Read BHI Workwear's piece on the Carillion Liquidation
With the news developing that Carillion going into Liquidation what does this mean for the multiple industries associated with the building giant?
As of the time of writing this piece there is a lot of speculation as to what comes next.
The major projects Carillion had contracted with are left in “no man’s land” at least for the next day or two, projects like the controversial HS2 track construction being one.
This is not the first time a huge private company with very close ties to the executive has collapsed and it will most likely not be the last.
There are some serious questions to be asked relating to due diligence from those parties.
For a brief over view of the current state in relation to the construction industry please read Construction news’ overview as to the state of play.
They have all the sound bites and quotes from the relevant parties and associated companies such as Kier who have reported they have placed contingency plans in place in relation to the HS2 project.
Looking closer to home, how will this liquidation effect the smaller firms and the working man/woman?
Knowing a little about liquidation there will no doubt be many companies large and small that will be left with a sizeable hole in their ledgers.
Supplying a company like Carillon may have been a contract/tender operation and as such there will be little to no chance of the suppliers being made whole after this action.
That could seriously close the doors of the suppliers if things are not taken care of by the controlling parties no in charge of the operation.
Carillion’s liquidation could have serious knock on effects for all associated firms from job losses to company closures – there is no way that a debt of £1.5billion will not have a dramatic and long ranging effect of a huge number of operations.
Workers in the construction field as well as PPE and workwear will be hit hard as companies try to stay afloat in the aftermath.
BHI sincerely hopes all parties affected manage to claw their way through this and become much stronger as a result.
The public sentiment is bound to yield some vociferous reaction to the way Carilion and indeed the executive have allowed this situation to unfold.
David J Wood from Twitter summed up the mood this morning “As a self-employed builder, I would be jailed for fraud for a fraction of the things the chairman & board of Carillion has got away with. But they have the nerve to keep the huge bonuses they gave themselves. Criminal negligence!”
Without making this a political hit piece as we are all wise after the fact, there is a certain number of people and companies that will feel the effects of Carillion closing for years to come.
As a workwear supplier we winced at the possible effect this will have had with one of our competitors.
They will have been supplying Carillion for years in the now false hope that this is a concreate contract and one that makes their business appear premium and successful.
All things being equal if this liquidation had not occurred the workwear supplier could have built a very successful business based upon the continued expansion and supply of a company that has operated for over 200 years.
What Next for the construction and workwear industries
The expression every cloud has a silver lining may be a prudent if not entirely clear adage to operate off here as there will be success stories and potential business opportunities which will result in some very shrewd decisions.
That will be little or no consolation to the people who will be facing a tough 2018 at no fault of their own.
The concept of pre-payment contracts or pro forma accounts are very much part of the debate as although it may not be a welcome principle it will ensure that these types of situations are limited in their chaotic and damaging actions.
BHI Workwear will keep a close eye on this situation as it develops as no doubt it will touch people we work with.
The Best of luck to everyone involved.