Ding Dong, Carillion’s Gone!
According to Wikipedia the name ‘Carillion’, (a business created in July 1999 following a demerger from Tarmac) “is a corruption of the word ‘carillon’ (a peal of bells) and was intended to give the construction business a clearly defined, separate identity, and to distance it from its construction roots”.
Well I imagine those same construction roots will be pretty happy that distance exists given that they were formed in 1903 as Tar Macadam Syndicate Ltd and are still performing well as Tarmac today.
Credit where credit’s due
The whole sorry story of this latest business collapse by a company considered too big to fail puts the subject of bad debt protection (AKA credit insurance) back in the spotlight. Not that it should ever have been put back in the dim recesses of financial thinking given the trail of blue chips falling off a cliff since the ten year old crash.
This one does have a slight twist to it however and one should be hugely sympathetic to the plight of thousands of sub-contractors and workers now losing out. After all, if the government considered Carillion a safe pair of hands for billions of pounds worth of public infrastructure projects (even after several profit warnings) then those further down the chain can’t really be blamed for thinking their money was safe.
Rub of the Green
It’s a strange turn of events that sees another business run by a chap called Philip Green hit the skids with a gaping hole in its pension fund. Perhaps more worrying is both Philip’s have at one time or another been advisers to the government, the latest namesake even advising on corporate responsibility.
In the wake of these high profile failures it’s not hard to imagine that the many ‘Bob the Builders’ in the country, owners of small firms who always pay their stamp and staff on time, have more understanding of corporate responsibility than a Knight or a Commander of the Most Excellent Order of the British Empire.
Hopefully, all the Bob’s now sweating it out and worrying about continuing to pay their stamp and staff on time might consider some bad debt protection for future jobs. It is available, even in the construction industry.
It might be worth it. After all, sashes and gongs can’t stop cheques from bouncing.
By Steve Leeves