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Private equity firm scraps O2 workers pensions after company take over

Telecom company O2 sold its Airwave emergency system to private equity company Macquarie last week. The effects were immediate, says Alan, an O2 Airwave worker.

Issue No. 2048

‘Within 60 minutes of Macquarie’s move, they had abolished the final salary pension scheme.

When the announcement came people were just stunned. You know there’ll be a shake-up when a new owner comes in, but we didn’t expect this.

One of my colleagues just went pale and nearly passed out.

It was like some dictator issuing decrees.

All this stuff about the modern workplace being open and democratic is just so much bollocks.

You’re a plaything of the market.

O2 let us down and Macquarie finished us off.

Our union, the CWU comunication workers union, had been in discussion with the company throughout the talks around the sale.

They fully believed that no decision had been taken and that those talks had developed a “positive environment” for future progress.

We were lied to.

I don’t believe that management had any doubt about what they were going to do – but they deliberately withheld the news to smooth through the sale.

Lots of people probably don’t realise why there is so much fuss over private equity deals.

These companies are vultures. They find a firm and look for cuts that could be made, cuts that the present bosses can’t or won’t make.

Then they savage the workforce and make a fast buck. Macquarie spent nearly £2 billion on Airwave.

It provides secure mobile communications services for British emergency services. There are over 700 workers, most of them in Rugby where I work.

About 40 percent of the workforce is in the final salary scheme that is now being abolished by the private equity firm.

We were told in December that a sale was on the cards, but none of us thought anything like this would happen.

Around 270 workers participate in the defined benefits pension scheme, while the remaining workers participate in a defined contributions scheme or have private pension arrangements.

I’d support a strike here against the pensions attack.

If we let this go I don’t see how we’re going to stop bosses unilaterally cutting wages or increasing hours in the future.

I’m not prettifying the previous mangers, but private equity takeovers always mean a fight.

Private equity firms often borrow huge amounts at high interest rates to buy out companies, loading them with debt.

They usually control management and, on acquiring a company, often bring in a new team of managers.

During the few years they keep a company, private equity groups maximise short term profits and pump up the company’s value for resale, merger or liquidation.

There are calls for action by the G8, but in truth the only powerful protection is a strong union.’


‘This is unacceptable’

“There can be no doubt that the unions were misled over this issue and that a deliberate attempt was made to delay serious discussion until the sale was complete. This is completely unacceptable.

“The outrageous and disrespectful manner in which this has been handled will enrage workers and generate real concerns over the new owners of their company.”

Jeannie Drake, deputy general secretary of the CWU


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Article information

News
Tue 24 Apr 2007, 19:09 BST
Issue No. 2048
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