Bus Wars -- or the wrong way to privatise an industry

of two buy-out groups for Western Scottish Omnibuses of Kilmarnock that

two MPs who could hardly be farther apart politically are united in

calling for an outbreak of peace.

Mr Allan Stewart, Tory MP for Eastwood, and Mr Brian Wilson, Labour MP

for Cunninghame North, are agreed that the sell-off of Western Scottish

has been badly handled. That might be an understatement. Anyone looking

at the story so far might be tempted to conclude that this is the

classic example of how not to privatise an industry.

Almost a year ago the Government announced that the Scottish bus

companies Clydeside and Western were to be merged and sold off. This

brought together a company whose buses covered an area of Scotland

stretching from the south-west of Glasgow, through Renfrewshire,

Greenock and Port Glasgow, Ayrshire, all the way to Dumfries and

Galloway.

It had 2000 employees and a turnover of about #32m, from which it drew

a modest profit. Most of this profit came from the Western element,

based in Kilmarnock, but the commonly-held view among most of the

workforce was that the Clydeside element, based in Paisley, offered more

lucrative potential.

The Scottish Bus Group's various constituent companies and their

managements and workers began to form themselves into buy-out groups.

The Clydeside-Western management and workers formed themselves, after

much internal bickering, into two rival groups.

The root of their differences is historical, typified by the the very

different style of management and union relationships between the two

previously separate companies, one of which was urban and the other

rural. (I am trying desperately to keep this account factual in the

knowledge that any ''fact'' put forward by one side is automatically

denied by the other amid suspicions of editorial bias.)

On one side there is the Employees's Buy-out (Ebo) whose leaders claim

51% support of employees, as well as backing from one senior management

member, and all middle management. The Ebo group also claims 95% support

from employees in Clydeside.

On the other side there is the Employees' Share Ownership Plan (Esop)

whose spokesmen claim support from 50% of all employees, a majority of

middle management, half of all full-time union officials and support of

the full management of the joint company. Each side denies the other's

claim in this respect, as in most.

The first serious dispute took place in the early spring of this year

when Mr Eddie Craik, company secretary of Clydeside and finance

director-designate of the joint company, defected from the

management-dominated Esop group and joined Ebo. He was soon demoted and

later fired when he was allegedly found in possession of confidential

company records.

Mr Alan Wilson, managing director of Western Scottish, strongly denies

Mr Craik was fired because of his link with Ebo and accuses him of

unprofessional behaviour. Mr Craik's dismissal is now going before an

industrial tribunal. He vehemently insists he behaved with total

propriety.

Ebo supporters claim their Esop rivals have been organising a

systematic campaign of disinformation. Meetings were called with Western

employees but none turned up because someone had written ''cancelled''

on posters, according to bus driver Anne Cowden, who works out of the

Paisley depot.

There were claims by the Esop people that the Ebo group was receiving

backing from a firm which was no more than a front for the Stagecoach

company, which has been acquiring bus firms all over Britain and whose

interest would be unwelcome by either side in the privatisation process.

This claim is denied by Esop.

Esop pounced on Ebo's plan to allow a 15% shareholding to Luton and

District Transport, which is already privatised. Esop claimed less than

half of the Luton's workers had a share and six individuals owned almost

one third of the company.

''Is this what they hope will happen at Western/Clydeside?'' Mr Wilson

asked.

Mr Craik responds that Luton works well and that Mr Wilson's remarks

are unfair and greatly exaggerated.

As the war continued the Scottish Office announced a #60,000 grant

would be payable to Esop, on the advice of the Scottish Bus Group. The

group thus appeared to suggest that Esop had the best chance of forming

a successful bid but the Scottish Office denied it was conferring

''preferred bid status'' on Esop. Requests for similar treatment for Ebo

were rejected.

At that point MPs Wilson and Stewart came to agreement, both making

the point that there should be even-handed treatment for both groups.

But the demand went unheeded.This did not prevent Esop's leadership

allowing posters to be put up throughout the depots saying it had been

given ''preferred bid status''. They were later removed.

Ebo supporters reluctantly agreed to accept Government assurances that

they were not being discriminated against -- they had little choice in

the matter -- and discussions began between the two groups so that some

formula for a joint bid could be found.

Just when it seemed some progress might be made the Esop team suddenly

announced the dismissal last month of 130 conductors, all of them in

depots in the Clydeside area. This was seen by Ebo as a bid to undermine

its support.

The most remarkable aspect of this development was the strange policy

of management, which decreed that, when the 130 were fired, the company

was happily starting a course for eight new conductors.

Then earlier this month Mr Eddie Cassidy, the shop stewards' convener

who is also chairman of Ebo, went on holiday after being asked several

times for his holiday dates. Mr Cassidy is known as a strong negotiator

with a persuasive personality. Immediately he was gone the company's

middle managers were summoned and told their jobs would be merged. Six

were to go, five of them in Clydeside.

This increased Ebo's fears that a deliberate dirty-tricks campaign was

being waged against it. These fears were sharpened again recently when

the company began repainting all of its buses in Western colours,

despite the fact the management-dominated group could yet be defeated in

its bid and be causing unnecessary expenditure.

According to Ebo the total number of jobs lost since it produced its

rival bid for the company is 138 -- and 137 of them have been in

Clydeside. ''There is still no sign of even-handedness or of any

intervention from the Scottish Bus Group or the Government,'' complains

Mr Craik.

To complicate matters there is the odd role of the directors of the

Scottish Bus Group. They include Mr Archie Douglas, director of

personnel; Mr Malcolm Stewart, managing director and chairman of each of

the component companies and Mr John Edmond, director of engineering. It

is they who will make a formal recommendation to Mr Malcolm Rifkind, the

Secretary of State, on which group -- including any possible latecomer

to the scene -- should be offered the company.

The Ebo group suspects the SBG directors will indicate a price for the

company to the management and not to any rival. ''We ask the SBG if the

Ebo team will be given the same information in respect of price as the

management,''says Mr Craik.

When the SBG's component parts are sold off the SBG itself will

disappear and its directors will, therefore, be out of their well-paid

jobs. Ebo supporters claim the SGB directors will, obviously, support

the management-dominated Esop scheme. ''It is a foregone conclusion they

will back their own people,'' says Anne Cowden.

Mr Alan Wilson says this is not true, claiming his group's wish is

only to unite the employees. ''It is not our intention to involve people

from outside...it is not our intention to have directors from the

Scottish Bus Group.''

Mr Wilson thinks some indication of who will win this battle can be

expected in a few months and that the final decision should be taken in

the second half of next year. This could be bad news for the Ebo group

if Mr Craik's industrial tribunal is delayed. Any finding in his favour

would then come too late to help his cause.

The suspected round of closures in Clydeside is not confirmed by Mr

Wilson, despite employee's scepticism about management having ulterior

motives. Mr Wilson says the company is merely looking at areas which

perform well and areas which do not and taking action according to

various options, a policy which would be expected of any responsible

management. ''All of these policies are not directly related to

privatisation,'' he insists.

It strikes me, as it must have struck anyone examining this row, that

there is an obvious compromise. Mr Stewart hits the nail on the head

when he suggests that the Ebo group should be allowed to buy Clydeside

and the management group should be offered Western. The trouble is, Mr

Stewart believes, it might now be too late for such a reorganiation.

Mr Stewart says that both sides should be treated equally. Mr Brian

Wilson agrees.

''Privatising both companies separately would be ideal,'' says Mr

Stewart, raising the possibility that if no agreement can be negotiated

some new force might come on the scene and be given the lot by way of

resolving the impasse.

This suggestion is also made by the Ebo team and Mr Stewart says he is

''extremely sympathetic'' to its position. Mr Alan Wilson says Esop's

intention is to carry out Scottish Office policy and treat the company

as one.

All in all, a fine mess.

The idea of a split purchase seems blindingly obvious but, then we are

dealing with bureaucrats in high places. It would be good if, just for

once, we could expect an exercise in privatisation -- even one which has

been bungled -- to benefit the public and not just a handful of

investors, from whatever quarter.

Keeping the warring factions apart by splitting the prize would keep

most people happy, especially the people who use the buses.

Picture -- JAMES MILLAR