Workers' Liberty

First Great Western, First Capital Connect, First TransPennine Express, First ScotRail, Hull Trains, FTR, First Bus, First Student UK, ...

First Great Western is ‘Britain’s worst-performing rail route’ (Times online 10/1/08), attacked by Bob Crow for ‘heavy-handed and confrontational management … undermining our members’ jobs’.

Its parent company is First Group, the largest rail operator in Great Britain. Up to March 2007, First:
- increased its revenue by 22.4% on 2006
- increased earnings per share by 9.1%
- reduced borrowing from £704 to £516m
- ended the year with a share price 56% up on the previous year (£4.25 to £6.65).

In 2007, North America contributed just under 22% of its revenue (£803m out of £3,709m) but more than 26% of its profits (£68m out of £259m). This is good going. So who are the North American moneymakers?

The main North American business is First Student, which runs school buses. Thanks to First Student, First can illustrate its Financial Review with a photo of a little yellow school bus and a cute ethnically diverse schoolboy. The chairman can sound over-excited about the North American market, which offers ‘significant growth opportunities’.

The latest takeover, in mid-2007, was the Laidlaw transport business, which was opposed by the Teamsters union. The Chief Executive’s statement gets quite flustered with excitement: taking over Laidlaw is ‘a transformational deal with considerable prospects for value creation. This is a unique opportunity to … generate significant value and returns for shareholders’.

A post on the School Bus Workers website in October 2007 tells us: ‘First Student has had a major problem with allowing their employees to unionize… They want to run the routes as cheaply as possible, whether it means using unsafe equipment or not purchasing supplies ... When the mechanics have to ask to purchase motor oil ... there’s a major problem somewhere in this company.’

The unions say that First Student has an anti-union policy, the buses are filthy, it can take kids an hour to get to a school a mile away, and schools have to cut their day because buses are so late.

FirstGroup’s chairman says that the North American strategy is to ‘closely manage our cost base in order to offer a compelling service to our customers, parents and students’. First Student is the largest school bus carrier in North America, with contracts with 500 school districts. They can run a crap service because passengers have no choice: and they threaten and bully union members because they want to ‘generate significant returns for shareholders.’

Remind you of anything?

First Student isn’t the only reason First is coining money – but it gives a nice illustration of the set of policies that First is pursuing so successfully in the UK market, whilst swearing blind that it loves its customers and it treasures its employees.