Public Services International Research Unit
Education Index Module 1 Module 2 Module 3 Module 4 Module 5 Module 6 Module 7 Module 8 Resources Index PSIRU Home Email us at: psiru@psiru.org



Activity 7.2: Takeovers, restructuring and employment



FOCUS

To develop understanding of the different forms of company restructuring

To consider the different implications for jobs of such restructuring

To develop trade union negotiating strategies for these situations

TASKS:

Local Electricity Distribution plc is taking over Local Water to form a new company, Regional Services plc. It has borrowed £500m to pay for this, and promised the shareholders of both companies that it will increase dividends next year.

Regional Services says it will:

  • sell the construction section of the water company to an American multinational, California Construction Inc.
  • set up two new divisions to sell gas and telephone services in the region
  • merge the computer, finance and invoicing functions of the water and electricity companies to create a single new division called Vertigo. Vertigo will also offer to sell computing services to other companies or municipalities.
  • contract out meter-reading to other companies
  • buy power stations from Large Power plc so that Regional Services can generate most of its own electricity
  • offer 'one-stop' services to customers for servicing electricity, gas, phone connections, providing services and selling appliances

In your groups, produce two reports:

1. What are the main management objectives in all these changes? Where are job cuts central to these objectives?

2. What negotiating priorities and strategies should the trade unions adopt?

RESOURCES:

TIME

2 hours