Government Loan to Virgin Australia
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I don’t think Carla or Bill give two shits about Scurrah and his slideshows.
They have their own plans and agenda. Most certainly does not involve anyone from Virgin.
Carla will want the Corp model but gut the costs, Billy will probably go down the Alaska route with Tiger surviving. Scurrah or Dani wont be involved.
Is Elizabeth still with us?
They have their own plans and agenda. Most certainly does not involve anyone from Virgin.
Carla will want the Corp model but gut the costs, Billy will probably go down the Alaska route with Tiger surviving. Scurrah or Dani wont be involved.
Is Elizabeth still with us?
When you do restructures or sales in business, you either do it “slow and clean” or “quick and dirty” this last method involving loose ends and risking some chaos to get the deal done.
That said, I’m not sure Deloittes have the money to do this slowly and still have Virgin survive. I also wonder if they even care from their own a business perspective, although I hope they do, and I hope their fee agreement reflects it.. How long did Korda Mentha take to wrap up Ansett? Ten years?
For all of your sakes, I hope Deloittes are working 24/7 to get this done NOW. Time is not on your side. You want a heads of agreement and finance organised as quick as possible. Bugger the details. That can all be sorted later. Lock in a buyer RFN.
That said, I’m not sure Deloittes have the money to do this slowly and still have Virgin survive. I also wonder if they even care from their own a business perspective, although I hope they do, and I hope their fee agreement reflects it.. How long did Korda Mentha take to wrap up Ansett? Ten years?
For all of your sakes, I hope Deloittes are working 24/7 to get this done NOW. Time is not on your side. You want a heads of agreement and finance organised as quick as possible. Bugger the details. That can all be sorted later. Lock in a buyer RFN.
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Lock in a buyer RFN
The bidders currently left are only in there to confirm the true financial position. Pretty sure they would not believe Deloitte’s very optimistic forecasts.
Both Bain and BGH will have a bottom line that is the worst case scenario for the administrators.
Led Zeppelin, because “the assets” doesn’t include the staff. It’s them I worry about. Selling the airline as a going concern includes the staff. All the assets are is office furniture, old computers, a few old aircraft, some tools and...........a coffee machine.
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Yeah, but apparently the coffee machine in Adelaide is pretty bloody good!
Despite Scurrah telling Elizabeth Knight of the SMH in November last year that, 'By Christmas, most of the 750 in headcount reductions, designed to shave $75 million from Virgin's cost base, will be complete.' the FY20-H1 interim report stated that only 'approximately 140 employees had left the business before 31 December'.
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Or the fact the boys club didn't have the balls to have tough convo's or take it seriously. Many GM's et al were overheard at drinks with "Oh they'll take a couple of sacrificial lamb's but I'll keep the rest", when the reality came and many of them were far off the target. Awkward looks across the room.
Well, I know that it's unusual to find anyone with a kind word for AJ in these forums but what few remember (or know, as there was no fuss made about it) was that back in 2012 when QF tumbled to a loss, because of the way the scorecards were structured AJ was still entitled to a $792,000 STIP bonus. He turned it down. He also declined the $65,000 increase to his base pay he was entitled to that year.
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Well, I know that it's unusual to find anyone with a kind word for AJ in these forums but what few remember (or know, as there was no fuss made about it) was that back in 2012 when QF tumbled to a loss, because of the way the scorecards were structured AJ was still entitled to a $792,000 STIP bonus. He turned it down. He also declined the $65,000 increase to his base pay he was entitled to that year.
I’m sure he really missed the $65,000 increase to his base pay!
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I can't see any way that Scurrah will be part of a new operation, whoever picks up the pieces. They will want their own people as unpleasant as that may be, particularly if Bain gets hold of it.
Someone mentioned the debtors earlier. Here it is instructive that the unions, acting as a block, will be able to vote down any proposed Deed of Company Arrangement by virtue of their representation of the employees. Even though the employee debt is a pittance in the grand scheme of things each of the 9,000-odd employees counts as a creditor for voting purposes and votes are carried or lost on value and number. We'll have to see what carries the day - pragmatism or principle.
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Hey Jethro, if it only were so,
The 75 million in savings required, was a spreadsheet exercise, aimed at drawing favor from the financial markets immediately prior to the bonds issue, that funded the Velocity buyback. When announced there were zero plans in place as to how to achieve it, and remarkably the contractors and consultants were the first group exempted, and then there was the call centre, and then anyone who was on an EBA, and then anyone on the front line, all exempted. Easy to see how buy into the program was so low.
It was a shame, I had thought the new boss, was evidence of the grown ups being in charge, but this an now the Delusion just go to show you, that the circus just goes on.
The 75 million in savings required, was a spreadsheet exercise, aimed at drawing favor from the financial markets immediately prior to the bonds issue, that funded the Velocity buyback. When announced there were zero plans in place as to how to achieve it, and remarkably the contractors and consultants were the first group exempted, and then there was the call centre, and then anyone who was on an EBA, and then anyone on the front line, all exempted. Easy to see how buy into the program was so low.
It was a shame, I had thought the new boss, was evidence of the grown ups being in charge, but this an now the Delusion just go to show you, that the circus just goes on.
To play devils advocate for a moment, I believe it was 750 individual contract positions that were to be reduced to achieve a target of $75 mil. Not necessarily 750 people to be made redundant. If an identified role was vacant, became vacant or was merged with another role, then I would imagine this would be counted toward the target but not counted as a redundancy. Having said that, the process did drag too long and with some disappointing results, namely some of the talent departing the organisation as compared with what was being retained or worse brought back in. Unfortunately, by the time it got to the lower levels of the structure COVID 19 fun began.
In any event, Virgin's own reporting in ASX filings explicitly links 750 employees to the 750 roles being ostensibly eliminated. The FY20-H1 interim report states that of the 750 roles targeted, '140 employees' had left as of 31 December (18.7 percent achievement against target), with roles impacting a further '280 employees' having been identified to leave the business by 30 June 2020 (in aggregate, a 56 percent achievement). The report notes that further plans were under consideration for the remaining 330 roles.
By any ordinarily accepted business practices relating to cost reductions that effort was glacial and almost literally half-hearted in terms of execution against a plan. It is all the more of a capital F Fail in that Scurrah had told the SMH in November that 'most of the 750 in headcount reductions' would be complete by Christmas. Less than 20 percent had been achieved by Christmas.
The whole rightsizing exercise is just further evidence, to the extent that it is needed, of the absence of any sense of either urgency or purpose and the abject lack of accountability at the top of the business.
You're taking an interesting semantical approach to what was in essence a hard dollar financial problem. From a cost control perspective two things were important - elimination of roles and elimination of costs associated with the role. Offering up a role that was vacant achieves the former without necessarily contributing towards the latter. In order to save money in this context you need to stop spending it. If you're already not spending it (eg the role is vacant) then offering up that up as part of the rightsizing doesn't contribute to a real saving.
In any event, Virgin's own reporting in ASX filings explicitly links 750 employees to the 750 roles being ostensibly eliminated. The FY20-H1 interim report states that of the 750 roles targeted, '140 employees' had left as of 31 December (18.7 percent achievement against target), with roles impacting a further '280 employees' having been identified to leave the business by 30 June 2020 (in aggregate, a 56 percent achievement). The report notes that further plans were under consideration for the remaining 330 roles.
By any ordinarily accepted business practices relating to cost reductions that effort was glacial and almost literally half-hearted in terms of execution against a plan. It is all the more of a capital F Fail in that Scurrah had told the SMH in November that 'most of the 750 in headcount reductions' would be complete by Christmas. Less than 20 percent had been achieved by Christmas.
The whole rightsizing exercise is just further evidence, to the extent that it is needed, of the absence of any sense of either urgency or purpose and the abject lack of accountability at the top of the business.
In any event, Virgin's own reporting in ASX filings explicitly links 750 employees to the 750 roles being ostensibly eliminated. The FY20-H1 interim report states that of the 750 roles targeted, '140 employees' had left as of 31 December (18.7 percent achievement against target), with roles impacting a further '280 employees' having been identified to leave the business by 30 June 2020 (in aggregate, a 56 percent achievement). The report notes that further plans were under consideration for the remaining 330 roles.
By any ordinarily accepted business practices relating to cost reductions that effort was glacial and almost literally half-hearted in terms of execution against a plan. It is all the more of a capital F Fail in that Scurrah had told the SMH in November that 'most of the 750 in headcount reductions' would be complete by Christmas. Less than 20 percent had been achieved by Christmas.
The whole rightsizing exercise is just further evidence, to the extent that it is needed, of the absence of any sense of either urgency or purpose and the abject lack of accountability at the top of the business.
