Red Star plans for profit
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by Steve McQueen • Employees of parcels delivery firm Red Star have been offered the chance to become franchisees, as part of a radical shake-up of the firm designed to return the former British Rail company to profit within two years.
Managing director John Holmes, leader of the fourstrong management buyout team, says: "The launch of a "same day by air" service means Red Star will be the only business within the industry offering a unique combination of rail, road and air transportation of consignments." The management buy-out deal, ratified by Transport Secretary Sir George Young last week, gives Red Star guaranteed space in the network's 15,000 trains over the next seven years. Red Star will also have exclusive access to the parcel points for the next two years—competitors will have to book train space through Red Star.
Three tiers of franchise holders will pay between £10,000 and £20,000 for the right to operate. Red Star employees, and existing agents, will get points and a 50% discount when franchises are allocated.
Franchisees at the lowest levels, in the more remote areas, will be allowed to use their own vehicles in Red Star colours for other non-parcels business, as long as Red Star has priority. Seminars for interested employees and agents were held last week.