It may have come sooner than expected but I don't think anyone is surprised at this outcome:
First Devon and Cornwall today (23 July 2012) announced plans to discontinue its bus services in the North Devon area, including closure of the Barnstaple depot. The company also confirmed that it has started the collective consultation process with trade unions on the possibility of redundancies.
Firsts bus services in North Devon have underperformed for a number of years, despite the introduction of a variety of marketing and promotional initiatives. The company is now faced with extra cost pressures due to the economic climate and cuts in external funding and routes are now being discontinued in order to ensure the long term sustainability of operations elsewhere.
A range of alternative options including the potential sale and transfer of employees and assets to Stagecoach Group plc were fully explored. That option will no longer go ahead following the Office of Fair Trading's announcement on 10 July that it was referring the case to the Competition Commission.
Giles Fearnley, FirstGroup Managing Director, UK Bus, said: "We understand that this news will be distressing for employees affected by the decision and that it will similarly cause our customers in the area some concern. We apologise and will be supporting affected employees over the coming months, as well as working with Devon County Council on the future of bus services in the area. We will give customers ample notice of the date that services will cease to operate in North Devon.
"We will be working hard to minimise the extent of redundancies, trying to redeploy people where possible. We would like to take the opportunity to stress that the decision to close the North Devon operation is a business driven one and does not reflect on the effort or individual performance of the employees in North Devon.
"We are progressing our strategy to reposition and rebalance our UK Bus portfolio to restore operating margins and help facilitate improved growth and returns. The decision by the Office of Fair Trading to refer our proposed sale of our North Devon operations, where we had a uniquely high degree of overlap with Stagecoach, was disappointing. We are confident, however, of future successful transactions in the coming months as a number of potential bidders exist in the markets where we have identified other businesses for disposal.'
First Devon and Cornwall today (July 23) began its official consultation process with affected staff. This will include offering opportunities in other areas. The timescale for closing the business will be confirmed once the consultation with the affected employees has been completed.
Notes to editors
A timescale will be confirmed in due course.
The North Devon business comprises of the depot facility in Barnstaple, a fleet of around 30 vehicles and ten routes (Services 1, 2, 3, 5/5C, 8 (operates summer only) 30/30C, 31, 32, X7 and X9). The routes cover Appledore, Barnstaple, Bideford, Braunton, Bude, Coombe Martin, Fremington, Ilfracombe, South Molton, Swimbridge, Westward Ho! and Woolacombe.
I feel very sorry for the drivers and other staff affected by this announcement. First had at least tried to help them by selling to Stagecoach who would have then taken on the staff with the business with at least some degree of job protection through TUPE. Thanks to the Competition Commission this can not now happen so the staff loose out. Stagecoach are now free to register any of the routes they like and equally free to recruit any staff it likes under whatever terms and conditions it chooses. Stagecoach are possibly the only winners in this sorry state of affairs. Thanks to the CCs insistence that competition is encouraged over and above the reality of the situation facing First, there will in effect be considerably less competition than before.
Rant over – for now!
Feel free to add your comments. I know many people share the same feelings as I do, but I am sure there are other views!
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A very sad outcome. Those of us who have been following this sorry saga could see it coming, but for those engrossed in the competition world could not see beyond the end of their noses.
ReplyDeleteAnd now, what good has it done?
Uncertainty and worry for the staff and loyal customers. Plus extra work for Devon County Council that they could, no doubt, have done without.
WELL DONE OFT!!! SO INSTEAD OF PROTECTING FIRST DRIVERS/STAFF JOBS BY TRANSFERING THEM IN THE SALE TO STAGECOACH..YOU HAVE MANAGED TO PROBABLY MAKE THEM REDUNDANT WHILST GIVING STAGECOACH THE SAME MONOPOLY THEY WOULD HAVE HAD FOR FREE!! THERE WILL PROBABLY BE LESS SERVICES IN NORTH DEVON AS WELL AS A RESULT!!!AND FIRST MISS OUT ON £3M TOWARDS THEIR DEBTS WHIOCH WOULD HELP SAFEGUARD ROUTES ELSEWHERE!!! FANTASTIC RESULT, HOPE YOU ARE PROUD OF YOURSELVES!!!
ReplyDeleteGood for First that they play hardball with the OFT - about time OFT realised that there is a real world outside of London.
ReplyDeleteGiven the North Devon ops were not as large as Eastbourne Buses it is astonishing that they referred the purchase to the CC.
At least First are clearly pointing the finger.
It is indeed a very poor outcome for all the staff and customers of First D&C in North Devon. I am wondering whether there will be a “knock on” effect for the Plymouth area? I realise it is not good for staff morale or indeed fair to all First’s employees at Plymouth to make any wild assumptions. I do feel however, since the 2009 bus war with Plymouth Citybus and the subsequent sale of Citybus to the Go-Ahead Group, the First D&C Plymouth operation is showing signs of neglect as well. The staff, especially the First drivers are absolutely excellent and I feel in many ways they are the ones that are keeping the operation going. The Ugobus brand is looking very tired and a shadow of what it was once. Historical services such as the 48 Wembury are now tendered with Devon CC with no evening or Sunday/bank holiday services. Many of the buses are comparatively old and even look quite shabby at times, with faded upholstery, peeling paintwork, transfers and even damaged body parts. I do hope this unsatisfactory situation with the Office of Fair Trading can be resolved, otherwise this could have a much wider impact within the whole of the First D&C operation.
ReplyDeleteSome perspective is required here.
ReplyDeleteThe only real losers are the staff at First, or at least those that Stagecoach doesn't take on (any differences to Ts & Cs/pensions apart). Whilst any artificially low fares may now rise, at least the residents of North Devon will have a larger network rather than two smaller ones.
Stagecoach (assuming they do indeed register some of First's routes) will not get the 'monopoly' for 'free'. It's undoubtedly already cost them a stack in management time and legal/consultancy fees. This will continue if they now go on and expand their existing network. Plus there will be the cost in bringing additional buses from somewhere, HR costs and costs involved in expanding/relocating their depot if necessary (I have no idea if it has surplus space or not). This all adds up, it's hardly a case of gaining First's work 'for free'.
First won't 'miss out' either, they will retain buses that are worth something and can be transferred elsewhere and they have a prime depot site to sell. Okay there may be some redundancy costs but it won't be a case of 'missing out' on getting back something towards their £100m target.
As an aside, if the X9 is seen as valuable, presumably that can be retained and controlled from Plymouth.
It is disappointing that First aren't going to fight to retain their presence in North Devon. If Stagecoach can operate in the area and find it viable to do so then surely First can.
ReplyDeleteI feel sorry for the affected staff at the company and hope that they all get a successful outcome for themselves whether that is with other operators or outside the industry.
A big question is how much of Firsts operations will need to be covered by a new operator (most probably Stafecoach). Is Stagecoaches 21/21A offering sufficient on the main Illfracombe - Barnstaple - Bideford - Westward Ho! / Appledore corridor. Hopefully it will be beefed up to replace Firsts buses. Of the other parts of Firsts North Devon empire, only Swimbridge and Woolacombe appear to me as requiring a new operator to come in.
It was so silly of the Transport lot to stop the selling!
ReplyDeleteStagecoach have still got First D&C but people and buses have been lost in the process.
Exeter is a fine example of how Stagecoach can improve areas!
The company is now faced with extra cost pressures due to the economic climate and cuts in external funding and routes are now being discontinued in order to ensure the long term sustainability of operations elsewhere.
ReplyDeleteitatonce.com/it-managed-services/