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Solaya

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To the small number of ABS workers who tried to earn a decent wage and condition by unionising and the subsequent pesecution by this copmpany, I hope you feel vindicated.

 

To Howard and his henchmen who could invent draconoian laws against unions (who in case no one ever bothered to check, are Australian people) but sneered at suggestions to rein in corporate greed, I hope you are satisfied with the mess you have created. Who are you going to blame now? Do you in fact care when the fat piggies walk away with millions after causing all this with your collaboration?

 

To the shareholders of this company, I do feel sorry for you. I truly do. You have done your money cold. In future you may want to consider the ethics of your Board of Directors.

 

 

Regards

 

 

 

Avenger

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In reply to: daggie on Thursday 06/11/08 05:27pm

G'day daggie,

 

QUOTE
no hope to recuperate something, anything for the shareholders???

 

Sadly, I think you are right.

 

You can be absolutely sure that ABC has been looked at very closely by those that might have "rescued" it by a buy-out. The fact that none have proceeded tells the story. Financially, it doesn't work out.

 

All that happens now is that it progresses through to bankruptcy and the lenders will get little or nothing, the shareholders are last in line and you know what that means.

 

Ultimately, somebody, somewhere will pick up the viable parts of the business in the firesale but that still won't flow through to the shareholders.

 

Sorry.

 

 

 

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In reply to: daggie on Thursday 06/11/08 05:27pm

I would say that more than likely shareholders have done their money. Perhaps the any recovery of moneys will be dependant on legal actiosn against the directors personally (Eddie Le Neve etc) for insolvent trading.

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G'day,

 

I just watched an interview with Julia the Red on ABC (TV) re ABC (Learning).

 

She can't be as stupid as she comes across, can she? Surely not.

 

It seems that she just hasn't any idea of what is going on here. She spent the whole interview talking about ChildCare Centres and her aim to reform them (cf the Howard Government). She seems to be trying to con the public into believing that the failure of ABC has something to do with ChildCare Centres. Anybody that has the tiniest bit of understanding of business and a little bit of commonsense knows that this has nothing to do with the ChildCare system. This failure was a business failure. The fact that this business was running ChildCare centers is irrelevant. ABC could have been any sort of business. The failure is a business failure (and can probably be sheeted home to Fast Eddie - but that will be for due process to decide eventually).

 

The truth is that the Childcare centers themselves are probably quite viable. It is the $1bn debt that Eddie racked up that is killing the company. I certainly can't predict the future but I'm sure that everybody knows that, in the end, these Childcare centres will survive. It is just that the business as it exists will not. The shareholders and the banks will take the bath. The $1bn debt will then be gone and the Childcare centers will continue quite happily in some other structure(s).

 

Julia - this failure does not require you to change the Childcare system. If you want or need to change the childcare system then do so. But please justify it genuinely - do not confuse the issue by somehow trying to use this situation to your own ends. If you want to develop something from this mess then look in the areas of Corporate Governance instead - that can be justified by this corporate failure and might actually prove to be of some true value.

 

 

 

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In reply to: forrestgump on Friday 07/11/08 08:13am

The difference here is that ABC is a childcare centre and not just any business which the community can do without thus the government must step in to ensure they keep going.

 

What Julia is thinking is that it is not appropriate for childcare centres to be run as simply profit ventures that risk insolvency and closure taking away a social service that the community needs. It is drowning in debt as any business would be run along the model that Groves used but it is not just any business, it is a childcare provider and thus different.

 

The extreme capitalist system is not working and Julia is right on the money ..

 

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Eddie, Eddie, Eddie you silly boy. You were on a winner and you blew it.

 

Let me explain.

 

It is great to have a business that generates really nice profits and a great return on capital. The problem for so many businesses is - "what to do with those profits?". There are not many businesses that can take the re-investment of the new capital and continue to provide high levels of return on that capital. To do that you need a business that scales well with additional capital.

 

A replication business is perfect. That is, one where you can replicate over and over a single successful business model.

 

Child care centers are exactly that type of business. Once you have one operating profitably you can use the cash flow from that to start the next and the next and so on. It seems that there is an unending demand for child care in Australia.

 

Eddie probably had the perfect business but he blew it.

 

How?

 

Well, I guess due process over the next few years will reveal the details but it is pretty obvious that Eddie just got too greedy. Started to believe his own press. Thought he was above the "madding crowd". Didn't fully understand the risks of over-gearing. Probably all of the above.

 

 

I maintain that there is still a good (probably great) business in here. You can bet that there are plenty sitting on the sidelines now waiting for the banks and shareholders to take the pain, leaving a clean business, ready to go again.

 

There is absolutely no reason in the world for the business to be socialized. Once we start down that road we are doomed. Much better to encourage a capitalism that is better aligned to the morals that we would like our children to see in us. Yes, it is quite possible to have both a thriving capitalist society and an ethical society being one and the same thing.

 

 

 

 

 

 

 

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In reply to: forrestgump on Saturday 08/11/08 06:27am

QUOTE
There is absolutely no reason in the world for the business to be socialized. Once we start down that road we are doomed. Much better to encourage a capitalism that is better aligned to the morals that we would like our children to see in us.

 

3 year old Gordon Gekkos running around, I'd like to see that.

 

One could argue daycare should be socialised as the prime focus should be about the kids, not about shareholder returns. Its not as if it isnt quasi socialised already given its revenue was highly dependant on Govt subsidies.

 

Make no mistake, Fast Eddie was in the business to make money, not to take care of kids.

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QUOTE (sook @ Saturday 08/11/08 08:13am)

G'day sook,

 

QUOTE
One could argue daycare should be socialised as the prime focus should be about the kids, not about shareholder returns.

 

It is actually very easy for those promoting socialist type outcomes to use "Politically Correct" and emotive statements such as these in their arguments.

 

Unfortunately, reality does not support these suggestions. Outcomes from Government run businesses are always less than optimal (and often abysmal).

 

However, even putting that aside and hoping that "this time" the Government could make a good fist of it the question then becomes "where to next?". Do we use the same justification to socialize all Doctors and Dentists? Perhaps we should re-socialize Telecommunications? How about Petrol?

 

Or maybe we should carry that statement to it's extreme and state. "At least one parent should stay home to look after their own kids as the prime focus should be about the kids, not about personal wealth"

 

Yes, I know it all gets a bit silly doesn't it.

 

Anyway, back to something closer to the subject of this thread.

 

There is already a thriving industry of community supported Child Care centers. These child care centers still receive the Government subsidies but choose to operate as non-profit organizations. That is great - it provides for freedom of choice. On the other hand, if a businessperson believes that she can run viable child care centers, satisfying her clients and making a profit then she should be allowed to do so.

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