FirstGroup - Change of Chairman

[Olaf]

As expected, there will now be some house-cleaning on the cards for FirstGroup:
http://www.cityam.com/211412/new-chair-aims-get-firstgroup-back-track

New chair Wolfhart Hauser aims to get FirstGroup back on track

FirstGroup has announced new chairman Wolfhart Hauser will take over from John McFarlane in July, becoming the firm’s third chairman in less than 18 months.

Hauser has been the chief executive of Intertek, the London-listed safety and quality service provider, since 2005. He is also is a non-executive director of Associated British Foods and of Reed Elsevier.

German-born Hauser is a qualified doctor, having studied at the Technical University Munich.



The incoming FirstGroup chair has been successful during his time leading Intertek....

I expect that the bus operations will the first to receive attention, but failure to win recent franchises will be near the top of the list. Expect a shake-up.

 

[WatcherZero]

3rd in 18 months, interesting going for a man whose experience is in Food Manufacturing and Health and Safety.

 

[Robertj21a]

Well it certainly needs someone with significant ability to sort out the mess.

 

[3141]

As expected, there will now be some house-cleaning on the cards for FirstGroup:
http://www.cityam.com/211412/new-chair-aims-get-firstgroup-back-track

I expect that the bus operations will the first to receive attention, but failure to win recent franchises will be near the top of the list. Expect a shake-up.

They did of course win one franchise less than three years ago - Inter-City West Coast. But DfT had made a mess and the award was cancelled.

If that hadn't happened, a new chairman might now have the task of sorting the problems arising from an over-optimistic bid.

 

[Tetchytyke]

Well it certainly needs someone with significant ability to sort out the mess.

It'll be interesting if a German from a food manufacturing background is that person, won't it.

It's just fiddling with the deckchairs whilst the Titanic sinks.

 

[3141]

It's just fiddling with the deckchairs whilst the Titanic sinks.

I thought that actually they fiddled on their violins during that event.

 

[Robertj21a]

It'll be interesting if a German from a food manufacturing background is that person, won't it.

It's just fiddling with the deckchairs whilst the Titanic sinks.

Quite possible that someone from outside the industry will have a much clearer view of the critical issues - the old 'can't see the wood for the trees'. If he is a good manager then he can use his 'manager skills' to manage anything - the tasks to be managed are not the key concern.

 

[superkev]

Quite possible that someone from outside the industry will have a much clearer view of the critical issues - the old 'can't see the wood for the trees'. If he is a good manager then he can use his 'manager skills' to manage anything - the tasks to be managed are not the key concern.[/QUOTE
Sorry but I'm not a fan of this modern way of managers not needing to know the actual job.
I can't think of many successful football clubs where the manager is a non footballer.
k

 

[306024]

Not one for stocks and shares at all, but as a former First Great Eastern employee, we got shares which at one point reached the dizzy heights of over £7 each. The wise sold theirs at that price, the stupid (me) now have shares worth just £1, shows how First's fortunes (and mine) have declined

 

[Robertj21a]

Quite possible that someone from outside the industry will have a much clearer view of the critical issues - the old 'can't see the wood for the trees'. If he is a good manager then he can use his 'manager skills' to manage anything - the tasks to be managed are not the key concern.[/QUOTE
Sorry but I'm not a fan of this modern way of managers not needing to know the actual job.
I can't think of many successful football clubs where the manager is a non footballer.
k

It's not any 'modern way'.

Managers are, not surprisingly, paid to *manage* (usually other people) so that the key aims of the business are achieved. A good manager doesn't necessarily need to know much of the detail of the 'product' since that's what he's employing others to do.

 

[WatcherZero]

Hes not a manager though hes a Chairman of the board who has to guide the board to make strategic business decisions based on his estimation of the strength of the company and his understanding of the market, as well as being responsible for recruitment of directors.

 

[Robertj21a]

Hes not a manager though hes a Chairman of the board who has to guide the board to make strategic business decisions based on his estimation of the strength of the company and his understanding of the market, as well as being responsible for recruitment of directors.

Yes, agreed, and he is already a non-exec director of Associated British Foods and Reed Elsevier. Actually sounds like it should be a good appointment.

 

[Tetchytyke]

I'm not convinced that people from a non-transport sector understand the challenges of the sector. We saw that at Stagecoach: when souter took a back seat the business tanked, and when he came back it rose again.

First are in the mess they are because they don't understand the sector, judging each route or garage purely on its profit and loss account. As a result they lost market share in a very dramatic way, and they'll struggle to ever get it back. How they managed their Lothian business was a lesson in how to fail, but the bankers thought it was a great idea at the time.

 

[WatcherZero]

Yes, agreed, and he is already a non-exec director of Associated British Foods and Reed Elsevier. Actually sounds like it should be a good appointment.

I was saying it was a bad appointment not a good one. While having other directors from non core activities broadens the skill base the Chairman should be the most clued up member of the board not the least.

 

[Robertj21a]

I was saying it was a bad appointment not a good one. While having other directors from non core activities broadens the skill base the Chairman should be the most clued up member of the board not the least.

Yes, I know you were. I'm assuming that First Group feel that his role in two other, significantly large, companies will prove very useful.

If not they'll be looking for a 4th Chairman fairly soon - if they survive that long.

 

[185]

.........If not they'll be looking for a 4th Chairman fairly soon - if they survive that long.

Why are people so negative about the future of FG?

Make or break for them with the next round of franchises, otherwise First'bus' will be all that's left, alongside their not-very-buoyant US bus operation.

 

[Carlisle]

As expected, there will now be some house-cleaning on the cards for FirstGroup:
http://www.cityam.com/211412/new-chair-aims-get-firstgroup-back-track


I expect that the bus operations will the first to receive attention, but failure to win recent franchises will be near the top of the list. Expect a shake-up.

Until it's very recent East Coast win , Stagecoaches record isn't really any better, only winning two franchises in its entire history despite bidding for most of the others over the years

 

[Flying Snail]

Until it's very recent East Coast win , Stagecoaches record isn't really any better, only winning two franchises in its entire history despite bidding for most of the others over the years

If you ignore their stake in VT, their profitable and growing UK bus business, their US bus business, their European bus business, their bus building business, etc.

Oh and unlike First who have been selling up or simply abandoning operations across the UK, the only large market withdrawal by Stagecoach, the East London group netted them a massive profit which they bought back a few years later at less than a quarter of the price.

The biggest difference between the two groups IMO is that Stagecoach are run by people who understand the core of their business and understand that micro-managing businesses over the heads of knowledgeable local management is a recipe for failure.

 

[Carlisle]

I was mainly referring to the Rail side of the business ,I agree when it comes to busses/ coaches etc Stagecoaches strategy seems to have mostly been more successful than First certainly as far as the UK market is concerned

 

[3141]

Until it's very recent East Coast win , Stagecoaches record isn't really any better, only winning two franchises in its entire history despite bidding for most of the others over the years

You could say something similar about National Express, who did well in the initial round of franchising and then picked up the Prism franchises as well. But since winning Greater Anglia in 2005 all they've managed is East Coast, where they overdid the bid, and succeeding in retaining Essex Thameside.

And as for Arriva....they weren't even there when franchising began.

It's true that Stagecoach won only two franchises initially, one of which was Island Line, and then later East Midlands. But they also retained SWT, and they got a 49% stake in Virgin Trains. They own the Sheffield Supertram and they did at one time gain the Manchester Metrolink management, though they later disposed of that. SWT is a massive franchise, and the company that runs that doesn't need many others.

If you're a realist looking at rail franchises, what you probably want is a small number of operations of which you can make a success. You don't need a larger number, but you have to keep bidding because the ones you've got will come to an end and you may not be able to win the same ones the next time round. I bet the board at Go-Ahead were really pleased to win TSGN, because if they hadn't the end would have been in sight with LM and South Eastern and no certainty about getting anything else.

First didn't do so well in the initial franchising round, winning only Great Eastern. Then they were able to pick up Great Western and North Western. Then they won Transpennine in 2004 and Greater Western and FCC in 2007, and they looked to be doing even better when they were awarded West Coast in 2012.

But everything experiences a rise and a fall. In the rail business you could actually be putting in some very interesting bids, but unfortunately finding that someone else has thought of something just that bit better.

Still, there's no doubt that, in the end, results count, and First absolutely do need to keep a stake in the rail business and improve their fortunes in buses as well.

 

[Carlisle]

Interesting I broadly agree with what you say , sorry I forgot that Island Line had also begun as a seperate franchise, having visited it last summer , the ancient trains and stations having gained little more than a few coats of paint since BR days means personally I wouldn't count that as one of Stagecoaches great successes