HEALTHSPAN has threatened to pull its postal operations from the island if Guernsey Post does not become competitive.
In a submission to the Office of Utility Regulation, founder and CEO Derek Coates said Guernsey’s postal firm was highly inefficient, mismanaged, over-managed and needed to change its business model.
He said his company would be contributing more than £5m. towards Guernsey Post revenue this year.
The regulator is looking to open up the market to competition.
‘Guernsey Post has been complacent in the belief that direct marketing will simply stay in Guernsey for the foreseeable future. This is not correct,’ said Mr Coates (pictured) .
‘We will keep the head office in Guernsey, but our postings will be based where the prices are most competitive.’
He said there was no need for Healthspan to use Guernsey Post because its goods were made all over Europe and in India. The company would consider using Jersey.
‘We would prefer to stay in Guernsey, but only if Guernsey Post can be efficient and competitive, which currently it is not.’
The same applied to all bulk mailers in the island, except perhaps for those posting flowers, he said.
Those that could not move would close, he added.
‘The knock-on effects are job losses in dispatch centres, the loss of tax revenues in Guernsey and the likely loss of further significant investment in Guernsey as the centres of operations are forced to relocate.
‘The senior management of Guernsey Post are only concerned with their own highly-paid jobs, privileges, bonuses and profit shares rather than the wider community that it is mandated to serve.’
Many hundreds of jobs would go with the loss of the distribution sector of the fulfilment industry, he said.
Mr Coates said that in future, businesses would not come here but head to more competitive jurisdictions because of Guernsey Post’s behaviour.
Its management had also misled the public, he claimed.
‘My concern is that the postmen, politicians and people of Guernsey have been given a very biased version by the Guernsey Post PR machine and may not have been told the other half of this particular story,’ he said.
The bulk mail industry represented £21m. per year of Guernsey Post’s turnover, he said, but required only £370,000 of labour because nearly all sorting was done by bulk mailers.
‘The remaining Guernsey Post turnover of just £22m. has labour costs of a staggering £13m., the majority of which is made up of management salaries,’ he said.
It was right for the OUR to demand this change, he said.
‘Guernsey Post is quite simply being extremely badly managed and the extent of this mismanagement has been brought to the attention of the public by the OUR and Guernsey Post don’t like it.’
If the firm’s campaign to influence the OUR’s decisions succeeded, he said, it could cause significantly more future job losses than needed, not only among postal workers but also middle management.
‘We believe that Guernsey Post are failing their staff, failing our business community and failing our island.’
Derek Coates’s letter in full in tomorrow’s Guernsey Press
Article posted on 24th November, 2009 - 11.30am
5 Article Comments
This is a threat not to be taken lightly. If Healthspan leaves others will quickly follow!
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Hot Air..!! If Guernsey Post was that bad and there are better more competitive deals to be had elsewhere that were as convenient and fulfilled his business requirements then Mr Coates would have moved his business a long time ago, as would others.
Mr Coates is using the oppurtunity to have a cheap shot at Guernsey Post and perhaps slim down his own business at the same time, note he doesn’t state how many jobs at Healthspan would be at risk if this happened.
The States dived in at the deep end with zero 10 because it feared the banks would all leave now that fiasco has to be put right.
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What is the link between Guernsey bringing in “zero-10″ and Healthspan saying Guernsey Post could do a lot better?
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Jimmy
How do you know he is just having a cheap shot at Gys Post? dont you think he would know more about his business than you do?
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Derek may have a point about overmanning. A few years ago my company had some work that involved dealing with the staff at their counterparts in Jersey. As part of the job I was aware of the headcount – and was surprised to see that there was not a lot of difference between the two islands. Perhaps we had more managers? Interesting to see that while Guernsey Post has been caught out trying to evolve into a bank while not twigging the States are reluctant to take on the role of de facto guarantor (they made that clear to hundreds of local depositors in another setting) it is their Jersey rival that has been advertising heavily for the shipping from UK service. Sometimes too many managers can miss the obvious – how many times have you cried out “I wish we had another bank to choose from in St Peter Port” and how many times “I wish there was an easier way of getting stuff delivered from Argos” – I know which idea I’d get my crack managerial team to investigate.
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