Eircom in examinership

ART6

It has just been announced (as expected) that the Court has approved examiners for the Eircom group, which is insolvent. That, for me, poses an interesting question: Eircom is responsible for the maintenance of the telecoms network. If they go to the wall, who will then take the network over?

I wonder if we are facing another M50 toll bridge debacle, where the taxpayer has to buy the whole caboodle back for ten times what it cost in the first place, while the money men who destroyed Eircom walk away with the profits?

Roll on a federal Europe wherein Irish politicians no longer have any role to play. This country is not capable of running itself:mad:

ardmacha

In Capitalism, someone takes over the network and makes money from it, since they didn't have all of the debt. Only Irish banks operate in different way,

KyussBishop

Eircom still have kind of a monopoly over the infrastructure, and it's my impression that ComReg are neutered in Eircom's favour, because Eircom have been free to screw over other ISP's (and their customers) on line reselling for years (or so is my impression).

Basic anti-competitive tactic of hooking anyone needing their line enabled, into a year-long contract with Eircom (so they can't go with other ISP's), and if you renége you get charged a years fees; ComReg do fúck all about it.

So I won't miss Eircom at all if they get broken up and state-ties permanently severed, but what to do with the infrastructure is a problem.

I don't know what the best thing to do with the infrastructure would be really; they have done an enormously crap job modernizing it, so it's far and away not worth the burden of nationalizing (maintenance would be expensive too), but it's essential infrastructure all the same so spinning it off to another private entity could be risky.

Really need other ISP's to invest more in modernized infrastructure.

GSF

Some one would buy the [creaking] network without having to buy the unioned labour force that goes with it. Run properly the network could be quite profitable and would support investment to deliver new services in most reasonably populated areas.

This could be the day that eircom is set free from its twin nemises - its legacy management and its unionised workforce. Both have been leaching the company dry for years.

ART6

ardmacha wrote: »

In Capitalism, someone takes over the network and makes money from it, since they didn't have all of the debt. Only Irish banks operate in different way,

Or would they? I suspect that we have already seen an example of government thinking in the establishment of Bord Gais as the supply body for the new water undertaking. They have said that if Bord Gais is privatised then the water network will remain in public hands. That suggests a recognition that some services are essential to a modern society and cannot be fragmented and run by the private sector. As well as water, I would argue that telecommunications are equally essential and that no private company could be allowed to control the whole network, since, if it did, there would be no possibility of competition, and that would be against the EU ethos.

In any case, we are already facing the consequences of such a private company having that control. Ireland has, in (what?) twenty years, gone from a modern telecoms system to one of the most primitive. Broadband speeds that make us the laughing stock of the developed world?

So, if Eircom fails, then I would bet that the government would nationalise the telecoms network, paying several times over the odds for it in order to ensure that the current shareholders don't lose out. I would further expect that we will then be told that our telephone line rentals will increase by 50% to pay back the money borrowed from the National Pension Reserve Fund that was used to buy it.

Alternatively perhaps, someone like Vodafone could be permitted to buy it, and the Regulator would then rule on what they could charge other telecoms companies for access. As a stand-alone service without Eircom's telephone services, the Regulator would have to permit access charges high enough for Vodafone to make a profit. How they would get that past the EC is another matter!

In either case, line rentals will rise. I would bet my pension on that because that is how it works with this government.

Sleepy

Is there any way we could take the infrastructure into public ownership and contract out it's management, maintenance and upgrading to the private sector?

juan.kerr

ART6 wrote: »

I wonder if we are facing another M50 toll bridge debacle, where the taxpayer has to buy the whole caboodle back for ten times what it cost in the first place, while the money men who destroyed Eircom walk away with the profits?

And don't forget the ESOT and its members that backed each one of those takeovers.

Have the unions made any statements on the examinership and the involvement of their members in the aforementioned takeovers?

KyussBishop

Re-nationalizing the infrastructure would be a disaster really, because not only would it cost more than the country can afford, but there wouldn't be the money to maintain it; doesn't seem an option to me.

Maybe the rest of the ISP's in the country could collectively take a stake in the infrastructure, and could then invest on modernizing it and could do away with the monopolistic crap we have going on right now?

Seems it would be in all their interests to do that, and they could collectively be the shareholders of a new company responsible for giving equal access and maintenance.

No idea how practical that would be, both politically (for the companies) and financially (with regards to investing), but it would provide some balanced future for the network.


How do other countries manage their infrastructure? (where they don't keep it outright nationalized)

GSF

Sleepy wrote: »

Is there any way we could take the infrastructure into public ownership and contract out it's management, maintenance and upgrading to the private sector?

Irish solution. Try to own the capital asset while getting someone else to pay for building, maintaining and improving it. Maybe we can ask the troika?

Robbo

Sleepy wrote: »

Is there any way we could take the infrastructure into public ownership and contract out it's management, maintenance and upgrading to the private sector?

Am I thinking of a Network Rail style operation?

ongarite

The current infrastructure is virtually worthless.
The vast majority of it is running on old ASDL1 tech with a few exchanges running ADSL2.

Its going to cost billions to upgrade to fibre cable & I can't see anyone willing to do this as the ROI is very low in this country.

Physical landlines into homes are on a big downward slide with UPC cable taking over the high end market & mobile broadband taking the low end, "just good enough" market.

Sleepy

More a "avoid another Eircom-style union at all costs" thinking.

Probably doesn't make financial sense to hang onto it at all given the inroads NTL have made on their customer base, however.

[Jackass]

ART6 wrote: »

Roll on a federal Europe wherein Irish politicians no longer have any role to play. This country is not capable of running itself:mad:

As a proud Irish man, it is amazing to say it, but just about the worst moment in our history was winning independence from the British.

Roll on a federal Europe ASAP.

GSF

[Jackass] wrote: »

As a proud Irish man, it is amazing to say it, but just about the worst moment in our history was winning independence from the British.

Roll on a federal Europe ASAP.

There are plenty of idiots in European governance too. You just have to look at the euro project to see that. As for wastage, how about having a rotating parliament that sits in different locations at a huge cost.

Farmer Pudsey

We are now seeing the cost of a one policy fit all size's of countries in europe. It has nothing to do with unionised labour or old technology.
Ireland had the finest telecommunication's systen in europe in 1990 and the cheapes electricity, what happened.
The EU decided that we needed competition, deregulation and privitation. We are a country of 4 million people give or take in a country 1/3 the size of GB. London has twice the population of us and Manchester and Birningham are around our population size. When it was decided to float Telecom Eireann/eircom for 10 years before spending was reduced as far as possible then it was floated without insisting on continous investment in the network.
I do not think that UPC will invest in towns like Killarney or Castlebar and no telecoms company will invest in small villages and rural houses. The same will happen with the post office and the price of electricity will continue to rise so that competition can come in.
We are now after 10-15 years of deregulation yet only in the major cities have we any sort of competition look at the Terrestial digital television nobody wanted it we have not got the population base for competition in utilities in GB they have about 4-5 major mobile players we have effectively about 3.
In electricity we have 3 two statebodies and a heavy subsised wind energy sector there are major grants for wind turbines and a renewable leavy on electricity generated by non renewable's which have to be usede all the time as the wind energy is not dependable
So how do we think that we can have competition in Telecoms the only area we could have very effective competition is on bus transport and that is not allowed by government policy

PS If I could buy it at the moment I would sell meteor and any other parts such as phonewatch and lancom I would load all the copper cables on a ship and sell them ( try to get it done before the lad's rob it) and sell all the property sell there fleet. In theory I would make a profit.

Delancey

The examinership was well-flagged for some time and it's no surprise , what has surprised me is the lack of comment/coverage/debate surrounding it - here we have the principle fixed telecomms provider with a large workforce seeking court protection and it has all been met with a deafening silence.

Hardly likely to enhance confidence in our much-touted ' smart economy '.

jimmycrackcorm

Farmer Pudsey wrote: »

We are now seeing the cost of a one policy fit all size's of countries in europe. It has nothing to do with unionised labour or old technology.
Ireland had the finest telecommunication's systen in europe in 1990 and the cheapes electricity, what happened.
The EU decided that we needed competition, deregulation and privitation. We are a country of 4 million people give or take in a country 1/3 the size of GB. London has twice the population of us and Manchester and Birningham are around our population size. When it was decided to float Telecom Eireann/eircom for 10 years before spending was reduced as far as possible then it was floated without insisting on continous investment in the network.
I do not think that UPC will invest in towns like Killarney or Castlebar and no telecoms company will invest in small villages and rural houses. The same will happen with the post office and the price of electricity will continue to rise so that competition can come in.
We are now after 10-15 years of deregulation yet only in the major cities have we any sort of competition look at the Terrestial digital television nobody wanted it we have not got the population base for competition in utilities in GB they have about 4-5 major mobile players we have effectively about 3.
In electricity we have 3 two statebodies and a heavy subsised wind energy sector there are major grants for wind turbines and a renewable leavy on electricity generated by non renewable's which have to be usede all the time as the wind energy is not dependable
So how do we think that we can have competition in Telecoms the only area we could have very effective competition is on bus transport and that is not allowed by government policy

Funny how it is UPC that has been leading the way in speed / cost. You might criticize UPC for not investing in towns but Eircom has been always slow to adopt even before privatisation and are in no hurry to improve anything where there is unlikely to be any competition.

drunkmonkey

So what happens over the next 100 days?

Delancey

drunkmonkey wrote: »

So what happens over the next 100 days?

The Examiner will hold talk with the various creditors , given the huge level of debt there will probably be some sort of write-off of a portion of the debt , rest of the debt will probably require a re-structuring of some sort to allow a longer re-payment term.
Virtually all Examiner recovery plans require fresh investment though where this will come from is anyone's guess.
Difficult to see there not being resructuring of operations with consequent job losses.

The above is the way Examinerships usually go but given the size of Eircom (and its debts) this one may pan out differently.

In the meantime Eircom is under the protection of the court and nobody may bring a petition to order its winding up , at the end of 100 days the examiner should have a scheme set up and will present this to the court for approval.

thethingis

Remember the asset stripping consultant robbers that went in years ago and sold off Eircell and Cable link. Who were they? How much did they extract in fees for their theft?

Delancey

thethingis wrote: »

Remember the asset stripping consultant robbers that went in years ago and sold off Eircell and Cable link. Who were they? How much did they extract in fees for their theft?

Consultants ? Meh ! What about the CEO who sold Eircell to Vodafone for a song and then after leaving Eircom became a Vodafone director ?

vetinari

Eircom was ruined by going private. Farmer Pudsey is right, their technology was state of the art at the start of the nineties. As a semi state company, they were debt free and turned a profit. Since privatization, they've been leveraged with debt and bled dry. It's got f**k all to do with the unions. Selling Eircell is just one example of a colossal mistakes by their management.

femur61

Apologies for being inane but why do people say since privatisation eircom became saddled with debt? Surely when the government was pumping money into eircom unconditionally it will always balance the books.

ART6

Delancey wrote: »

The Examiner will hold talk with the various creditors , given the huge level of debt there will probably be some sort of write-off of a portion of the debt , rest of the debt will probably require a re-structuring of some sort to allow a longer re-payment term.
Virtually all Examiner recovery plans require fresh investment though where this will come from is anyone's guess.
Difficult to see there not being resructuring of operations with consequent job losses.

The above is the way Examinerships usually go but given the size of Eircom (and its debts) this one may pan out differently.

In the meantime Eircom is under the protection of the court and nobody may bring a petition to order its winding up , at the end of 100 days the examiner should have a scheme set up and will present this to the court for approval.

Given that Anglo Irish, AIB, etc. were "too big to fail" and under EU orders had to be bailed out by the taxpayer so that the bond holders could not lose, will it be decided that Eircom is also "too big to fail"? After all, if it does and no-one else has any interest in buying the network, then Ireland would be left without any national telecoms network at all. Goodbye high-tech society, hello stone age!

I wait with interest to see when the EU announce that the taxpayer must clear Eircom's debts in order that its creditors don't lose their money. After all, the sum involved is about the same as that to be cut from the budget this year, so another doubling of the carbon tax, household charge, etc. etc. would about cover it:rolleyes:

GSF

vetinari wrote: »

It's got f**k all to do with the unions.

So whats the ESOT then if its not a partner in the bleeding dry of eircom's cash reserves?

Farmer Pudsey

femur61 wrote: »

Apologies for being inane but why do people say since privatisation eircom became saddled with debt? Surely when the government was pumping money into eircom unconditionally it will always balance the books.

I like a lot of other people was uneducated about Telecom Eireann/Eircom until a niece of mine did a thesis on it about 7 years ago it was made a semi state in the mid 80's along with An Post it seems that it was overloaded with staff as all the staff in the P&T had to be accomodated and An Post could only take a limited amount.

It was laso loaded with debt around 1 billion (I think)in in ten years we had a state of the art telecommunication company paying a dividend to the Exchequer. In that time it recieved no state aid. The call came to privitise it and we know what happened.

I see the same clamour to privitise Coillte, The ESB and An bord Gais yet private enterprise only want An Post deregulated and the same for the buses.
I believe that the public transport should be deregulated, an Post should be left alone otherwise we will have no postal system within 10 years, Coillte I am not sure about as it seem it might be a golden goose with the price of fuel. The ESB and Bord Gais shoulld be reformed and forced to pay a divident to the government not massive wages to their employees

creedp

Farmer Pudsey wrote: »

The ESB and Bord Gais shoulld be reformed and forced to pay a divident to the government not massive wages to their employees

ESB does pay a dividend to its shareholder the Government at present but as it is such a profitable company its shareholder should either demand it pay a higher dividend, invest more of the profits in the business or reduce its price to the customer (its ultimate shareholder). The current position seems to be (and must be supported by its shareholder) to give out a significant proportion of its profits to its employees in the form of pretty good terms and conditions. Its great though when deregularisation and competition mean that the price of electricity is artifically raised in order to make is attractive for the private sector to enter the market and the outcome of this is that a small number of public sector workers get enhanced pay and conditions because of the increased profitability associated with this competition .. the irony of it!

GSF

Ah the nostalgia for waiting half a year for a landline or paying Eircell £1 a minute to call another mobile. Happy days when eircom could make a profit without having to break a sweat.

Farmer Pudsey

GSF wrote: »

Ah the nostalgia for waiting half a year for a landline or paying Eircell £1 a minute to call another mobile. Happy days when eircom could make a profit without having to break a sweat.

Another misconception nearly all new lines by the 90's were installed within one month 20 working days. Also Eircell 1£ a minuite maybe at the very start but by the mid 90's call costs were comining down fast all new technology's are expensive at the start especially when you are are a sparsely populated country. Look at computers 10 years ago you would spend 1500 euro on a desktop today 350 on a laptop, Flatscreen TV 12 years ago 24" over 1000 today 40" 4000euro

Delancey

Selling Eircell ruined Eircom - they were left with a declining revenue and customer base in fixed line and locked out of the ' mobile revolution '.

kippy

Where now for Eircom?
Is there any chance the company will be split, the network sold to the state (I know, in this era of privitisation it is unlikely) however I do believe the network is a key asset (probably a key cash drain as well).

creedp

GSF wrote: »

Ah the nostalgia for waiting half a year for a landline or paying Eircell £1 a minute to call another mobile. Happy days when eircom could make a profit without having to break a sweat.

I recently tried to get a eircom line for a house only to be told that Eircom couldn't provide such a line as the nearest poll was too far away. Too far away in private Eircom land is less than a half mile (almost 1km in new money). I believe they have an public service obligation to pay for cost of the 1st 5 poles associated with any new installation so I presume they have decided to refuse to install lines so they won't have to cover such costs. In any case I'm not sure if the nostalgia for the previous public entity is much different to what is practiced by the now vibrant private entity.

The Corinthian

Eircom never could get out of the mindset of being a state monopoly. When Telecom Eireann was privatized the government made a bit of a hash of it in leaving the infrastructure in the hands of the newly re-branded Eircom, in that it was able to retain it's de facto monopoly for a number of years while the government no longer had any influence over its actions for the public good.

Subsequently Etain Doyle was appointed to head up ComReg and she actually did her best under these circumstances, learning from the Danish experience (that was very similar) and liberalizing the laws that allowed competitors set up alternative infrastructures (in particular wireless).

What followed was predictable; for a number of years Eircom continued to milk it's monopoly and dragged it's feet on internal reform of the civil service culture it had inherited, but eventually other telcos got up to speed and were able to out compete Eircom.

Having missed its opportunity to reform, an uncompetitive Eircom began to lose money everywhere and belatedly chose to reform, which cost it huge amounts in the form of early retirement packages and the like, which further throttled it's ability to keep up on its services and infrastructure.

Today it has an outdated infrastructure and dwindling customer base; not enough to justify investment to keep the organization afloat. Cheaper to let it collapse and get a few bargains when its liquidated.

What this means for the consumer depends upon who buys those bargains. A new player may choose to enter the market on the back of those, in which case after two or three years we may see improved competition. On the other hand and existing player may hoover them up leaving the market simply with one less provider and thus less competition.

To me Eircom is Mary O'Rourke's political legacy as it was her department that ultimately sowed the seeds that are about to be reaped. I always felt she was a good minister of education, but in Enterprise and Employment the Peter Principle really did kick in.

Farmer Pudsey

Another couple hoary chestnut's selling Eircell did not break eircom it was the Delisting by Valentia the relisting on to the Stock exchange the next delisting by that NZ company I cannot remember it's name and the loading it with debt that [EMAIL="F@@ked"]F@@ked[/EMAIL] it. Where for eircom now it will doddle along for another 2-3 years uintil the banks undestand that there is no pot of gold at the end of the rainbow.
CreepD I understand where you are coming from but no private company will provide a service that will loose them money it will take more tha 5 poles for 1/2 mile for me to put up electrical fence for cattle costs 1.5 euro/metre. 1/2 mile=800m, barb wire fencing isover 5 euro/metre I do not know what it would cost to put up 1/2 mile of cable b ut 5000 euro would not seem unreasonable for a phone that at best senario will generate 70-80 euro a month inc vat.
The Corinthian all deregulation in Ireland has been a disaster wheather it is eircom, An Post, ESB and Boad Gais in all the reform of eircom I cannot remember any hugh threats of industrial action in the same time we have had 2 ESB strikes, 1 RTE strike, 2 rail strike , 1-3 dublin Bus strikes, 1 bus eireann strike 2 teacher strike 2 nurses strikes and I will not even mention how many Aer Lingus strike not to mind threaths by Aer Lingus Staff.

Yes New entrants will cherry pick the places where it makes money the job of a regulator is to reduce any monolopy to below 50% to do this leaves the incumbant starved of investment as it cannot attemp to create new customer bases, It allows other players to cherry pick sections like IFA telecom, Gaelic Telecom. Tesco mobile Aergrid etc with out haveing to invest in infrastructure while the incumbant will not invest as it will not get a return on it money and it owner will if a private company strip the company down to release equity for other projects.
WE are lucky that the ESB is not a private company as this is what would happen as well
At present we see the situtation that the mobile companies are all coming togeather to build the next generation mobile network who will build the next generation telecom's infrastructure

The Corinthian

Farmer Pudsey wrote: »

The Corinthian all deregulation in Ireland has been a disaster wheather it is eircom, An Post, ESB and Boad Gais in all the reform of eircom I cannot remember any hugh threats of industrial action in the same time we have had 2 ESB strikes, 1 RTE strike, 2 rail strike , 1-3 dublin Bus strikes, 1 bus eireann strike 2 teacher strike 2 nurses strikes and I will not even mention how many Aer Lingus strike not to mind threaths by Aer Lingus Staff.

As I said, there was very little effort to reform the culture in Eircom and when it did take place it took the form of generous employee cash outs. As a result, there would have been little opposition from the unions and thus little impetus for a strike.

Duiske

The Corinthian wrote: »

Today it has an outdated infrastructure and dwindling customer base; not enough to justify investment to keep the organization afloat. Cheaper to let it collapse and get a few bargains when its liquidated.

The infrastructure side would have to be virtually given away before anyone would take it on with a view to investment. On the face of it, it looks like a cash cow but it's the dwindling customer base you mention that would be the worry. €25+ line rental is not sustainable when mobile packages with unlimited calls to landlines are available for as little as €15pm. At a time when household budgets are coming under closer scrutiny, that €25pm expense may as well have red flashing lights around it.

The Corinthian

Duiske wrote: »

The infrastructure side would have to be virtually given away before anyone would take it on with a view to investment.

I suspect it will be.

antoobrien

KyussBishop wrote: »

Eircom still have kind of a monopoly over the infrastructure, and it's my impression that ComReg are neutered in Eircom's favour, because Eircom have been free to screw over other ISP's (and their customers) on line reselling for years (or so is my impression).

Your impression is wrong. The opposite is true.

Eircom have to give up the local loop when demanded by competitors. This is the reason that the infrastructure has become so crap - it's not worth them investing in something that they won't benefit from.

Also Eircom aren't allowed set prices to ISPs & telephone providers they're set by ComReg. There were plenty of cases where Eircom were refused permission to set retail prices that competed with the other providers because of their market position. The same thing happend to the ESB when Bord Gais were allowed sell electricity. The esb were forced to wait for Bord Gais to win 40% of the market before they could start offering competing discounts.

Personally I think the telecoms infrastructure should be remodeled along the lines of the ESB split up - separate generation from transmission from supply. Sperate the lines from the telephone service. Then start setting wholesale prices (which will still be controlled by ComReg).

femur61

Farmer Pudsey wrote: »

Another misconception nearly all new lines by the 90's were installed within one month 20 working days.

Not in Kilkenny

antoobrien

femur61 wrote: »

Not in Kilkenny

Nationwide

If it wasn't done within the ordering time frame there was some compensation (reduced fee I think) - which kinda killed them in Dublin because it took 6 weeks to get a lot of orders out.

ART6

Given the comments in posts here, another thought: If Eircom is eventually deemed insolvent and is liquidated, the network cannot be allowed to die with it -- it's simply too extensive and all of the wireless and cable systems can't offer a realistic national alternative. So as I asked at the start of this thread, public take-over of that network? Then, under pressure from the EU, seek to sell it off? After all, the government is being told by the Troika to sell everything that's not bolted down if I understand it.

When Telecom Eireann was sold off, the public were enticed to invest. My wife invested her savings in it, but after a year I strongly advised her to sell as I could see the writing on the wall. She did, and got most of her money back. Those who stayed in lost the lot. So now, if the government is forced to buy back the telecoms network to preserve it, will they then seek to sell it to the people who already own it (the taxpayer)? After all, the government of the time did that with Telecom Eireann.

This goes further than just what is happening to Eircom. Instead (for me anyway) it has implications for the whole philosophy of privatising state assets. The rule seems to be to float it on the markets, and suggest that the tax paying public should invest in a golden opportunity. Invest their savings to become owners of a tiny proportion of a now private company that they actually owned upright before. I am tempted to suggest, in danger of being flamed, that this is fraud.

Ah! but that's OK because this is government policy and was entrenched in the mandate sought from the electorate. It is, therefore, above the law. Ergo: Politicians are above the law.

Roll on the revolution:D

GSF

ART6 wrote: »

Those who stayed in lost the lot.

No they didnt

Delancey

I worked in Eircom for period a few years ago and have to say it was indeed still gripped by a Civil Service mentality , lethargy and indifference seemed to be the order of the day - that is my perception at any rate.

Sleepy

The government buying the network is the worst case scenario really isn't it?

I think I'd be in favour of what The Corinthian is suggesting: let it go to the wall and allow a private sector to pick up the network in the liquidation sale and attempt to run it at a profit.

GSF

Delancey wrote: »

I worked in Eircom for period a few years ago and have to say it was indeed still gripped by a Civil Service mentality , lethargy and indifference seemed to be the order of the day - that is my perception at any rate.

From talking to friends who work there there seemed to an Indian caste like hierarchy of staff

1970's hired civil servants
1980's hires with very strong contract terms
Staff on 3 year contracts
Staff on annual contracts
Staff on 1 month notice terms

The productivity of employees usually seemed to be an inverse of the contract terms they were on.

antoobrien

GSF wrote: »

From talking to friends who work there there seemed to an Indian caste like hierarchy of staff

1970's hired civil servants
1980's hires with very strong contract terms
Staff on 3 year contracts
Staff on annual contracts
Staff on 1 month notice terms

The productivity of employees usually seemed to be an inverse of the contract terms they were on.

I worked there for the summer in 2000 (in a call center) and that's a gross injustice to the many of the people I worked with, a significant number of them had been around since the 70s & 80s.

If anything I found it was the younger ones, who quickly lost their idealism while working in a call center, whose productivity lacked. They were short timers and they knew it. It had more to do with ones attitude to the jobs than anything. At least the long timers were consistent in their attitude - because you knew what you were getting.

There are no civil servants left in Eircom, that status died when the P&T became TE. They may have permanent contracts, but that makes them no different to the majority of the staff of multi-national I work for (myself included).

As for the caste system you referred to, it's common in many places that the managers are picked from the experienced people, however in the office I worked in that was not always the case. There were many people still on the phones, with more years than some of the managers around.