Merger

[RedEarth]

Indeed, but if you have multiple offices it in theory becomes possible to avoid the provision of accommodation because almost every site will be near one of the offices, most probably conveniently the office that your contract says is your place of work. In fact, is this what partially drives the desire for expansion one might ask. So if Cotsex (a bit wrong that one) or Weswold (perhaps it could be converted to Westworld or Westwood, archaeology with The Big Dog!) have even more and more offices even less need to provide accommodation. Good news for anyone who lives near to those offices, bad news for those forced to move for work, particularly if it is only a month long contract. Removing such short contracts would solve the problem to some degree.

[Oxbeast]

I don't think relocation is particularly unethical madweasels. It happens all the time in the public and private sectors. Half the staff from these companies live in Southampton and Bristol anyway, thay can't afford to live in cutesy little market towns. Cotswolds has had tons of work in Bristol over the last few years. I think you'd be doing the staff a favour if you move somewhere they might be able to afford a place, their partners have a wider choice of work and more of the companies jobs are based.

But it'll never happen because all the senior people who make the decisions have got on the housing ladder in the cutesy towns and villages decades ago.:face-stir:

[Dinosaur]

....Ok, not every employee can move around the country, but in my experience that is the least of the units's worries. There will always be someone who can move, and tough for the person who can't....

...steady, that almost sounded like realism! :face-stir:

[Madweasels]

LoL. Yes, I know. Sorry, i won't do it again.

Big hug...

[beamo]

This potential merger is just another in an increasingly long list of events that show how the contract archaeological world is responding to the loss of work resulting from the credit crunch recession and the subsequent gradual upturn in workload.

Contractors have been forced to rethink their business model and clearly expansion (or die?) has been seen by several independent organisations as the way forward. In the last couple of years Oxford have added the former Cambridge County Unit to their empire and also opened a Mediterranean office. Wessex have opened an office in Maidstone, taken a considerable chunk of ARCUS to create an office in Sheffield and also opened a marine archaeology office in Edinburgh (as well as closing their London office). Headland have taken over Archaeological Investigations Ltd. to create a Hereford office, CFA have opened an office in West Yorkshire and YAT have taken the rest of ARCUS to create their own Sheffield office.

Clearly Cotswold and Wessex are looking to develop the relationship formed following their JV collaboration on the A46 at Newark. Wessex and Oxford have also got the Oxford-Wessex Archaeology JV (OWA) that is currently working on the East Kent Access road in Thanet and has previously worked on other major road schemes including the M6 Toll Road. There is also the Framework Archaeology JV between the same companies - this is a single client JV and only carries out work for BAA, so with the ConDem cancellation of the potential new runways at Stansted and Heathrow it may be that Framework is now regarded as 'on hold'. The HAPCA JV that Headland and PCA established for the M74 completion has been seen by the two organisations as successful and is now being rolled out as a bid vehicle for other large projects. Perhaps the formation and use of JVs is a consequence of working with the construction industry, where such alliances are common for major schemes?

If big is better who will be the losers in all of this. Clearly contractors linked to the public sector will come under increasing pressure to demonstrate value for money (not purely in terms of profit or loss). Recently two university-based contractors have gone (Sheffield and Manchester) and others are under scrutiny (Glasgow?). Similar pressures may start to bear down on local authority-based contractors.

The publication of PPG16 and the recession of the early 1990s saw the emergence of independent companies engaged in the market - some remained quite small but others (PCA, Network?) have grown to be considerable larger than most the organisations that predate them.

I see two key issues that are limked to the consolidation in the market, and they are ones that we have discussed many times on this forum:

1. Pay and conditions - this must not be allowed to slip back to what is was before. The gains in pay and conditions that were made during the 1990s and the early part of the 21st century have already begun to be eroded - accommodation, short-term contracts etc.

2. Standards - possibly even more crucial now that public sector cuts are starting to be clarified. How many planning authorities are going to be able to provide a top-class archaeology development control service two years from now. In the event of a recruitment freeeze, what happens when the senior people leave?

I'm not suggesting that a merger of two of the larger contractors will lead to a reduction in standards or in pay and conditions - rather that this merger is a response to market conditions and it is when such conditions start to require contractors to make big decisions then we should all look closely at what other effects the market will or could have.


Beamo

[Unitof1]

I don?t think that it is clear what is going on. Why merge when you can joint. It does make sense to joint venture for large projects because you can control the pay and conditions of your work force particularly project officers and supervisors. A lot of this merger action is about units that work on large infrastructure projects in which the authorising control is mainly outside local authorities and curators. Are they expecting lots of these projects and maybe they are beefing themselves up to be able to respond to the first job that comes along but it all seems a bit dodgy. I also imagine that these companies have quite a few liabilities and what great advantage is there in merging unless it is to cull a least half the management and put a cost saving pay parity through the new group hence what are wessex going to do about the Cotswold 25.

It seem to me that there are lots of gaps at the local authority level. These large groups wont be able to maintain a local face. The last few years has seen a lot of small start ups as well as a lot of one man bands. I don?t see why there wont be more-could be a lot of curators around soon with local knowledge. That will be the standards out of the window.

[beamo]

Uo1

I agree with you that there may well be more small start-ups and one man bands - but this will not affect how the medium and large contractors react to the market in general as they will not be particularly concerned about what happens with regard to 'small' projects where they are unlikely to be competitive anyway. Nor do I think that it has anything to do with projects that are outside local authority control.

The issue of merger vs JV is interesting but I think that you have got it wrong here. With a JV the bid is a combined one but the pay and conditions for employees of each organisation remain as per the contract of employment. In the past this has led to situations where two diggers working on the same site (or even the same feature) have different take-home pay, accommodation and subsistence allowances depending on which of the JV partners they are contracted to. With a merger this would not be the case - all employees would have to sign a new contract with the merged organisation (and in this way the pension situation would be resolved, as the merged organisation would have a new pension scheme and employees would have to decide if they want to opt out completely, join the new scheme, freeze their previous scheme, take the money out of the previous scheme, or any combination of these options).

Beamo

[GnomeKing]

what about competition vs monopoly ?

[Unitof1]

Competition wins eventually but monopoly makes more money in the short term.

beamo-can you get good money out of a local government scheme? I would have thought that it was best to hang on in there.

I presumed that to do joint ventures with wildly different pay scales would be somewhat stupid but it does support the fact that joint ventures were about controlling pay scales as well as not losing your staff to a higher bidder. As I understand it Wessex closed its London office which suggests that expansion is not always easy, it appears that it now thinks that there are useful resources in Gloucestershire/Bristol. Normally in a merger would you not expect that there was a weak partner with its management putting the company forward to have its throat cut but where the directors come away with a nice little sweetener. The thing is that Wessex/oxford-Cambridge Cotswold are the products of Opus Dei and what we are watching is Opus Dei trying to stay alive based on its incestuous relationship with central government. Surprised no one has approached molas or what ever they are called now for a bit of class two exempt action

[Dinosaur]

Uo1

I agree with you that there may well be more small start-ups and one man bands - but this will not affect how the medium and large contractors react to the market in general as they will not be particularly concerned about what happens with regard to 'small' projects where they are unlikely to be competitive anyway....

Actually some medium sized companies (which is what I would consider I work for) regard small jobs as the bread and butter work, it's what keeps all the core project officers etc. busy and employed in between the big motorway schemes and pipelines when you can suddenly take on a hundred diggers - the profit margin's probably better on small jobs than big ones (not a manager so I'm just making a very informed guess on that), it's just that the cash-flow comes in smaller lumps, also means that the recession has had less impact since the small jobs have never really gone away and aren't waiting for the Government spending review....