Hundreds of jobs likely to go at GNER
The Times: October 04, 2006
By Angela Jameson, Industrial Correspondent
HUNDREDS of jobs at GNER, the train company that runs the London to Edinburgh high-speed service, are likely to be cut in the next fortnight as the rail company moves to reduce its cost base.
Pressure increased on the country’s flagship train service yesterday as Sea Containers, its parent company, had its shares delisted from the New York Stock Exchange.
There are fears that Sea Containers will be forced to seek Chapter 11 bankruptcy protection from its creditors, since it has said that it may not be able to repay a $115 million (£61 million) bond that is due for repayment on October 15.
A spokesman for Sea Containers said: “We are all very focused on the October 15 deadline and our sales of non-core assets are progressing. The company is very focused on its survival.”
Staff cuts of at least 10 per cent among the 3,000 staff at GNER are likely to be announced within a fortnight. Chefs and other frontline staff are thought to be most at risk as the company cuts back its catering service.
Bob MacKenzie, chief executive of Sea Containers and executive chairman of GNER, is understood to have been spending a lot of time in York, at the rail group’s headquarters.
“There will be a reorganisation and some streamlining. That needs to happen to reduce the cost base, but there is no set plan and no talk of numbers yet,” the spokesman said.
Last month there was a cull of senior management at GNER as Jonathan Metcalfe, formerly chief operating officer, replaced Christopher Garnett as chief executive.
Rail unions believe that hundreds of lower-level jobs now will have to be cut if the company is to put its finances in order.
See also:
GNER set to announce hundreds of job cuts - report
AFX: 4th October 2006
LONDON - The UK rail arm of troubled transport group Sea Containers is likely to announce hundreds of job cuts in the next fortnight, according to a report.
Great North Eastern Railway (GNER) is likely to cut about 10 percent of its 3,000-strong workforce as it tries to reduce its costs in the face of the financial problems at its parent company, the Times reported.
Sea Containers, which is struggling with $610 million US of debt, may have to seek chapter 11 bankruptcy protection in the US if it is unable to repay a $115 million US bond due on October 15, the paper said.
GNER, which has run intercity trains from London King's Cross to Scotland since 1997, has struggled to meet payments to the UK government totaling around £1.3 billion sterling that it agreed when it won the right to run the franchise for a further ten years.
The franchise is facing lower-than-expected passenger revenues due to disruption from the London bombings in 2005, increased power charges and a prospective challenge from rival Grand Central, which controversially has been allowed to start competing services on the UK's East Coast Main Line (ECML).