Could industrial relations problems lead to the sale of BA to overseas investors?

A leak from a confidential source in the United States has suggested that British Airways is currently looking for a prospective buyer to acquire the whole of the assets and operations of the international carrier.  These discussions are being carried out very discreetly by an unidentified third party who is reputed to report Mr Willie Walsh the airline's chief executive.

The reason for this initiative is believed to be the conflict that the airline finds itself in with Unite.  Despite a high court ruling in favour of BA, the union is fighting ruthlessly to avoid the operator from cutting costs, including cabin crew levels.  British Airways has a staffing cost that is well above the average of even the most efficient operators and is desperately trying to reduce these costs to be competitive. The reason that a sale might be an option is that one of the airline's most valuable assets is its slots at Heathrow which is one of the world's most popular and sought-after destinations.  According to Citigroup research, BA has among the highest-quality earnings streams and one of the strongest balance sheets for a European airline… driven by its strong location at congested Heathrow and almost five years of cost and balance sheet restructuring.

A new owner would not be so handicapped by historical industrial relations, particularly if the ownership is overseas.   A sale would release very substantial capital to their shareholders and allow the existing directors to capitalise on their own shareholdings and to earn undisclosed bonus figures which they claim would be a reflection of the significant level of hard work that they have put in over the past few years.

It is believe that the government would be unlikely to have any basis for stopping such a fire sale and it has not officially been advised of these negotiations.

A number of extremely prominent airlines including two from the United States, one based in far Eastern countries and one from the Middle East are believed to have shown interest.  

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The above "story" is entirely fictitious and based upon no facts, no insided upon no facts, irmed have shown es been stoppingyears.ing carried Fitzhouse Books.

 track nor even any rumours. It is written solely to show what could happen where the directors of major  UK public companies can have incentives to make themselves rich which do not reflect either the company's best interests, the shareholders or, indeed, the country's, says issues analyst, Roger Haywood.

The government has failed to create either an environment or legislative framework where directors can be rewarded for initiatives that benefit their company and the national economy. The UK is rapidly losing not just manufacturing jobs but many jobs within major UK-owned companies that have strong market presence, technology advantages or global brands. Following the shocking sale of Cadbury (predominately to the benefit of the directors and shareholders but not to the nation) and the more recent news of the closure of the Teesside blast furnace at Corus, such a significant change in ownership of our major airline is not beyond the realms of possibility.

It is significant that Cadbury was a strong company getting stronger and sold to a weak company getting weaker. The impact on UK jobs and the UK economy will be clear over time.  

British Steel directors profited from its sale to foreign interest.   Corus was formed in October 1999 through the 'merger' of the failing UK steelmaker and the Netherlands' steelmaker, Koninklijke Hoogovens.  In 2007, Corus was bought by Indian-owned Tata Steel.

 Manufacturing jobs are in fast decline in the UK.  Major UK company ownerships is also seriously threatened.  The UK is now in the position where we have a minimal aviation manufacturing industry - in the 1960s the UK aviation industry was bigger than the whole of Europe combined.  There are no significant UK-owned motor manufacturing.  Our engineering, the chemical and pharmaceutical industries are already on the same slippery path.

What is the future for the UK and our economy?   How will the next generation cope with reduced opportunities to even get work, let alone build careers?  Where will the industrial and business training come from?  How will we repay the debts we have already suffered through greed and selfishness of the fortunate few?  In parallel, our schools turn out youngsters ill-equipped for life let alone for earning a living.  Unemployment has become a way of life for one in five of those of working age.  The population continues to expand beyond our capacity to cope.   An increasing proportion of new citizens of both indigenous and ethnic origins do not share what were once universally viewed as our shared values.   Under these pressures, are we destined to become a third-world country in a generation or so?  And which political party will lead us out of this mess?  Indeed, are the politicians fit for government?