So, the story has broken and a historic day in the history of First Group has come to pass with the news that the Chief Executive Officer Tim O’Toole has decided to leave the Company. In a press release it was announced that following huge losses with a swing of £479 million in just one year from profit into loss the CEO had little choice but to leave. In detail last year they made a profit of £152.6 million and this year they have managed to lose a mouthwatering £327 million. The results once revealed to the City could lead to only one decision, the dismissal of Mr O’Toole with immediate effect.
The Executive Chairman Wolfhart Hauser will take over the role in the meantime while a replacement is found, in addition finance Chief Matthew Gregory has been appointed as the interim Chief Operating Officer, Once the figures were published then O’Toole admitted that the time was right to step aside, so it was a question of does he jump or was he pushed off the plank. The key issue for the financial performance was the dire performance of the USA Greyhound Bus Company. The combination of changing travel patterns due to the rapid expansion of ultra low cost airlines operating to a lot more USA destinations has hit the inter urban coach market very hard, and the ever cheaper cost of running cars has had a double whammy on the iconic Greyhound. Speculation in the trade press is now rife that First might well dispose of Greyhound amongst demands from shareholders to break the business up.
First UK Bus has showed steady progress under the skillfull and highly respected leadership of Giles Fearnley, although it still faces challenges in certain regions. However real success has been achieved certain parts of the UK like Bristol and West Yorkshire where strong partnerships have lead to strong passenger growth. Sadly the fortunes of First PLC were not helped by the onerous contract provision linked to the TransPennine Express rail franchise.
For myself as one of the founder members of First group back in 1987, and as a shareholder, it is a source of sadness to see it hit such times, no doubt Mr O’Toole did his best, but his somewhat abrasive style has upset some people in the past and it was suggested that shareholders had lost confidence in his leadership. I met him once a few years ago when Chris Ruane and myself went to meet him as the CEO of First Group to see if he would support CILT, we enjoyed a quick 5 minute argument where he told me that he did not see the point in people having post nominals like FCILT after their name. He said it was pointless and not fair to those who do not have post nominals. I suggested that was nonsense, as the post nominals represented effort, success in exams, and professional repute. At that he said he was not interested, upped his stumps and exited stage left.
So what happens now, clearly there are choices the first being that they find someone capable who can stable the ship and inject confidence back into the City and Investors, potential candidates might be someone with a good record of turning around failing transport groups (Dean Finch at National Express, Jeroen Weiner at Melbourne Transport? ) although both as former employees are probably unlikely to want the poison chalice. At the other end of the scale suggestions are the whole shooting match should be sold off in bite sized chunks although I do not really think that this is a realistic option, and it would be a real shame to see one of the giants of the transport era slide onto obscurity. As for Mr O’Toole no doubt history will have a view of life at First under his stewardship, but whatever I can only hope that fortunes will change for the better sooner rather than later, and as a key supplier to First group both here in the UK and the USA stability and confidence will return.