posted 9 years ago

AA accused of service cuts

AA ‘cutting services’ to boost profits

BRITAIN’S largest motoring organisation, the AA, has been accused of cutting core services to customers so that it can achieve a profit of more than £1 billion for its private equity owners.

Staff and union officials have expressed concerns about the way the AA has been managed since Permira and CVC bought it almost three years ago.

Those concerns include:
• Commercial customers being given priority over ordinary members at busy times • Patrols cut to numbers that can no longer cope with the workload • Broken down cars towed to save patrols time when they could have been fixed.

Paul Maloney, a GMB national officer, said: ‘The service has been run down to boost profits. Patrolmen are working at full stretch and it would take just a few extreme winter days for it all to fall apart.’

The claims are strongly denied by the AA, which says it has increased efficiency and invested in the business to improve customer service.

Permira and CVC financed the purchase of the AA with huge debts, the company now owes £1.75 billion. This will be repaid once the owners can demonstrate they have added value and can sell the business.

This year’s profits at the AA are expected to be £200 million, compared with £94m under previous owner Centrica. If the AA is sold next year, as is widely expected, for up to £3.5bn Permira and CVC could make as much as half in profit. (Sunday Times: June 24).