Outgoing CEO Simon Thompson (left) has been replaced by Martin Seidenberg. Photo: ROYAL MAIL GROUP/AFP/Getty Images
The challenge Seidenberg faces cannot be underestimated. One of the worst strike campaigns in a generation came to an end last week as two-thirds of the CWU members backed a 10% wage increase over three years and a £500 one-time bonus.
In turn, the CWU gave in to the Royal Mail Board's demands for some changes to working conditions, such as later start times to allow better distribution of deliveries throughout the day.
“With the Royal Mail brand, unrivaled scale, and postmen and women linking every household and business in the country, we have many opportunities ahead of us. But we must take advantage of it,” Seidenberg said when he was appointed.
“By enabling Royal Mail to best meet the growing needs of our customers, we can benefit both customers, employees and shareholders.”
Seidenberg is a man of parcels through and through. He worked for 15 years at Deutsche Post before joining GLS Germany in 2015.
Before taking over as chief executive of GLS in June 2020, Seidenberg faced repeated price increases in Germany and also championed zero-carbon deliveries.
And under his leadership, GLS revenue grew 47% over the past three years. Profits, meanwhile, have increased by two-thirds over the same period.
But the future of Royal Mail letter delivery will likely determine whether Seidenberg succeeds where Beck and Thompson have not.
Royal Mail lobbied the government for nearly two years to change laws requiring letters to be delivered six days a week. From customer feedback, bosses say households are not interested in Saturday mailing letters.
Letter volumes have dropped 30% since the start of the pandemic, and Chairman Keith Williams, a rare permanent member of Royal Mail's board, has repeatedly warned that it will be hard for the company to turn a profit if ministers refuse to go along with the company's demands.
Sources close to the company believe government opposition is easing. The line from Westminster earlier was that there were “no plans” to make any changes to the postal laws, known as the Universal Service Obligation (USO).
Right now there are “no current plans” to make any changes – an important distinction, sources insist.
Postal workers at Royal Mail reached a wage settlement last week, ending a long period of strikes. Photo: JULIAN SIMMONDS
It is widely accepted that a change in postal laws is unlikely to happen this side of the general election. And with Sir Keir Starmer's party high in the polls, Labor's point of view may be more important than Tory's.
The Labor Party has yet to prove itself in Saturday's deliveries. “However, the Labor position will have to be taken into account with the position of the union,” says one authoritative source.
During the year-long dispute, the CWU opposed any change to the USO. However, last week Secretary General Dave Ward did not rule out support for moving to a five-day letter service for the first time.
“If you have a six-day drop in letters, there will come a point where you could lose more jobs in six days than if you went five days—compressing letters to those five days,” he told members in a video posted on the CWU Facebook page.
“As long as we support the USO, we may have to consider a five-day scenario.”
He added: “We want to keep the USO… But we will have to look at the five-day option.”
The final parallel between Seidenberg and Back is that the Royal Mail has returned to its old executive structure. Back's departure prompted Williams to become executive chairman, Thompson became chief executive of Royal Mail, and Seidenberg became in charge of GLS.
Having two executives running two separate parts of the group has raised fears that the stage is being set for it to split in two.
Union leaders have previously said splitting the company into two is the ultimate goal of Royal Mail's biggest shareholder, Czech Sphinx billionaire investor Daniel Kretinski.
The decision to return to the group's CEO role could assuage fears of an imminent Royal Mail split. And Seidenberg will now appoint the leaders of Royal Mail and GLS.
Welcoming cautiously at Thursday's appointment of Seidenberg, CWU's Ward said it followed “a significant period in which the company was without direction and leadership.”
He added: “While our members want to get away from the dispute, top management cannot get rid of their anti-union mentality. The new CEO will face significant changes in both staff and approach.
“Now is not the time for words. This is the moment for action.”
Recent Comments