No sympathy for Gate Gourmet
Monday August 22nd 2005, 7:48 pm
Filed under: News & Current Events, Politics

On top of everything else, the management at Gate Gourmet are now claiming they may have go into administration within the next couple of days.

Now, before anyone gets any ideas about this having anything to do with current strike can I refer you to this:

“At the moment, Gate Gourmet is not a viable commercial organisation and so administration has to be a real probability,” said Mr Cook.

“As disappointing as it is, we’re faced with losing £25m a year, we’re faced with having no contract with British Airways that gives us commercial terms that we need and so we’ll end up in the situation of having absolutely no choice.”

Mr Cook added: “There is no way on this earth that anyone is going to support a business which isn’t making money and is in fact losing the amounts of money that we’re losing.”

Which translates to…

“We put in an unrealistically low tender in order to get the BA contract and now we’re screwed”

In short, this whole sorry mess is the fault of no one but the management and directors of Gate Gourmet themselves who’ve managed to shot themselves in the foot with the deal they negotiated with BA.

My sympathies here were always going to be with the striking workers anyway, this just confirms what I thought all along - management fouls up and the workers end up paying the price.

Gate Gourmet can go to hell as far as I’m concerned.

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2 Comments so far
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I’ve actually written some stuff on this on my site (this is not a pitch for traffic but it is a complicated issue).

Essentially GG could be a commercial entity but the interest bill is killing what could normally be a viable commercial enterprise. The FT reported today that GG has debts of £292m and we know TPG paid c.£390… the observer reported that GG finance UK made a profit of 5m and has cash of 30m

I suspect the company is profitable at the opex cashflow level but not in accounting terms (after interest effectively)

therre is no other operation that can supply BA with the food so whoever buys the kitchen will merely employ temps… its a disgrace

Comment by Jeremy 08.22.05 @ 10:08 pm

There are some interesting articles on www.thefirstpost.co.uk. Please go check it out.

Comment by James Morris 08.23.05 @ 10:51 am



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