P LETTER OF THE WEEK
Page 20
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Pre-packs don't work for everyone
WITH REFERENCE TO the letter Phoenix operations are a necessary tool' (CM 16 September) from Paul Brindley, I agree that pre-pack administrations may be a useful tool for manufacturing companies, but not necessarily for hauliers.
I can appreciate that some well run haulage companies may get AiZz‘ into financial trouble, for example: as a result of their customers (through no fault of the haulier) closing down owing the haulier money In this case a 'pre-pack' sale may be seen as being legitimate.
What cannot be defended is when a haulage company goes under because it has been charging its customers an unsustainable rate for the job.
The haulier is then resurrected clear of debt — owed mainly to HM Revenue & Customs (i.e. us as taxpayers), subbies and suppliers They then continue to serve the same customers for the same unsustainable rates until they sink again.
In the meantime, customers' perception of the correct haulage rates are artificially low making it even harder for the conscientious haulier (who knows his true operating costs) to achieve sustainable rates.
I can understand why any government would wish for a facility such as a 'pre-pack' to be a useful tool in the case of a manufacturing company getting into financial difficulty, to prevent it from closing permanently with the subsequent "leakage of wealth" (along with jobs and skills) abroad.
But in the case of a haulage company failing, there will be plenty of others ready, willing and able to step in and keep the customers goods moving — although the customer may expect to have to pay more for them to do so!
Andy Jenkins Director