Carillion: Demise no great surprise but will be far-reaching, says CFA ceo
CFA ceo, Richard Catt, has issued a statement regarding Carillion’s liquidation, expressing the CFA’s concern for its employees and the wider impact on the supply chain.
Richard Catt’s statement reads:
‘Whilst still shocking, the news of Carillion’s demise will not be a major surprise to many CFA members who work for main contractors. Obviously their growing problems have been widely reported in the construction industry and national press, but as Rudi Klein of the SEC Group has pointed out in recent interviews, their basic business model has for a long time been fundamentally flawed.
‘The significance of their collapse will be far reaching and I am not only conscious of the 43,000 world wide and 20,000 UK based employees, but also the wider impact on their supply chain and the contract flooring industry. The extent of the impact on businesses and financial hardship caused to individuals through job losses will no doubt become apparent as time passes and is difficult to estimate at this stage. Low margins and use of subcontractors’ funds as cash flow and capital (in the form of late payment and withheld retention) will no doubt become publicly recognised as part of the problems that led to Carillion’s down-fall. It is important that even whilst still raw, we ensure that this element of this disastrous event is not lost on government as they complete their current consultation on retention.
‘The CFA would like to hear from any members prepared to share (in confidence) the financial impact on their businesses so that we can feedback to government a picture of the effect on the flooring sector.
‘In addition, we would like to offer our help, support and guidance, both directly, but also via our range of benefit providers in dealing with any issues that arise: this includes legal, contractual and business advice, where possible focussed in respect of Carillion projects and, for example, dealing with the liquidators. Some advice is already being published by the liquidators PwC through PwC’s dedicated website https://www.pwc.co.uk/carillion
‘The CFA will also be continuing its lobbying efforts to ensure that government recognise this as the very tip of a much larger iceberg and, that this must be addressed by legislation to deal with late payment and unfairly held retention, as soon as possible, to avoid a much greater collapse of this potential main contractor house of cards.’