A hundred management, admin and support roles are to go at the AA, plus the closure of the National Training Centre at Melton Mobray, according to documents seen today by CAT. Roadside patrols will not be affected.
In a memo to staff dated January 10 2018, the AA said: “We are today announcing a series of proposals involving restructuring of management and administration in a number of functions across the AA, with the exception of our frontline delivery teams in roadside operations and contact centres”. The memo added that the proposals are aimed at ‘reorganising and focusing accountability on our emerging strategic priorities’, as well as reducing ‘layers of management’ in order to reduce cost to fund frontline services.
Formed in Edwardian times, the AA has been struggling with the level of debt for years. In 2007 private equity group Acromas bought the company, but sold it in 2014 in a complex ‘accelerated float’ management buy-in, with £1bn of backing from 10 investors. The company was publically listed, but saddled with £2.7bn of debt. Share value dropped in August 2017 following the firing of Chief Executive Bob Mackenzie for gross misconduct.
Paul Grafton, Regional Organiser for the GMB Union said; “The closure of national training centre will reduce structured training and in our view impact on quality of service delivered by the patrol force”.
“All these cuts are a direct result of the unsustainable levels of debt left by the previous private equity owners” he said, adding: “It looks as if the latest activity is to squeeze the last drop out of the business before franchising”.
Figures show that the costs of financing the debts are £185m per annum in the last published accounts. Servicing the debt took up 66 percent of the Operating Profit of £284m for the year ending 31st January 2017.
In addition, the union says that the AA’s pension deficit is £622m, which in pound note terms is nearly double the £345m deficit that brought the demise of BHS.