Sir Fred Goodwin - A story to cheer you up

One of the most famous "businessmen" in the country is Sir Frederick Anderson Goodwin. He is famous for many things, most notably his stint at RBS when he presided over the most spectacular rise and fall since the Roman Empire. Sadly for RBS, unlike Julius Ceaser, we didn't hear the words "Et Tu Brutus" when the board realised he was out of control. Many people have a strong dislike of bankers following the crisis, the ordinary staff of RBS were amongst the biggest victims of the reign of Sir Fred. Whilst we associate bankers with huge bonuses and excess, most of the 148,500 (and shrinking by the day) employees of RBS are on pretty ordinary salaries, doing pretty mundane jobs such as cashiers, call centre operators, and IT support staff. The salaries of these staff is in line with similar jobs in companies in other business sectors (ie a call centre operator for RBS earns the same as one working for Rentokil despatching rat ctachers).

For most of the staff of RBS, the bonus they receive isn't  a million pounds a year, it's usually between 3-7% of their salary. Staff are incentivised to take this in shares, which they keep for 3 years to avoid income tax. Most staff kept the shares for considerably longer, as a top up fund for their retirement. Now just suppose you are a worker in a call centre and you earn £20,000 per year. If the average bonus (in shares) you received was 5% a year, you'd have a nest egg of £30,000 in shares (assuming they stayed the same price) for 30 years. For many people retiring, this gives a handy level of security. What did Sir Fred do to these savings? Well at their peak the shares were £7. Sir Fred presided over a decline, where at one point they'd sunk to 10p. That £30,000 nest egg was worth less than £500. At present they'd worth approx £2,000.

Worse for many of them, they lost their job and unlike Sir Fred didn't get a massive multi million payoff for ruining the company.

As a result of this, RBS staff are not members of Sir Fred's fan club. It wasn't always so. When Sir Fred took over Nat West he was the darling of the city and was feared and respected by the staff who worked for the company. Sir Fred was a proponent of the macho school of management. During the Natwest takeover, it was made clear to staff that "it's my way or the highway". So browbeaten were staff, that when he eventually blew it by buying ABN AMRO at price and time which destroyed the company, no one had the balls to argue. No one was left who had the backbone to stand up and say "No sir Frederick, that will bankrupt the company".

The rest is history. We all have to pay for this. Have we learned? Anyway, as I said in the title I know a little story about Sir Fred that will cheer you up. A friend of mine (who shall rename nameless until he retires from the banking industry) works in the part of RBS which handles payments with credit and debit cards. His job is to make sure the system is available 24 hours a day. For doing this, he gets a decent salary, but nowhere near the millions of pounds that the traders and executives get. At the height of Sir Freds pomp, he was working late one day in the office when the phone went of the manager of his department. The manager had gone home. In RBS they have a telephony system where you can pick up other people's phone's. My friend picked up the call for the manager.  The following conversation took place.

Caller : "This is Sir Fred Goodwin. My wife has just tried to purchase something with her credit card and it has been declined. I demand that you do something and sort this out. She's very cross and embarrassed and so am I".

My friend : "Sorry, this is the technical support for system problems, we don't deal with individual card enquiries. You need to call the number on the back of the card"

Caller : "Who do you think you are talking to? You run the system. I want you to go onto the system and sort this out immediately. Don't muck me about or I'll sack you. Do you know who I am?"

My friend "More to the point Fred, do you know who I am?"

Caller : "No, why should I know or care who you are?"

My friend "Because if you knew who I was, I wouldn't be able to tell you to fuck off. Fuck off Fred"

And with that he hung up and went home, to the sound of his managers phone ringing away again.

Respect.

Sympathy for RBS staff

I daresay that not too many of you feel very sorry for the staff of RBS at the moment. Usually we only talk to the bank when things go wrong. They overcharge us, they cock up our mortgage, they get our electricty cut off by stopping our direct debits. That sort of thing. As if that wasn't bad enough, the bloke who used to run it got paid millions in bonuses, crashed the bank, got bailed out by you & me (the taxpayer) and then swanned off with a big fat payoff and a gold lined pension. I'd say that Sir Fred Goodwin is near the top of most people's list of people they wouldn't even urinate on if he caught fire.

We don't like our banks much right now, deservedly so. I was however rather saddened by a little story I was told last night. A good friend of mine works for RBS. She was at the Morrissey gig (she's a Moz nut) and we shared a cab back. As we were coming back, she told me that the previous evening she'd been drinking with Morrissey's crew til 6am (what a girl, she then did a full days work, only pausing for a shower and a change of clothes). One of the friends of the crew, on finding out she was an RBS employee had subjected her to a long tirade of bile about what a terrible person she was for working for RBS. She explained that unlike Fred, she got no bonus at all this year. She's got a mortgage to pay and she doesn't even know how long she'll have a job. She'd been harangued with "How can you justify this, how can you justify that".

The point is that 99.9% of the staff are not to blame for the global recession or anything else. They do humdrum jobs for not much money. Sure some are rude, some are unhelpful, but no more so than any other firm. I happen to think it's pig ignorant to ruin someones evening purely because they work for a company where a few guys at the top have behaved badly. By all means slag off Sir Fred if you see him, but blaming everyday bank workers is cruel, nasty and spiteful.

Banks: Banking on the wrong kind of profit

Did you read any of the reports in the paper today about what the Government plans to do with all of the banks they bailed out? Well having, in effect, nationalised them, saving them from going bust, there is a cunning plan. UKIF (the organisation set up by the Government to manage the broken banks) will wait till the stock market goes up, then flog the shares at a great big profit. Real clever, isn't it? Just one little flaw in the plan. What happens if they don't go up? Duh !!!!! Of course they will, won't they. Well maybe you trust all of the fat cats who knackered them in the first place to sort the mess out. I don't. Gordon Brown hasn't flown a team of Martian financial experts in to do the job, apart from a few in the top layer, it's the same people who were there before.

The problems of the United Kingdom are not something that have just happened since Gordon Brown walked through the door. The decline of manufacturing has been going on ever since the 1950's under Tory and Labour. North West London used to be the worlds engineering powerhouse. Companies such as DeHavilland, Boosey and Hawkes and Van Den Plas were based locally. How many people do you know who actually make things today?

Why did they disappear? Ultimately because the banks preferred to lend money to companies which could turn in bigger, quicker profits. Property business exploded. Shops selling imports turned into massive chains. The little guy on the corner had a bad month? His overdraft was called in and he was off to the benefit office. If when Sir Fred Goodwin at RBS had his overdraft called in by the Government, he got a huge bung and a massive pension.

Reform the banks. Make them lend to the little guy. Make them moderate their profits and provide decent service. We, the taxpayer own them. We saved them. I've got RBS and Lloyds shares, but I'd much rather see a smaller more stable profit, than what we've had. The sad thing is that a bank dedicated to long term, income generating lending would transform the country. As it is, even a Labour Government purely sees the banks as a cash cow to be milked when the time is right.

I did wonder what the initials UKIF stand for. If we don't start lending to business, I suspect that it could well be "United Kingdom is F***ed"

How to avoid the sack !!!!

Most people get the boot for one reason. To save someone else's neck. If you've been caught with your hand in the till, don't read on because this doesn't apply to you - you deserve the boot !!!! As I said though, most people who will loose their job are not on the fiddle. They are sacrificial lambs, thrown on the scrapheap to either save someone's neck or line their pockets. Think of companies currently making people redundant - take RBS. Sir Fred Goodwin & his management team destroyed the company. He has a copperbottom pension and millions of pounds worth of shares. He kept his pension. How is it being paid for? redundancies

Closer to home, Barnet Council's leaders such as Mike Freer, who get generous allowances have seen three senior Council officers walk the plank in recent months. One for problems with Icelandic Investments, one for problems at Aerodrome Road and one for problems with regeneration. The man at the top Leo Bolland left for a better job and a payrise. Freer is still leader, he's been selected to be PPC for Finchley - not bad for a Council Leader with three major cock up's under his belt. Sacrifices have been made but not at the top. You see the lower down the food chain you are, the less you matter. The head honcho's only care while you are useful. The last useful thing many employee's do is lose their jobs to protect their superiors. If you work for an organisation such as Barnet, which is currently in the process of sacking sheltered housing wardens, to save a few quid read on.

By the time you are told you are losing your job it is too late. Your bosses don't care about you, so why should you care about them. Like all bullies, they pick on the weakest victims, those who will go quietly. What you need to do is make sure you have what you need to make them leave you alone. Here's my top 10 tips for avoiding the chop.

1. See what people have left on the printer/photocopier. You'll be amazed what you'll find. It might come in very useful one day.

2. Check the bins. People put all sorts of stuff in there which they'd rather you didn't see. Why let it go to be recycled, when it could save your job.

3. Keep an eye out for unusual activity. If bosses start behaving in an unusual manner, that is a sure sign something is up.

4. Look out for requests to document what you do. This is a sure sign that they are laying people off. Ask what they will do with the information. If they say it is "going in a spreadsheet" that is a sure sign.

5. Get the boss drunk. If he's under pressure, then he may spill the beans. When people are up to no good, they like a nice drink.

6. Don't tell anyone how to do your job. If the boss says everyone should be able to cover for each other, you should smell a rat.

7. If you work for the council and you find out that you are for the chop, leak the information to the press ASAP. Throw them off guard. Take the initiative.

8. Buy the people in HR a beer. If they are drunk, they might spill the beans. Note any indescretions they tell you and remind them of them the next day. You'll soon move to the back of the queue for the boot.

9. Buy a mobile phone with a camera and a record function. This could come in very useful.

10. If you've very lazy morals, sleep with the boss (or the head of HR). This will work wonders for your career prospects.

Of course all of the above strategies might go horribly wrong. If they do, don't blame me as I wasn't being serious. I would suggest that you keep your eye's and ears open. If there is a union, join it. If there isn't read up on your employment rights. Read your contract and make sure that you know what this entitles you to. If you've not got a Union, get advice from an organisation such as Citizens advice Bureau.

Tube strike : The truth about Bob Crow and the RMT

Have you ever been through a divorce? If you have, would you like your lawyer to have turned around to your ex-partners lawyer and said "Well, you are not treating me very fairly, but take what you want". Have you ever been overcharged by a bank? Did you say "Well, it's not fair, but keep the cash". Have you ever been sacked unfairly? Did you say "Well, that's not right,but never mind, it'll make you happy if I say nothing". Have you ever been asked to do something dangerous at work? Did you say "OK, if it saves the boss money, that's fine".

I've heard all sorts of comments about Bob Crow, Leader of the RMT and the man Leading the Tube strike. From some of the comments, it seems he's the most despised man in London. As people struggle to get home from work, this is understandable, but is it fair? Firstly, lets ask ourselves, what is his job? It is to get the best possible deal for the members of his union. I was talking to someone today, who didn't realise that Union members lose pay every time they strike. They thought they got a full days money. When I asked them whether they thought they'd give up cash just to become unpopular, they had to respond that they'd not really though about it like that. To lose cash, most people only do it when they have a serious grievance. They wouldn't do it, just so Bob Crow could go on telly and upset everyone. According to Bob Crow, the sticking point is that staff have contracts which state that there will be "No compulsory redundancies". This is under threat. Management and the press are saying "no one else in the country has such a deal, so why should they?" Now I may agree if Bob Crow was trying to introduce the matter as a new policy. He's not, he's just insisting that the bosses at the London Underground stick to deals they've made before. These assurances were given in the past as part of a bargaining process, in exchange for other concessions. Bob Crow is only asking that agreements be honoured.

The country is in recession. Jobs are disappearing every day. This is not happening because Bob Crow is an awkward sod. It is happening because banks made lousy decisions. Many of our most respected financial institutions were only saved from complete collapse by government bail outs. People such as Fred Goodwin, nearly destroyed the country. He walked away with a multi million pound payoff, smiling into the sunset. There was outrage, but the bottom line is that he had a contract, so nothing could be done. If Bob Crow's members were offered the deal Fred the Shred was to walk, would there be a problem?

So what is the difference between Fred and the tube workers? Well Fred destroyed a company, RBS which was at one stage one of the worlds biggest banks. Thousands have been thrown on the dole queues. The Tube workers have done their jobs, moving Londoners to home and back. During terrorist outrages such as 7/7 they've shown extraordinary heroism. Whatever the reasons for the financial problems at London Underground, they are nothing to do with the tube workers. They are down to Gordon Brown & his PPP scheme, which collapsed. Again it was clever financial whizz kids, saying that the public sector was inefficient which caused the problems. Has Gordon Brown lost his job?

Boris Johnson's predecessor, Ken Livingstone warned Gordon Brown what would happen. He fought it tooth and nail. He lost and the scheme went through. Bob Crow, the RMT and it's members are now paying for the fall out. The banks were given multi billion bail outs. London Underground hasn't been. It seems cuts are order of the day. Unlike the billions given to the bankers, much of which has found it's way into fat bonus cheques for senior managers, the tube workers are now put in a position where their jobs are on the line.

Bob Crow is not an attractive character. He's not an oil painting, he's spiky and abbrasive. He doesn't care for pleasantry. He really doesn't care who he upsets in his mission to get a good deal for his members. If I was getting divorced, he's the type of lawyer I'd want. If I was getting threatened with the sack he's the type of union rep I'd want. His negotiating technique is to grab his opponent by the balls and squeeze till they squeal. Not nice, not pretty but crudely effective.

I don't know about you, but I wish someone had squeezed Sir Fred Goodwin by the balls until he squealed and gave his pension back. I'd be quite happy for that person to be Bob Crow.

RBS mismanagement costs us all dear

There is a report in todays Guardian that the Police are being called in to investigate the rights issue last year at RBS. This involved the bank selling off £12bn of new share capital at £2.00 per share to it's existing shareholders. The rights issue was marketed as being at a heavy discount to the then share price which at the time the deal was first announced was above £3 (I believe). So if you are offered a £3 share for £2 what should you do? If you've got any sense you take the offer. The big question is do you then sell straight away or do you hang on. Well if you hung on your £2.00 would be worth 14p today.

Now you may think "I'm all right jack, I don't own any RBS shares". Don't be too sure. If you have a pension of any sort, chances are that your fund has a few RBS shares in there. If you have a FTSE tracker fund, you own some. Even if you don't have a penny in shares, investments or anything, you own some of RBS because the Government bailed them out. 18 Months ago RBS share price was £5.80.

Now at the time of the rights issue, shareholders were lead to believe that the cash would fix the big hole in RBS finances. This clearly wasn't the case, so the question is this? Did they get the shareholders to part with £12 Billion knowing it wasn't enough and if so why. If they didn't know how big the black hole was, then they shouldn't have launched the refinancing, they should have done more homework - ie they were negligent. If they did then they conned the shareholders. Now I've no idea how much the shares are really worth. I doubt anyone does anymore. The point is that a sensible refinancing at the time or a properly structured Government bail out would have done far more to maintain the banks credibility. It looks to me as if the Royal Bank of Scotland plucked a figure out of thin air and then crossed it's fingers and hoped for the best. I've done that when betting my last £5 on a horse at Kempton Park, but it's not how a bank should be run.

As successive Tory and Labour governments have destroyed the manufacturing base of Great Britain, we now rely on Banking to keep the economy afloat. Those who claim the banks should have been cut adrift and let sink really have no idea what they are really suggesting. London is the worlds major financial centre. Geography, history and time zones are likely to keep it there. No government could afford to stand by and let London's banking industry die. What they can do is ensure that banks are run legally and honestly. It is vital that the police investigate the rights issue at RBS. If the investors were mislead, the CEO Sir Fred Goodwin and his team of directors should go to prison and be stripped of their bonuses. This will send out a clear message to all bank directors that you must treat your shareholders with respect. You must be seen to be completely above board.

I did some digging and this is roughly how much the CEO of RBS - Sir Fred Goodwin has had from RBS in terms of renumeration.

* His compensation entitlement is made up of a £1.29 million base salary as well as £762,000 of pension and benefits.

* Sir Fred was paid £4.2 million in 2007 including a £2.86 million bonus.

* An £8.37 million pension pot that will pay him £579,000 per year when he reaches the bank's retirement age.

* He also owns 2.53 million shares in RBS (as of 12/10/2008)

I have a friend who worked for Nat West /RBS from 1970 until March 2008. Nat West/RBS had a scheme whereby you could take your bonus as shares. He did this every year and kept the lot. I worked out that if his average salary over the 37 years was £20,000 per annum and he got a 5% bonus per year and the shares had gone up at around 5% a year, he'd have had £106,000 worth of shares 18 months ago. Last time I spoke to him (before the big crash) he said he was going to help his daughter buy a house when she got married with the cash. Those shares are now worth approx £2,000 - I guess it'll have to be a shed. His retirement nest egg has been wiped out. This guy isn't a fat cat, just an ordinary bank employee who did the boring things, like making sure your debit card works when you buy your shopping at Tesco's.

Like so many jobs today in Great Britain, people at the top take the money but they won't take the rap when things go wrong. That is left to the poor mugs who are left behind to sweep up the mess. Who are the mugs - you and me my friend, the taxpayer.