FOR INVESTORS

Discrimination lawsuits, labor disputes, and failures to protect public safety have costs not only for workers and local communities, but also for G4S itself.  In addition to direct costs, G4S has lost significant contracts in the United States and Indonesia. Moreover, the type of management decisions that bring on these social problems also seem consistent with a low-road business strategy which, if pursued, could threaten the company’s ability to take advantage of opportunities created by a growing demand for high-quality security.

Problems at the American subsidiary Wackenhut are particularly disturbing. Performance troubles – such as incorrect weapons handling, improper threat response, and unreliable equipment – suggest the possibility that Wackenhut has not committed itself to improve the quality of its service to meet the demands of the more perilous post-9/11 security environment.  Many of these problems are documented at www.eyeonwackenhut.org.

The evidence from around the world suggests that G4S is ignoring the advantages of competing on quality instead of price. This sparks concerns that the present strategy is destined to leave the company chasing the industry trend toward high-quality security rather than leading it.

Read our 2006 Alternative Annual Report, Group 4 Securicor: The High Cost of the Low Road, for more information and analysis, or check out the 2005 Alternative Annual Report and our Investor Newsletter archive for more background.

For more information on how G4S' bad practices are impacting its financial prospects, contact Steven Weingarten at weingars@seiu.org or 011 212 947 1944.

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