Western Dave

Exactly

The harsh reality is it’s expensive doing business whatever the trade is your in. Even Tesco have a very small profit margin, I know people will raise an eyebrow but when you consider their turnover against actual profit as a margin in reality it’s small and they have to shift a lot of product to achieve it and they have a lot of resources. So imagine what it’s like for smaller companies with not so many resources and a competive market with fickle customers who’s total spend is discretionary

This applies to anything you buy in pieces "parts" go to your local car dealer and buy a engine, gearbox and clutch and it will add up to more than half the cost of a new car, or buy a new motor for a Dyson on line and pay about 45% of the complete new unit price. Like it or not that's the going rate.

Until you have a business you really don’t appreciate exactly what is involved and it makes no difference if the business is big or small it basically has the same issues proportionately and it’s often difficult to decide which is the more difficult customers or suppliers (both of which you can’t survive without)

Why the price increase? Well assuming everybody is right and the tolling is paid for let’s look at some known cost increase factors since the last run Chinese factories have had to increase costs due to wage and environmental increases imposed by the government Raw material prices have increase in the last few years Cost of shipping containers from China has increased UK transport costs from the ports have increased Minimum wage/General wages have increased The government has imposed pension increases on businesses (and further ones this year) Business rates have increased Utility bills have increased Companies turning over £2 Million plus have to pay a packaging tax Parcel companies have increased their rates General business costs have increased The exchange rate has gone the wrong way causing price increases I could go on but there’s a few to mull over The reasons and variables are endless We can all sit in our armchairs and be experts/admirers/moaners but unless we actually work for the company concerned it’s our thoughts and opinions, trust me I run a profitable business and have done for over 12 years and it’s certainly not fun anymore so whilst we are all entitled to our opinions and this forum is a great place to express them they are exactly that “ours” and im sure the all the manufacturers must look at what they read on here sometimes and wonder if what they are doing is worth it as does Andy Y I shouldn’t wonder. As somebody said to me on this forum very politely if your that bothered stomp up and commission your own model. No offence to anyone but I felt this needed saying PS Chamby this is not aimed at your post.

Do not underestimate how serious the situation is for Hornby ( and I certainly wish them well) it is clear from the trading update that they are in unchartered waters with regards to how sales will go or not as the case maybe due to the complete U turn in strategies and that is clear from the end of the statement where it says that they are determined to come through this! Having gone into companies before as much as your told how bad it is and preparing yourself for what you are going to find I have sadly found its always worse than you are first told. Often because people are in denial. When one manufacturer in my trade hit trouble I was called in and one of the things I asked fro was a actual cost of production of an item and was eventually given several sheets of old A4 paper hand written in pencil with costings and a list of parts required to make the item, this alone explained a lot but on further digging the item had been modified and updated without any paper trail or costings and was actually being sold for less than the cost of raw materials let alone R & D and labour costs. as previously mentioned here their company cost/structure is out of kilter. You have to be lean, efficient and offer total customer satisfaction (which is never enough nowadays for anybody)

i was not even thinking of this year I fully appreciate their is a relatively long lead time to production and actual delivery

Just a suggestion instead of endless and pointless frothing and wishing any not contact or visit your local shop and make a suggestion to them about a particular model and they can then speak to others to see if there 8s enough interest and we already know that both Hornby and Bachmann are up for doing limited Short runs and then wishing and frothing can maybe become reality

They have been doing it for years who would let them but they changed their standard terms of business last year to 120 days as the default

He's not the same person

This may sound harsh to some but I run a business and we make a profit and we trade in various markets and my choice is not to enter into contracts on credit terms unless they suit me and only after I have credit checked (and regularly recheck) the company. If a company imposes terms on you that you do not like/agree with etc... then walk away. I fully understand that companies good and bad can and do make deductions and retentions, If you agree those contracts on those terms then you do so with your eyes wide open. If new terms are imposed afterwards you have a contractual right to either walk away or renegotiate and submit a new offer. We are all grown up and need to take responsibility, life is full of choices I know this will not sit well with some people but in all honestly Carillion changed to 120 day payment last May its not like its just happened. Like so much nowadays everything is driven down on price so there is no room to manoeuvre and their are too many layers in the chain all taking a bit which come a rainy (on in this case Monsoon) day leaves everyone drowning with not enough lifejackets to go round. Its wrong that people have lost money and its wrong that the top bosses seem to be getting away with it but lets be honest in 6 months everybody will have moved on, but things do need to change because I, seeing a lot of mini and midi Carillion's out their and added together they become a much bigger issue than this

I fully agree and certainly in my experience in general (outside railways) in the business world there is a new order of people coming into top jobs and few have the ability let alone the experience. Sadly what I am seeing and hearing increasingly is companies planning on today and tomorrow and not worrying about next week because they either wont be around or the world will have moved on and left them behind and they wont be around anyway.

There is also a legal position where it is illegal for Directors & Officers of the company to trade insolvently, often a difficult position to prove. As in this case there could be a clear argument that since the directors met last week (and the penny only dropped then) that they believed that a solution could be found. It also has to be remembered that they issued a statement before Christmas advising that they were about to breech their banking covenants.

There is always an "expert" in "I told you so" after the event and the bigger the event the more "experts" there are.........

Without knowing the SLA's (service level agreements) and the scope of contract you cannot put it at any one door (Carillion or otherwise) as I have said these contracts are a often a subcontract or a sub contract of a sub contract and if for example you take the MOD work there will also be a budget from the source company/organisation (MOD in this case) and that budget holder may not be authorising the work! I have no actual knowledge of this contract but I can tell you that several companies we deal with both directly and via contractors frequently have these hurdles to overcome. its what we sometimes call famine and feast one week nothing then all hell breaks loose which can be the result of a site inspection, an SLA audit a new boss arriving, an incident occurring (like last year when the BBC found some undesirable human waste in the Ice at Kentucky Fried Chicken) or simply there is money in the budget

This will develop over a while many of the companies are part owned, consortiums, partnerships or a subsidiary and in some cases a subsidiary of a subsidiary. It is hugely complicated in some cases and there is also an element of denial/hope sometimes where people/companies think they can carry on.

Andy Good news, take it from me (I had a full blown cardiac 15 months ago and the paramedics got me back whilst as work and now I am as normal as I'm ever going to be!!) leading an absolutely normal life with no side effects or long term issues, BUT do exactly as they say rest plenty without doubt they know best Get your feet up and take care

Many people quote margin figures all of which should be taken with a pinch os salt, especially in the type of contracts companies like Carillion have. There is a massive difference between gross margin and net margin for starters, and when your bidding for contracts several years before you might actually win them the variables are huge, wages, pensions, energy costs, material costs are normally based on the best educated history and what you can see of into the future! And dare I also add exchange rates into the mix. Most contacts have some wriggling room clauses but of late businesses in general are suffering from a perfect storm.

Whilst I do not disagree with anything you say I would add that firstly the work continues so although people may lose their job at Carillion or elsewhere ultimately they will either transfer to another company or start another business. It’s also worth adding that as a business whatever the size you should trade within your means. As I said in an earlier post we trade with Carillion and many others (on the FM side) and it was been on a payment before supply now for a couple of years due to their credit rating . Again it makes no matter what size business you are no work is worth doing unless it’s profitable and if the company your trading with pays late or has a bad credit rating why would you deal with them? Ultimately if you do and they crash it’s not just on them you have to take responsibility.

As a business owner who deals with Carillion and many others of the same ilk there Are many issues which include poor/lack of management, poor staff and a demand to win contracts at unsustainable margins and look to put some margin back in later on via extras and cuts. There seems a constant rational nowadays for all sectors of life to drive the price to the bottom just to say you won the contract! The old business saying is turnover is vanity and profit is sanity! Sadly this coupled with rising wage costs, rising pension costs, rising H & S costs and not forgetting management with a lack of knowledge and fingers on the pulse results in “trading problems”

Who’s to say other retailers are not going to announce limited edition Class 31’s which makes it a longer more viable production run? Or maybe Hornby have already recouped their tolling costs and that makes production runs of 350 viable

Somebody living near Bow Locks!

Lets hope they pass on TSS for toilets being flushed on coaches without CET's

I can tell you as someone who operates 3 ecommerce websites and have done so for over 12 years now with many “tweaks” upgrades, new modules, complete rebuilds and much more in between I have every sympathy with them at this time, there are so many variables and despite the “wise words and promises” of the “experts” (web designers) they will be pulling their hair out. You can set up a shadow site and test it all you want but nothing is proven until it’s actually live and even simple tasks like pointing the Site DNS to the correct IP address can take 24 hours. Like Andy says have patience and there are plenty of other places to obtain the information we are looking for, after all it’s not like Bachmann deliberately want a limited function website

My Dad was on LT for over 37 years and was in the NUR and as soon as he was promoted to a monthly paid position he moved to the TSSA and paid less subs and never had to strike another day as the TSSA never called strikes themselves and when the NUR/ASLEF went on strike he just had to call in from the nearest underground station to say he was available (which was handy as actually lived over the station)