring plan, call for government to step in |
Banks crying to the government - "We don't want to lose or risk our money - bail us out". What's the betting that this happens? |
Cubes, that link only takes me to the Outline front page which then requests the original URL for the FT article. Can you provide that please?
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As Steve Keen puts it: “Capital without energy is a statue; labour without energy is a corpse.” Economics ignores this which is why economics is broken. |
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kenneal - lagger
Site Admin
Joined: 20 Sep 2006
Posts: 10403
Location: Newbury, Berkshire
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| Posted: Sun Jan 14, 2018 6:35 pm Post subject: |
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Having lived through the era of nationalised companies in the UK I can remember just why most people were quite happy to see everything nationalised. They were just awful and were even worse when we had a Labour government as the "workers" expected "there own" government to line their pockets when they were voted in! When Labour didn't they went on strike so we went from bad service to no service at all.
We seem to have gone from one extreme to the other as suggested in the Archdruid blog quoted elsewhere on this forum. I await someone who can come up with a way of working which gives workers a fair wage, customers a good service and which doesn't cost a fortune. Both Socialism and Capitalism seem unable to achieve all three at once.
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As Steve Keen puts it: “Capital without energy is a statue; labour without energy is a corpse.” Economics ignores this which is why economics is broken. |
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cubes
Joined: 10 Jun 2008
Posts: 616
Location: Norfolk
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PS_RalphW
Joined: 24 Nov 2005
Posts: 5376
Location: Cambridge
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| Posted: Mon Jan 15, 2018 8:53 am Post subject: |
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| Carillon liquidated. |
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kenneal - lagger
Site Admin
Joined: 20 Sep 2006
Posts: 10403
Location: Newbury, Berkshire
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| Posted: Mon Jan 15, 2018 12:03 pm Post subject: |
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Thanks, Cubes.
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As Steve Keen puts it: “Capital without energy is a statue; labour without energy is a corpse.” Economics ignores this which is why economics is broken. |
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raspberry-blower
Joined: 14 Mar 2009
Posts: 1610
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| Posted: Mon Jan 15, 2018 2:44 pm Post subject: |
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It's gone!
BBC: Carillion goes into receivership
_________________
A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools - Douglas Adams. |
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