British postal services hit by Royal Mail strike (2nd Roundup)

Oct 22, 2009, 17:30 GMT

London - A national strike by postal workers crippled Britain's Royal Mail services Thursday in an escalating dispute over modernization, partial privatization and job losses.

As thousands of postal workers mounted picket lines at the start of a 48-hour walk out - Prime Minister Gordon Brown called on management and unions to resume their negotiations to settle the dispute.

Brown said the strike action would be 'self-defeating' as large-scale customers were choosing to use alternative private delivery services.

'If more and more customers stop using the Royal Mail, then more jobs will be lost, so this is self-defeating,' said Brown.

The Labour government earlier this year abandoned plans to sell a 30-per cent stake in publicly-owned Royal Mail amid a threatened revolt by parliamentary backbenchers.

The simmering dispute at Royal Mail has over the past months prompted big internet retailers - including booksellers Amazon and the Tesco supermarket chain - to switch to private delivery firms.

DLH, the delivery service owned by Germany's Deutsche Post, has been among beneficiaries of the dispute.

Several European postal services have been reported to be interested in buying a share in Royal Mail should part-privatization go ahead.

The CWU union insisted Thursday that the strike had been 'solidly supported,' and accused Business Secretary Peter Mandelson of thwarting a deal in a 'vendetta' against postal workers.

Up to 42,000 mail centre staff and network drivers took part in Thursday's action, while 78,000 delivery and collection workers would walk out Friday, the union said.

Later, the CWU announced a three-day stoppage for next week, starting on October 29. Analysts have predicted that, if the action escalates, Britain could face its biggest strike wave since the 1980s.

A wave of so-called rolling strikes over the past weeks has already led to a backlog of an estimated 5 million undelivered items.

Royal Mail has seen postal volumes decline by between 8 and 10 per cent year-on-year, according to official figures.

The service, which made a group-wide operating profit of 321 million pounds (532 million dollars) in the current financial year, is weighed down by a pension deficit of 3.4 billion pounds.

The CWU, while saying that it is ready to resume negotiations, has accused Royal Mail of not revealing the true scale of job losses as a result of a 2-billion pound modernization programme.

However, Royal Mail uses automated sorting for only 50 per cent of items, compared with 63 per cent in France and 89 per cent in Germany.