TRUE to form the private equity capitalist groups Permira and CVC having acquired the prestigious AA motoring group with the help of huge borrowings from the banks, have through savage attacks on AA workers paid back the bankers, and have now sold the AA to Saga, with the capitalists at the helm of the smash and grab operation pocketing £300 million.
Paul Maloney, National Secretary for the GMB, commenting on the fact that the AA had been sold to Saga for £3.4 billion, said: ‘By our reckoning, the managing partners in Permira and CVC stand to make £300 million, having owned the AA for less than three years.
‘The chief executive, Tim Parker, we reckon will get £80 million out of this deal. This shows the extent to which we have entered into a Casino economy.
‘This money was made on the back of 3,500 sacked workers, cuts in the pay of the call centre staff, the elongation of the working day for the patrols and a decline in the service to the customers.
‘GMB will want to talk to the new owners, Saga, about reversing these cuts and getting back to reasonable working hours and improving services for the customers.’
The last paragraph contains the grand illusion. Saga is in fact owned by the Charterhouse equity capitalist group. It has purchased the AA to take advantage of the worker bashing that Permira and CVC engaged in, not to do something good for the workers – meanwhile Permira and CVC will retain a share in the new business.
The aim is to make some very big profits, and to carry on with a dictatorship over the working class.
The head of Permira, Damon Buffini, was one of the four leading private equity bosses who appeared before MPs recently to defend the amount of tax that private equity firms and their bosses don’t pay, while not being able to reveal the exact amount to the MPs’ committee.
On May 16, 2006, the GMB published a leaked document from the AA which shed further light on the methods of the equity capitalists. It showed that under the then new owners and their sackings policy, that the number of patrols was down by a third, while the AA was doing 20 per cent more call outs per day.
The GMB stated: ‘The capacity gap between higher demand and lower supply – even with the higher level of output per person – goes some way to explain why the AA fell from first to third in the “Which’’ rankings for response times to broken down motorists.
‘In an attempt to bridge the capacity divide management are insisting that staff give 12 months notice as when they wish to book holidays. If they do not give this notice the AA are insisting that patrols lose their leave. . .’
The GMB added: ‘Damon Buffini, boss of venture capitalist Permira, with CVC has presided over the sacking of 3,400 of the AA’s 10,000 workforce.
‘Disabled staff were targeted for the sack.
‘AA have increased prices to some motorists by 30 per cent. In the “Which’’ rankings for response times AA has fallen from first to third.
‘Profits have been doubled to £200 million. AA have been saddled with £1.9 billion debts as the venture capitalists plan to asset strip £500 million out of the company in the form of a special “dividend”.’
The private equity groups are a product of the death agony of the capitalist system, where the struggle to make profits from developing the productive forces has given way to the crudest of asset stripping allied to frenzied attacks on the working class. This is a trend that leads directly away from parliamentary democracy and notions of bourgeois freedom, to military police dictatorship and the ‘iron heel’ to keep the oppressed masses from dealing with the financial oligarchy that rules over them, with one boot placed on their throats.
There is only one way to deal with the equity capitalist groups and the bankers who stand directly behind them, that is to expropriate both sets of locusts as part of a socialist revolution.