The Royal Mail share price, now known as International Distributions Services PLC (LON: IDS), remained muted after the Acas-facilitated talks between the Communication Workers Union (CWU) and Royal Mail ended without the two sides reaching an agreement.
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According to an article in The Telegraph, Royal Mail bosses accuse CWU leaders of trying to force the company into administration in the hope that the British government will nationalise it and burden the taxpayers with funding its operations. The Royal Mail bosses warned that the company could not be fully nationalised.
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While many Royal Mail customers now fear that there will be more strikes this year, the CWU is yet to announce its next steps, but strikes seem inevitable. Interestingly, Royal Mail (IDS) shares barely moved after news emerged that talks between the company and CWU had stalled again.
I have previously mentioned that the lack of movement in Royal Mail’s share price was because investors and analysts value the Royal Mail business as a liability to IDS, which also owns the highly-profitable international parcels business known as GLS.
Currently, International Distribution Systems (IDS) market capitalisation only reflects the value of the GLS parcels business, given that Royal Mail is a loss-making entity and liability to IDS. The company’s management wants to radically change Royal Mail’s operations to make it competitive in the cut-throat parcel delivery business.
On the other hand, CWU leaders have accused Royal Mail executives of running the company into the ground by returning almost £600 million to shareholders and paying its senior executives millions in bonuses. They also blame Royal Mail for paying agency workers to fill in for CWU workers during strikes.
Now that negotiations between the two sides have broken down, Royal Mail is expected to implement some of its preferred changes, including automating the sorting process and forcing employees to complete their rounds more quickly.
However, Royal Mail cannot force workers to start work later so that deliveries can be made over more hours without the union’s consent.
*This is not investment advice.
Royal Mail (IDS) share price.
The Royal Mail (IDS) share price was trading up 0.60% despite talks with the CWU ending without a deal.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.