'Predatory' firm's tactics kill off rivals

CHRISTIAN WOLMAR

If the Government had wanted to choose the most controversial candidate as the flagship for its privatised rail programme, it could not have done better than going for Stagecoach. It is Britain's largest bus company and at once its most famous and most infamous.

Stagecoach has been built up by the brother-and-sister team of Brian Souter and Ann Gloag, both former bus drivers who started the company from redundancy pay-outs, and its profitability is demonstrated by the fact that Mrs Gloag recently bought Beaufort Castle, near Inverness, the seat of the late Lord Lovat, a far cry from the council house in Perth where she was brought up.

Stagecoach's infamy comes from its aggressive and predatory behaviour towards scores of bus companies which it has either bought up or driven out of business. Stagecoach Holdings now consists of an international empire of 7,300 buses, 20,000 employees, a turnover of pounds 430m and profits in the past six months of nearly pounds 20m. Its shares, now quoted on the Stock Exchange, recently hit an all-time high.

The company, a child of the 1985 Act which deregulated the bus industry, makes no bones about the fact that it feels a local monopoly is the best way to provide services. In a succession of battles it has either taken over all its competitors or flooded an area with so many buses that others could not compete.

In Darlington last year, for example, it squeezed out local operators by running free services for six weeks, behaviour which the Monopolies and Mergers Commission called "predatory" and "against the public interest". There have been five detailed MMC inquiries over the past year and other battles are looming. Drivers working for Selkent, one of the two London bus companies Stagecoach took over last year, were recently given 90 days notice of termination of employment in a fight against the unions as the company wants to reduce drivers' wages.

Unlike many other aggressive companies, however, Stagecoach does not fight shy of the media. Yesterday, Brian Cox, executive director and the director in charge of the southern area, spent all morning happily talking about his company's controversial record.

To gain control of South West Trains, Stagecoach has put in what looks like a very low bid requiring pounds 20m savings on variable costs of pounds 125m. Mr Cox said: "We think these cost reductions are realistic and achievable." However, a battle with the unions, particularly the train drivers in Aslef, seems inevitable. Mr Cox says Stagecoach's size is an advantage because "if a meltdown situation occurs we can survive it".

Nor does Mr Cox disguise the fact that there will be sharp reductions in the 4,000 staff at present employed by the train company. "In the bus industry we have got rid of a lot of managers and management layers. We also expect our staff to work harder than they might have been used to. We will be instilling the same culture in South West Trains."

There may be some relief in the bus industry if Stagecoach is now concentrating on the railways. As a senior London manager who fought off a bid from the company said: "Stagecoach tends to leave the other big players in the bus industry alone but it makes everybody who works for smaller companies apprehensive. They tend to go into companies and shoot the management. They also tend to reduce staff drastically."

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
news
Sport
Chelsea midfielder Cesc Fabregas
footballChelsea vs West Ham live kicks off coverage of all 10 of Boxing Day matches
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
News
i100
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
News
news
Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)
tvOur review of the Doctor Who Christmas Special
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Ashdown Group: Senior Marketing Executive- City of London, Old Street

£40000 - £43000 per annum + benefits: Ashdown Group: Senior Marketing Executiv...

Ashdown Group: Marketing Manager

£40000 - £43000 per annum + benefits: Ashdown Group: An international organisa...

Ashdown Group: Internal Recruiter -Rugby, Warwickshire

£25000 - £30000 per annum: Ashdown Group: Internal Recruiter -Rugby, Warwicksh...

Ashdown Group: Marketing Manager/Marketing Controller (Financial Services)

£70000 - £75000 per annum + benefits: Ashdown Group: Marketing Manager/Marketi...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all