The government's plans to sell a stake in the Royal Mail were in disarray last night after it emerged that the company's chief executive, Adam Crozier, is at loggerheads with TNT, the Dutch company that is the front-runner to take a 30% share in the state-owned business.
Crozier accuses TNT's chief executive, Peter Bakker, of trying to poach customers from the Royal Mail's profitable European parcels subsidiary, General Logistics Service (GLS). In an angry email sent to the government last week, Crozier claimed Bakker had told some of GLS's biggest clients that TNT was about to buy GLS, even though the business is not part of the Royal Mail sell-off.
Crozier demanded that the Department for Business, Enterprise and Regulatory Reform (Berr) prevent TNT from further "damaging" its business. His complaints put a question mark over the plan by the business secretary, Peter Mandelson, to sell a 30% stake in Royal Mail to TNT, a move which Lord Mandelson argues is vital to secure the future of the business.
A breakdown of trust between the Royal Mail and TNT would make it more difficult for the government politically, and jeopardise ministers' efforts to find a reliable private sector partner. The prime minister and Mandelson are determined to push ahead with the partial sell-off despite a growing rebellion among backbench Labour MPs. The bill is to have its second reading in the Lords tomorrow.
Crozier emailed the Shareholder Executive - the government body that oversees all state-owned assets - on Friday. "GLS are reporting to me that some of their bigger customers are being approached by TNT and are being told that TNT will secure a full takeover of GLS," he wrote. "Specifically in Poland one of our biggest customers (the Raben Group) was informed of this by Peter Bakker himself ... and TNT are currently in negotiations on this piece of business!"
A Royal Mail spokesman said last night: "The government has reassured us that it is looking for the right partner for Royal Mail Group and it is not looking for a partner for GLS." A government report had looked at selling GLS to solve the pension fund deficit, but concluded "since GLS generates cash, it may also weaken the ability of the company to fund the significant ongoing deficit payments that would still be required".
In his email, Crozier said: "As you know this is a highly competitive market which is in the process of semi-collapse across Europe and there is a real threat that the [part-privatisation] process we are going through is being used by our competitors/bidders to undermine GLS ... clearly not a good outcome for the company or you as a shareholder."
A spokesman for TNT said: "We don't recognise these allegations at all." If any TNT employees had tried to poach key contracts they would probably face disciplinary action, he added.
Crozier called on Stephen Lovegrove, a former banker who was appointed chief executive of the Shareholder Executive last April, to take action to stop TNT. Lovegrove forwarded the email to Robin Budenberg, the UBS banker who is advising the government on the Royal Mail sell-off, and was also drafted in to advise the Treasury on the banking bail-out, asking: "Is it worth telling Bakker to forget it, as I suspect Crozier will want?"
Geraldine Smith, the leading Labour backbench rebel on the Royal Mail, said: "What we need to know now is what assurances have been given privately by ministers to TNT about taking over the European parcels business. The only thing TNT will be interested in when it gets its foot in the door of the Royal Mail is profit for its shareholders. It is clear there is already a complete breakdown of trust between TNT and the Royal Mail, what will it be like once the process goes further? We'll have a foreign-owned company running the British Royal Mail to maximise profit, and I don't think that is on."
She claimed the Liberal Democrats would not now be supporting the government in the Commons over the part-privatisation, making ministers reliant on Tory support to drive the bill through.
Mandelson said on the BBC's Andrew Marr show that if unions did not co-operate , it was likely a Conservative government would take more radical steps. "The situation at Royal Mail is very serious."
A spokeswoman for Berr confirmed that an email had been received from Crozier, but she would not comment, saying its contents were commercially sensitive. She said: "We are focused on securing the future of the Royal Mail."
