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Wednesday, February 06, 2008

Virgin Backtracks

Now that the finishing post is in site, in the race to take over the corpse of Northern Wreck, those organisations that expressed a very public interest in making a bid are now having to get ready to put their money where their mouths are.

Monday saw Olivant pull out, today it is reported that Virgin are backtracking on a promise not to cut jobs if it succeeds in its bid.

Jayne-Anne Gadhia, the head of Virgin Money, said:

"We cannot continue to make the promise that there will be no redundancies, but we would aim very much to minimise any reductions."

When Virgin originally very publicly announced it was interested in bidding for Northern Wreck, last October, it said that it would keep Northern Rock operating in its current form and did not anticipate any job losses.

Needless to say the unions are not best pleased with this volte face. Unite said that it will meet with the company on Thursday to discuss the details of their bid.

Graham Goddard, Unite deputy general secretary, said:

"Unite will oppose any compulsory redundancies."

That's all very nice, but how exactly do they intend to oppose the redundancies without destroying what remains of the corpse of the bank?

The BBC estimate that approximately 1,000 (1 in 6) members of Northern Wreck's staff will lose their jobs.

It seems that the issue that has caused this volte face by Virgin is the insistence by the government that the loans made by the Bank of England to Northern Rock must be repaid in three years, rather than five years as previously expected.

Money has the rather annoying habit of really focussing the mind!

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