GNER seeks to curb costs with cull of senior staff

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The Independent Online

Britain's flagship rail company underwent a cull of its senior managers yesterday as part of an attempt to cut the cost of running the east coast main line route between London and Edinburgh.

Three senior directors left Great North Eastern Railways (GNER) as part of the plan by the beleaguered parent company, Sea Containers, to make the rail operation profitable.

The senior figures leaving are Shaun Mills, the finance director, Mike Gooddie, the human resources director and Clare Field, the head of sales and marketing.

Jonathan Metcalfe, who was deputy chief executive, will be given the title chief executive, but unlike his predecessor Christopher Garnett, he will answer directly to Bob MacKenzie, the chief executive of the parent company who has been made GNER's executive chairman.

Mr Metcalfe has signed up to a programme of drastic cost-cutting at the train operating company which is expected to involve widespread redundancies. Mr Garnett is understood to have resisted the plan.

The new directors have the task of creating enough revenue to meet GNER's franchise requirement to pay £1.3bn back to the Government over 10 years.

Bob Crow, the general secretary of the RMT rail union, said: "Our members are worried that directors interested in running a railway are being pushed out in favour of hard-nosed bean counters.

"It's all very well culling senior executives, but it is imperative the slaughter is not extended to the hard-working front-line people who operate GNER's services. The RMT will not sit back and watch jobs destroyed by people who are capable of seeing only the bottom line."

Mr MacKenzie has been in talks with the Department for Transport to try to renegotiate the east coast franchise. GNER's pledge to provide the Exchequer with £1.3bn has been undermined by the London bombings, which frightened away customers, and by a rise in electricity prices.

The train operator also failed to persuade the High Court to overturn a decision by the Office of Rail Regulation to allow increased competition on the east coast route from two rival operators.

The New York-listed and Bermuda-registered Sea Containers has had problems elsewhere. Analysts say it will have problems repaying £60m of its £340m debt on the scheduled date of 14 October.