The Implications of Royal Mail Privatization on Public Services and Corporate Tactics

The privatization of the Royal Mail is a topic of significant debate. This article delves into the potential impacts on public services and the corporate tactics that may be employed.

The Potential Downfall of a Privatized Royal Mail

The argument is often that if truly privatized, and with competition allowed, companies like UPS and FedEx would render the Royal Mail obsolete. While there is a possibility that some parts of the postal service might improve due to market competition, it is more likely that the quality of service and accessibility would suffer for many communities.

Based on past experiences and the historical context of postal service privatization, one can anticipate a scenario where:

Downtown businesses and upper-middle-class neighborhoods receive good service, whereas everyone else gets subpar service. Residents in deprived areas or rural areas of the countryside may struggle to receive any mail services.

The Corporate Strategy: Quick Buck Tactics

The privatization of the Royal Mail could potentially be used as a vehicle for rapid profit extraction, much like other businesses have done in the past. The primary method is a leveraged buyout (LBO), where the new owners would:

Buying the Post Office and Setting Up for Quick Profits

Use a mix of cash, bonds, and multiple classes of stock to finance the purchase. Essentially, they would put as little of their own money as possible. Potentially set up the deal in such a way that they receive a lot of stock without putting any money into the deal themselves, making money initially on paper. Purchase the assets to create a cash injection, outsourcing non-core activities to themselves, and overcharging the post office for these services.

Strategic Approaches for Plundering the Post Office

Once control is established, the new owners can employ various tactics to extract profits:

Raiding the Retirement Fund and Selling Assets

Raid the retirement fund, claiming it's overfunded, then move the money elsewhere. Sell off valuable assets to create a cash inflow and then hire external contractors to do the work, effectively outsourcing and inflating costs.

Maximizing Excessive Compensation and Streamlining Operations

The new CEO’s compensation might skyrocket, with perks like private jets and lifetime memberships in luxury clubs. Corporate jets for the executives, their families, and partners, and retirement homes would further increase personal wealth.

Manipulating the System to Achieve Bankruptcy

The next stage is to deliberately take the post office to bankruptcy:

Declare the post office underfunded and unfixable, even though they might have just raided the retirement fund. Prioritize paying off the corporate bonds while cutting costs and increasing interest income on the loans. Hire top advisors to guide this process for a fee, knowing that the outcome will significantly benefit the insiders involved.

Conclusion

The privatization of Royal Mail could lead to a situation where public services are compromised, and corporate tactics are employed to protect personal gains over public welfare. The implications of this need to be carefully monitored to ensure that the interests of the public are not overrun by the private sector's profit-driven agenda.