AA boss admits to cutting too many jobs

The chief executive of the AA has admitted he has cut too many jobs from Britain's biggest motoring organisation. In an audio-tape obtained by The Independent, Tim Parker, who previously boasted that he was going to knock the former mutual organisation into shape, has conceded that the slimmed-down workforce struggled this summer to get to stranded motorists.

The news could dent prospects for the sale of the AA amid mounting speculation that its owners, private equity groups CVC and Permira, want to find a buyer for the group or even to refloat it at a value of £3bn.

The GMB general union said patrolmen currently applying to take leave were being told the "holiday book" was closed until March because of insufficient staff.

In the latest monthly "On patrol" audio tape sent to all frontline employees, Mr Parker said: "As everybody knows we have been through a lot of change. When you execute change you go at a fair pace and if you know what you are doing you get most of the decisions right.

"You get a few of them wrong and I think in the rush for the hills we probably reduced out patrol force more than we should have done."

Since CVC and Permira bought the AA for £1.75bn from the utility giant Centrica in September 2004, the workforce has been trimmed by 3,000 to 7,000. Within that, the frontline workforce was cut from 3,500 to 3,000. The GMB, which accused the AA's owners of "asset-stripping", argued that the figures underestimated the cutbacks.

The AA lost a multi-million pound contract with Volkswagen in September after management at the German-owned motor manufacturer decided to switch the cover it offers to individual customers and company car fleets to the RAC, owned by the insurance giant Aviva.

Earlier this year a Which? Survey showed the AA had slumped from first to third among motoring organisations in terms of response times.

An AA spokeswoman said the organisation did not foresee any problems when the demand for services increased this winter because it was recruiting more staff.

She said there were always limits on the number of people who could be on holiday at any one time. The spokeswoman pointed out that employees at the AA had voted for a staff association to represent them instead of the GMB.

The AA and its owners declined to comment on the speculation about a sale of the business. However, some City sources suggested that no decision had been taken on the future of the motoring business and that talk of a sale was premature.

Mr Parker, who previously ran Kwik-Fit, also for CVC, is reckoned to have bagged £20m after he cut the workforce there from 10,000 to 7,000 and sold the car repair business to French private equity house PAI. A sale of the AA would lead to another multi-million pound windfall for Mr Parker.