Luxembourg's PM doesn't want chit-chat about Cargolux.

Grey Heron heading home. Naples, Florida. Photo ET

Luxembourg's Prime Minister Jean-Claude Juncker, who hasn't held a Press Conference in 8 months (!) despite a Solferino-like field of ruins in the Luxembourg economy, took to the Press on Friday. He had to squelch down voices in his own ranks that criticized a cowardly budget plan for 2013, that obviously lacks the minimum courage warranted in these times of crises. Our grandchildren will pay for that. He also wanted to squelch the voices that demand urgent clarification when it comes to Cargolux, its destiny and the future of its employees, the Luxembourg airport, even Luxair and the dream of "Luxembourg for Logistics".

Mr. Juncker makes the case that all the public talk is going to hurt Cargolux with the bankers. Well, the best way to stop it, is transparency. So you stop chit-chat with openness, truthfulness and honesty.  

The public has a right to know, and I would make the case, that the State being directly or indirectly a 65% owner of Cargolux, it is NOT a private company. It is the same issue that recently got a lot of attention and a court decision in Germany, that in the case of a majority holding in a company, the government needs to disclose information. Unfortunately, even in that case, it is difficult to find the truth, as Luxembourg, unlike all advanced democracies, has no "Freedom of Information" legislation (it has been blocked for 12 years already). It would allow the public, who has a right to know, to ask for any official documents, records, mail exchanges, etc. In the absence of such a right, one can only rely on insider information and on methodical analyses of what leaders say, but mostly who they are, what they have done before and if they do now what they said they would do. Without the right to know, that is the only way to figure out what is going on. But we all have the right to ask questions, and without truthful answers, speculate. Answers vs. Chit-chat. So, what can be done?

1. At the present juncture, only the Luxembourg government is (hopefully) aware of what is going on. It alone can give the public answers and appeasements, or it can still change the direction if need is. That is, if the still secret agreements with Qatar don't preclude the Luxembourg government from changing anything. Which is the case if the Qatar negotiators were really as good as I think they are, and our side was not. I'm led to worry about this, as Mr. Al Bakr treated management as incompetent. He is a shrewd negotiator, knowledgeable about negotiating terms and methods in private equity, venture capital and the like. He's not a win-win strategist but an "I win, you lose" one, which explains his disdain for the former management: he won, they lost, and now he is condescending. Witness his declaration upon signing the agreements: "Our investment in Cargolux, a sound, healthy and profitable company and a leading all-cargo carrier, will deliver great value to Qatar Airways proving to be an excellent strategic partnership". That sounds like a one-way relationship ! I would argue that the public who has taken a keen interest in the fate of Cargolux, employees and their representatives, should get full and truthful answers from both the Government and management about the totality of the agreements passed with QA.

2. I hope that there are no covenants in the agreements that at this stage have cornered the government and Cargolux, with no escape from agreeing to cede control to QA. That is the greatest fear, because over the last 15 months QA hasn't helped Cargolux (e.g. with capital) but hurt it (by competing unfairly), while we had still a say. We would find out very fast what QA's final agenda would be, without a say anymore. Alternatively, the public would be happy to learn that its widely held perceptions were without ground.

3. I see some rumors and even a report by Heiner Siegmund in "Cargoforwarder" about a QA claim, saying we want 100% of Cargolux, or we leave. That would be an immediate crisis, and it depends on what kind of agreement exists, but we don't know (yet). Depending on those, there might be no other choice than to give in. Or one  could call QA's bluff and offer a buy-back of shares,  or renegotiate fair practices and eliminate dangerous covenants. Unfortunately, good natured Luxembourg may have been trapped. The need for new capital remains in any case, if necessary from the Luxembourg shareholders. Which will be difficult if QA has a non-dilution clause or some veto power, all of which they could have negotiated for their 35%. We don't know how much they got in concessions. The government should also stop its practice to delegate Board members who are civil servants, and instead appoint knowledgeable independent representatives of various backgrounds to really support the company, defend the Luxembourg government's interest, and in this case to push back on a bullying new partner, and live a true partnership together, if that is the outcome.

Chit-chat until you tell us the truth.