The news that Carillion has gone into liquidation is a timely reminder for all companies to keep an eye on their customers and suppliers. No company is an island and completely unaffected by what happens elsewhere in the business community. Many suppliers are delighted to have national brands amongst its clients and while Carillion had yet to establish itself as a household name. Most are familiar with the constituent parts of the business including Mowlem and Tarmac. Devon Chamber will be contacting all of its Members to check whether any are affected by the liquidation and then to make any representations that it can on their behalf. It may be that the liquidation will produce opportunities with novated contracts or the rescuing of parts of the business. This is going to be an uncertain time for many companies in the construction and related sector.
It is also a timely reminder for all companies to ensure that their gearing and debt position poses no threat to future operations. In some sectors and industries buy outs and changes of ownership have been facilitated by loading debt into the company. This may have been advantageous to the City of London and those that wheel and deal but in most cases it has been seriously detrimental to the company. It is therefore not good news for employees, suppliers and customers all of whom have had to take on more risk, many without realising it.
Pension deficits are also serious news, both for the health of the company and pensioners, existing and in the future. Many companies have moved to change their pension provision to ensure that they are sustainable and affordable. That is why so many in the private sector have seen potential pensions become less and the need for employees to pay more. It is vital that this partnership between company, pensioner and pension provider is kept under constant review and kept healthy. It is in no one’s interest for companies to be placed in liquidation and pensions to be at risk.
The Carillion situation is a timely reminder. It is essential for all companies to be engaged and outward looking to ensure that risks can be managed. The Chamber is one way in which companies can keep abreast of developments and mange that risk.