Royal Mail Says Change Is The Only Option

07/06/2007

Royal Mail said today that it would continue its drive to modernise the business to allow it to compete and thrive in the competitive market.

Commenting on the outcome of a strike ballot held by the Communication Workers Union on pay, conditions and the business plan, the company said that the union had balloted 127,000 people and that 66,064 people had voted for strike action. That’s around half of the number balloted and excludes more than 20,000 people who aren’t union members.

Allan Leighton, Chairman said, "As ever, we are listening hard to our people but this is not a popularity contest. Change is difficult for everyone - and we understand that - but we have no option but to become a modern, efficient business if we are to compete and thrive in today’s competitive marketplace. We urge all our people at Royal Mail to work together to meet these challenges and to refrain from any industrial action that would hurt both our customers today and our prospects for a successful and profitable business in the future."

"If we don’t modernise we’ll fail - and we’ll end up in the "race to the bottom" that the CWU say they are against. So our position remains - we can’t afford to pay any more right now and we certainly can’t afford to put all our future in danger by putting off the need to change and modernise."

Royal Mail said that the CWU had tried to create a political issue rather than focussing on a pay deal which offers 2.5% on basic pay as well as a dividend of £800 and a 50:50 productivity sharing scheme. Colleagues in Parcelforce, the group’s parcel’s division, have already voted to accept a similar pay offer on a recommendation by the CWU.


Commenting on the challenges facing the business, the Company highlighted that:

• One in five letters will be handled by our rivals this year
• Royal Mail has already lost 40% of the Bulk Mail business to the competition.
• The UK mails market is declining overall at the rate of 2.5% per annum
• Our competitors are 40% more efficient than we are, not because their people work harder than ours, but because they have already invested in modernising and mechanising their businesses

In light of these challenges, Royal Mail said it will be launching and communicating its business plans to all employees in the coming weeks and months, and that the drive to modernise at pace, and compete to win business, will continue.

"The only way we are going to improve pay, protect pensions and deliver great customer service is by modernising to compete. Every day we delay change - and every day we have strike action - damages our ability to make that happen," Mr Leighton said.

Ends

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