Reassurance from the CEO of UK PLC

Dear Shareholder,

Don’t worry. We had some silly nonsense last week from a couple of former employees. One I think was the Head of our company sanitorium for a bit, and the other apparently worked in security. They had some crack pot notion that we needed an immediate vote on whether I should stay as CEO. I told them in no uncertain terms that my policy of never knowingly underspent, and never knowingly underborrowed, was going down a storm with our core customers and stakeholders, so there was no need for any vote.

It was gratifying that after a few hours all the Board members agreed and came out in praise of my leadership and our collective strategy. It is true I had to have words with our Finance Director, our Deputy CEO and our Company Secretary, but they soon got the point. None of them want to see Conco take over. They all mainly seemed to want to be more associated with our successful strategy, and were gently arguing over who could be on TV more to explain it all to people. A little friendly rivalry amongst Board members is a sign of life and energy in your company, and is to be expected.

I do want to warn you about a few of the annoucements coming up. Our Finance Director is going to have to say that one day we will borrow less than today. He tells me that the markets who have been so good to us for so long, lending us so much money, are getting a bit jumpy. Apparently if we pretend that we will cut the deficit sometime over the next four years they will calm down. Meanwhile we can carry on with our preferred and correct approach of achieving record borrowing.

Some Directors also do not think it is right that we highlight the class background of our competitors, Conco. It turns out that one or two of our Directors are also from posh schools and rich families, so they are feeling the heat. With the Board elections coming up I have decided to humour them a bit. We have decided to brief out regularly that we are not going to make class an issue in the future decision on who should run UK PLC for the next five years. That will suit everyone, keeping the issue in the limelight whilst allowing us to reassure anyone worried by saying we are not going to make it an issue. I think you will agree that’s a pretty clever way of dealing with this important question.

Whatever we may say, I want to remind you of our core strategy which will stay the same. It is to spend more, to borrow more and to print more than any other management of UK PLC has ever done. We are not just setting records – we are establishing totals that are off the charts. The graphs need bigger paper and log scales to fit in all our borrowings and liabiliites.

We are soon posting the large bonuses to the hard working employees in our banking subsidiary. I am sure they will be relaxed if at the same time we have to make statements about how bankers should not get large bonuses. If we don’t, others might get jealous. We are still working on better bonus packages for administrators, who also deserve it. Owing to the difficulties staff have had getting in in the snow there will be delays in implementing quite a few of our plans, but we should be able to keep the essential supply of new press releases going.

We intend to use all this money to recuit more staff, to increase staff pay rapidly, and to offer more money to our loyal customers through our system of bonus payments or benefits. This is the way to defeat Conco, whatever whatshisname might think. I will not be deflected from my aim.

Yours, secure in my office

CEO

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35 Comments

  1. Posted January 13, 2010 at 8:09 am | Permalink

    I wanted to laugh, then I nearly cried. What have they done.

  2. Posted January 13, 2010 at 9:15 am | Permalink

    Dear CEO. I'm certain that that Statement will reassure the majority of shareholders, who are very aware of the time, energy and Corporate assets you have invested in ensuring the Company's place in the global community. Transfering the bulk of decision-making to the unaccountable, unelected European Conglomerate, thereby streamlining Management and reducing the ability of junior directors to interfere with your masterplan will in time be seen as a pivotal point in your incumbancy.
    A minor point. A former employee in HR has written a book about his experiences in your employ which were, apparently not salubrious. The Book has been a runaway success, with over 8000 copies pre-ordered. The unstinting efforts of your PR Dept have merely added to the publicity surrounding the book. Can you reassure shareholders about the events in the book from the inside out, as it were?

  3. Posted January 13, 2010 at 9:30 am | Permalink

    All very well – but look behind you. At China and India that is. There is a big speculative bubble casting a shadow over us. The good news for China is that they have held their breath in and because they are a command and control economy they can let their breath out slowly. China has kept low exchange rats to boost their economy – now that is coming to an end.

    The unfortunate thing for us is that one of the ways they will do this it to inflate the price of exports to slow growth – and we will inflate the price of imports. Imported inflation will come fom 2 sources (1) currency revaluations pushing up the price manufactured goods and (2) global demand for raw materials, such as meatm wood and iron pushing up their price.

    We in the UK will face large inflation rises that will reduce our standard of living. The question I puzzle over is whether raising interest rates is the best response. What will higher interest rates do – not a lot, just dampen demand – in the case of imported inflation.

    I feel we are going to go through a period where the economic correlation/causual relationship between inflation and growth will be greatly dimished.

    In the long run it will be a good thing that we can compete with China – but to compete it means we must be competitive. Which means lowering our relative standard of living and wages. I believe inflation will be a key mechanism to achieve this. But the long term difference between the Western and Eastern economies will be that we are spenders and they are savers. Our money will flow East and sit in bank accounts. Perhaps a deflationary fate awaits us all.

    • Posted January 13, 2010 at 10:58 am | Permalink

      Good post, although I'd argue that the main difference east/west is work ethic, and that's a lot harder for us to flip than spend:save ratio. And inflation in the East could cause them to hold hard but liquid assets rather than cash in banks, which could also get interesting i.e. turn a whole region of "savers" into "hoarders".

      • Posted January 13, 2010 at 8:35 pm | Permalink

        Yes, agreed too. China (and to some extent India) are countries of only-children (i.e. one child policy). Ignoring the sex ratios, a lot parents focus on their only child. Which on noe hand creates a country of spoilt brats, but also a country of eldest children who achieve academically.

    • Posted January 13, 2010 at 12:02 pm | Permalink

      This is simply a reversal of what has happened in the last 10 years which resulted in the bust. Import prices falling thus domestic prices could inflate at a higher rate resulting in "average" inflation of only 2%.

      Now it reverses, imported inflation means domestic deflation in order to hit 2%. This means higher interest rates, lower house prices and much higher unemployment!

      The current inflation targets are the wrong sort. They lead to excessive booms and busts as they ignore domestic versus imported inflation. It will be abandoned.

      • Posted January 13, 2010 at 8:05 pm | Permalink

        Agreed – breathe in then out.

        Agreed on inflation targets too – the UK economy is skewed by house prices. I often think their ought to be a mortgage "tax" that could be earmarked to smooth out house prices and build houses for key sector workers.

        • Posted January 14, 2010 at 11:30 am | Permalink

          Simple way to restrict house prices is to set a maximum 3.5 times salary for a mortgage and a maximum 75% LTV.
          Planning laws need to be changed to allow more houses to be built.

          Who exactly are "key workers" anyway? The only reason "key workers" need cheap housing is because the benefit system pays for the low paid to live in high cost areas and thus require a support system around them.

  4. Posted January 13, 2010 at 9:33 am | Permalink

    Dear CEO,
    Please be assured that we never gave much credence to the little spat we witnessed last week. We understand how ungrateful former employees can be. When we remember how you rose to your current post, and consider how many bodies you must have help bury, the idea that you would baulk at disposing of a couple more is inconceivable!

    We were disappointed that your fellow board members took so long to back you publicly. It was generally thought that you would have been able to prime them by Blackberry (or some other fruit) much more efficiently than this. Perhaps they need a little more re-education – you should have continued playing catch-the-Nokia with them for just a little longer.

    Don’t worry about the reaction to the Finance Directors pronouncements. We all know that he’s only there for appearances. How else can you explain those comedy eyebrows? It’s understood that your spending record will need bigger charts, and that this is a cunning way to increase spending in the print industry. Presumably you will also order an industrial quantity of rose-coloured glasses so that we can all read them to best effect.

    Regarding the bonuses for the banking subsidiary – we do appreciate that because of the slight ripple in the stable (hint, hint) of one of favoured banking arms, you will have to make them happier about the millstone you asked them to wear as a necklace. Without this, how can you be sure that they will insist on retaining your services on their board if you ever decide to step down from your existing post as CEO.

    Yours, out in the cold

    Mick Anderson

    PS. Congratulations on arranging for another few inches of snow. It’s good of you to make sure that it remains on the roads and pavements for as long as possible, and very organised to ensure that all the staff you employ to keep them clear are busy doing other things.

  5. Posted January 13, 2010 at 10:05 am | Permalink

    Of course a real company can't just print it's own money.

  6. Posted January 13, 2010 at 10:24 am | Permalink

    Gordon Brown lost the plot a long time ago. However his statement that if Labour win the coming election he intends to serve a “full term” as PM is just delusional.

    • Posted January 13, 2010 at 12:29 pm | Permalink

      I wonder how many votes his promise to serve a full term has cost him. One can only wait and hope

      • Posted January 13, 2010 at 8:56 pm | Permalink

        Pure unadulterated posturing self importance on his part. He just cant quite resist saying it can he. Such self righteousness, never mind whether we vote him the privilege of another term , he thinks its his by right. Several expletives are forming under my breath…

    • Posted January 13, 2010 at 4:21 pm | Permalink

      It's not only delusional – to labour it's fatal and salvation for the country. Who can take much longer the scowling, dour face and grating, relentless voice [with occasional flashes of totally innapropriate smiles and strange grimaces]. His podcast – can't now remember even what it was about but i'm sure most everyone will remember it – was an absolute self-defining classic and will be re-viewed fondly for years.

  7. Posted January 13, 2010 at 10:47 am | Permalink

    A funny thing just happened to me. I opened my e mails and one was from Labour List. On it were about 170 names of local councillors, prospective MPs and that sort of person, all named and with their titles written underneath. They were signing a letter complaining about the lack of leadership shown by the Prime Minister over the expenses scandal and calling for some disciplinary measures to be taken against any MP found guilty by an enquiry which they wanted to be set up. They were very disappointed about way the whole thing had been dealt with.
    Why did I erase it absolutely?
    There seemed to be a huge disappointment and anger underlying the letter, though. Or was I imagining it?
    Somehow, I do not think the CEO is going to be that concerned.

  8. Posted January 13, 2010 at 10:58 am | Permalink

    "was going down a storm with our core customers and stakeholders"

    Yet another delusion you are having there CEO.

    The polls tell a different story. I think there will be a takeover bid by Conco in March/April and the takeover should be complete by May 7th.

    Enjoy your enforced retirement from UK PLC. I don't think you'll have any trouble getting a job in one of these supranational bureaucracies. They tend to like people who are willing to invest a lot of money (regardless of whether it works or not) and tell people how to live their lives.

  9. Posted January 13, 2010 at 11:07 am | Permalink

    Yes, it was a jolly good move by your CEO to pre-empt Conco in this "class war" mischief. And fortunately they can do nothing about it with Mr C. in charge.

  10. Posted January 13, 2010 at 11:14 am | Permalink

    Dear CEO,

    You must be pleased; I see that you managed to retain your post without having to resort to those dreadful secret ballots which are such anathema to you. I wonder what plans you have to deny the shareholders the opportunity to exercise their secret votes at the forthcoming general meeting. You have such an impressive record in denuding the powers and activities of other shareholder appointees in the House of Commons that it is well within your capabilities to dispense with their very limited remaining services. However, if this is a little too much to achieve, even for someone with your megalomania, I am sure that you are confident that your contingency plan of increasing the size of your workforce and customer base will ensure that you retain your office. After all, you must be encouraged to see that your mentor, President Mugabe in Zimbabwe, has prospered whilst paying lip service to the rights of shareholders. Having secured your position later this year, you will be able to pursue with even more vigour your policies and bring this company to the same level as Zimbabwe.

    Yours in trepidation,

    A Frozen Out Shareholder

  11. Posted January 13, 2010 at 11:15 am | Permalink

    P.S. My implied threat to call an EGM with the likely liquidation of the Company seemed to have the desired effect. Scorched earth rules OK!

  12. Posted January 13, 2010 at 11:35 am | Permalink

    Unhappily for me, taxpayer and business generator, I do not qualify for the NuLab Clubcard. Drat.

  13. Posted January 13, 2010 at 11:39 am | Permalink

    Conco issued statement:

    "we will win this takeover by not explaining how we expect to return greater value to the shareholders of UK PLC but we will pull several levers that we have labelled A, B, & C and watch and wait. We have no idea what these levers do, or which services will be abandoned by this policy"*

    If the conservative party manage to win an election with a big enough mandate to allow change I fear the people present do not appreciate the opportunity that they have to make huge structural changes to the UK economy. I don't think that they have the vision required, or the ability to challenge the status quo

    *past performance is no guarantee of future earnings

  14. Posted January 13, 2010 at 12:40 pm | Permalink

    Sorry for OT but I could not resist this one from the spectator.

    This, from Dr David Viner, a senior research scientist at the Climatic Research Centre at the University of East Anglia:

    “Within a few years winter snowfall in Britain will become a very rare and exciting event. Children just aren’t going to know what snow is.”

    March, 2000.

    ttp://www.spectator.co.uk/rodliddle/5694418/still-more-weather-forecasts.thtml

  15. Posted January 13, 2010 at 1:22 pm | Permalink

    Dear CEO,
    My shareholder income has diminished greatly during the time you have been in command and I am seriously concerned that you intend to borrow even more money to fund the company’s overpopulated and inefficient infrastructure. If I personally wish to borrow money I have to provide the lender with some form of collateral. I would ask, therefore, “What collateral can you provide your lenders against which to secure the substantial loans you imply are needed to keep the company afloat”?
    Were you perhaps considering offering up the coal, steel, glass, aluminium or one of the other manufacturing industries as collateral? If so, please bear in mind that these are all now defunct, foreign owned or already so deeply in debt that their collateral value will be extremely small. Might I suggest a few alternatives to borrowing or printing yet more money? For example, substantially reducing the amount of money you pass to the EU each year; stop wasting money on climate change carbon trading schemes (which are of no benefit to the company); eliminate the regional government offices and their tens of thousands of hangers-on; stop giving money to overseas corrupt and undemocratic governments.
    There would seem to be endless opportunities available to you as CEO to make real economies without borrowing on the scale you intend and I have very real fear that the balance sheet will soon become so unbalanced that the company will have to be sold on the open market at a knock-down cost. You would be held personally responsible if that were to happen and I am sure that there will be many who, like me, will be determined to ensure that you are removed from office at the next shareholder meeting.

  16. Posted January 13, 2010 at 1:48 pm | Permalink

    For reasons, doubtless, of commercial confidence Conco has not mentioned that in order to help out its associates it has taken on the full liabilities of some of its subsidiaries in warmer climes. It is said that around one trillion pounds worth of assets has been lost down the Caymans Trench, but nobody is sure where. Also they do not want to look as there are dormant volcanoes deep down that are not as safe as they were supposed to be.

  17. Posted January 13, 2010 at 3:12 pm | Permalink

    Dear CEO,

    I wish to thank you personally for your invitation to join the board.I rather like the idea of nationalising everything.As I will be leading the team on this one I would like to assure all shareholders that a substantial remuneration package will be paid to all.This will include an updated figure for all board members of 15 times the national average with a 50% indexed linked pension as a minimum.I feel that this figure is necessary otherwise such outstanding management ability will go elsewhere.This will be funded by the Endogenous Growth Fund . Further funding,should it become necessary, will be raised by unused asset disposal and lease back.This has proved highly succsesfull in the short term,and the future implications can be left to those' carrying the can.'
    My colleague will be issuing a new laptop to everyone in the company and free tuition will be available at all our training facilities.There will be no need to attend our work centres as 'working from home' will no longer present a problem.Various claims and holiday entitlement can be handled on line.
    I look forward to this new challenge, and can assure you that I am now fully recovered and can look forward with confidence to a wholenew dimension of financial investment.

    Your sincerly,

  18. Posted January 13, 2010 at 3:39 pm | Permalink

    One of my blog subject titles is "Basket case Government". The jury has definitely convicted!

  19. Posted January 13, 2010 at 5:51 pm | Permalink

    Dear CEO,

    Thank you for explaining the situation with such clarity and also for putting into perspective the failings of your major competitor, Conco, and its CEO.

    You must be pleased that every week you are given the opportunity to boast about the achievements on your Stakeholders behalf, especially as the questions from Conco CEO allow you to put all of the blame for any recession, if there is one, on Conco, because their policies, which they do not have, did not work!

  20. Posted January 13, 2010 at 7:21 pm | Permalink

    I must say, I was rather disappointed when the Public Relations director to your predecessor tried to link your name with the worse than expected results of our expansion into Middle Eastern territories. How he can lay any blame for this endeavour at the Finance Directors door is beyond me. After all we are reassured week after week by the statements you make in your Q&A session with Conco that we have the best man (indeed, the only man!) for the job at the helm.

    Your record is unparalleled in the history of governance and your name will surely resound around this isle for generations to come.

    With a Captain of your distinction at the tiller I'm sure that our Company will be as unsinkable as the Titanic as you lay the foundations for a future none of us could ever have imagined for our children and grandchildren.

  21. Posted January 13, 2010 at 7:39 pm | Permalink

    May I enquire why you have not posted my contribution made earlier this morning?

    Reply: I have had a very busy 24 hours. To speed moderation would authors summarise the main point from an outside website, as references to such sites slows down moderation.

  22. Posted January 14, 2010 at 1:54 am | Permalink

    John
    Unless "Conco" can get "Somebody" to ensure "it" happens on Gordon's watch then i expect "Conco" to have a very hard time of it.

    I recall back in 81 when we rioted & burnt half the city down (Where we didn't live) & i had my one & only meeting with the female CEO of "Conco" at the time……..

    John, your got to pull the stops out here, if "it" doesn't happen on Gordon's watch Labour will bonce back in no time………look "DC" has won the 1st GE, he is already fighting the second.

    Mike

  23. Posted January 14, 2010 at 10:25 am | Permalink

    Dear CEO,

    you forgot to mention how you have opened the tap of immigration even further.

    you have rubber stamped even more sponsership applications for the (overseas-ed) outsourcers to bring in folk on intra company transfer and other work visas next year.

    you are allowing (overseas-ed) nationals to displace British workers.

    you are failing to provide the resources to police the system, so that abuses reported in their thousand to UK borders agency regarding the (overseas-ed) outsourcers go unchallenged.

    you are practising complete open doors immigration while cynically claiming "british jobs for british workers" as one of your slogans.

    congratulations on taking politics to a new low.

    yours

    the silent majority

  24. Posted January 14, 2010 at 10:38 am | Permalink

    i dont know why you keep editing out india?

    table of companies getting the most intra company transfers is here. name of company, percentage of total intra company transfers their company gets, and nationality of company.

    Tata Consultancy Services 13% India
    Infosys 9% India
    Wipro 7% India
    Cognizant 6% India/USA
    Tech Mahindra 5% India
    Satyam 2% India
    HCL 2% India

    these are the top 7.

    the companies lower down the list are typically american or eupropean companies with operations in india primarily bringing in indian nationals.

    i repeatedly mention indian nationals as the problem because that is factually correct.

    why do you not want this acknowledged?

    but hey its your site, moderate this out if you want, ill still love you 🙂

    Reply: I did not know the numbers and think we need to recognise that this issue affects more than one country

  25. Posted January 17, 2010 at 12:21 pm | Permalink

    Dear CEO,

    May I offer you grovelling congrats on fighting off the insidious attempt on your magnificent tenure as Captain of our beloved ship?
    I may be only a minor shareholder in the security wing of our enterprise, but I am sure I can rely on you to safeguard my position as you have so skillfully done with yours. I refer to your pledge that frontline services to the Corporation will not be affected by any cuts in (Public) spending that may need to be made to readjust the forthcoming balance sheet, in the short term of course! However, if you do have to ask me to take a lengthy sabbatical, can you guarantee my 'parachute payment' as laid out by your magnificent Board, will not be affected by those cuts?
    No I didn't think so.
    Still, better than Conco can offer I am sure! (Or am I?)
    I am still, for now, your faithful servant.

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  27. Posted March 30, 2010 at 8:39 am | Permalink

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  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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