Privatised engineering workers face redundancy

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The Independent Online
FOUR years after privatisation, the 50 workers remaining from what was London Transport's bus engineering workforce of 2,800 have written to Sir Wilfrid Newton, the LT chairman, asking for a job. All 50 face redundancy at the end of the month if the receiver cannot find a buyer for Bus Engineering Ltd, the second company to own the former LT business.

A similar number lost their jobs at BEL when the receiver was appointed on 30 November. They are still owed five weeks' wages and holiday pay. Their pension contributions, including extra voluntary payments, had not been transferred to the pension fund and national insurance payments had not been made for two years. They will get the state minimum redundancy pay.

'I have had no money since October apart from pounds 47 from the receiver for the day we turned up to get the sack. I am 56 and it is not going to be easy to find a job,' one man with 14 years' service said.

BEL collapsed with debts of between pounds 4m and pounds 5m, equivalent to a year's turnover. It had only traded since 1 February 1990. The receiver, BDO Binder Hamlyn, was called in by Bank Austria, which had lent BEL pounds 1.5m.

For two of the directors, the pattern was familiar. Shon Laird, managing director, and Tony Cook, chairman, were both former directors of the Bus Engineering Group, a company which acquired the engineering subsidiaries of the privatised National Bus Company in 1989. Bus Engineering Group went into liquidation within 18 months, again with debts of more than pounds 4m.

Both men were also directors of Frontsource, a company established by Robert Beattie, a former consultant to National Bus on privatisation. Frontsource took over the engineering subsidiaries of NBC when they were sold in 1987 and bought LT's bus engineering operations a year later when it employed about 300 people.

Mr Beattie and his wife Joyce are now the sole directors of Frontsource which sold on the operations of Bus Engineering Limited for pounds 2.3m in 1990. They live at the Manor House, with its indoor swimming pool, tennis court and stables, in Houghton, near Stockbridge, Hampshire. They also own Kinnaid Castle, a Norman keep overlooking the river Tay in Perthshire.

Frontsource said its business had changed from bus engineering to property development and the sale of fine antiques.

The report of the receiver of the Bus Engineering Group shows it owed pounds 1.5m to the Hungarian National Bank and, like BEL later, suffered from overvalued stock supporting the balance sheet.

Mr Laird, 40, maintained both companies did not have enough initial capital and had been victims of the recession. He said the bank called in the receiver because it wanted to cease corporate lending in Britain.

But Philip Sykes, the receiver, said: 'The bank was concerned about their stake, about continuing losses and about the fact that the company was unable to meet its wages bill.'

According to the latest accounts filed at Companies House, Mr Laird was paid pounds 140,000 in the 18 months to 31 July 1991. He claims not to have had a salary for the past 10 months, but added that he was talking with financial institutions about buying back the business from the receiver.

For those sacked at BEL, the possibility that the same directors could be able to buy back the company is scarcely credible.

'If they can do it twice, they are going to do it again. It is bad enough with the industry the way it is without having these sort of sharks to worry about,' one former worker said.

(Photograph omitted)

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