Royal Mail workers vote against sell-off

LONDON (Reuters) - Royal Mail workers backed union opposition to plans to privatise the state-owned postal group on Wednesday, a stark reminder for potential investors that there will be no warm welcome if and when the firm changes hands.

The Communication Workers Union (CWU) sent consultative ballot papers to 112,000 Royal Mail postal workers and said of a 74 percent turnout, 96 percent opposed government plans to float or sell the firm this financial year in Britain's most significant privatisation in decades.

An initial public offering (IPO), which could value the near 500-year old business at 2-3 billion pounds, is the preferred route and banks have been appointed to run the listing. As part of government legislation, Royal Mail's 150,000-strong staff will have a 10 percent stake in the group.

The CWU believes that privatising the firm will lead to a worse deal for customers and staff, while Royal Mail argues it is vital to secure external capital for future investment.

"This ballot result is a damning rejection of the tired old government privatisation policy and the actions of the Royal Mail board in support of this," Dave Ward, CWU deputy general secretary, said, adding that industrial conflict was inevitable unless talks to find a different solution did not proceed.

"Postal workers are not going to sacrifice their souls for a so-called 10 percent stake when they know their jobs, pensions and conditions are once again under threat."

Several attempts to sell off Royal Mail, whose position as Britain's dominant player has only been somewhat eroded over the past decade, have already foundered, with the previous Labour government abandoning the last attempt in the stock market chaos of 2009.

Some private equity firms have said that the politics attached to the company, together with not being able to outright own the firm, make it a less attractive proposition, although they remain government's plan B.

Speaking to Reuters in May, Royal Mail Chief Executive Moya Greene acknowledged union members would never drop opposition to privatisation but glossed over whether investors had expressed concern at such a response from the company's workforce.

Greene's focus has been on emphasising to pension and mutual funds Royal Mail's shift away from a structurally declining letters market towards a growing parcels business that now makes almost half its revenue and helped the firm more than double annual profit recently.

Union members also voted on pay and workplace issues, and were 92 percent in favour of boycotting the delivery of competitors' privately sorted mail.

The union believes private sector rivals such as TNT Post, which wants to launch a full process delivery service for at least some UK areas in five years' time, are undermining its ability to maintain its universal nationwide service by targeting only the profitable parts of the mail bag.

The boycott could see 26 million items a day, including bills, statements, and business mail undelivered. The union said it would meet soon to decide how to take these issues forward.

Responding to the union vote, Royal Mail said while its sale was a matter for government, a change of ownership would not affect terms and conditions for its employees. It also said it believes any direction by the CWU that postmen and women should refuse to handle competitors' mail would be unlawful.

(Reporting by Neil Maidment; editing by Patrick Graham)

Source: http://news.yahoo.com/royal-mail-workers-vote-against-sell-off-120953848.html

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