Cargolux: Can't you see the agreement there on the
table?
No doubt, Cargolux has
been bleeding money over most of the past years. We know that most of those
losses were the result of corporate blunders, such as the price-fixing scandal
and the QR fox in the chicken coop. But through all this, Cargolux has also
been pretty resilient in those adverse conditions. Which bodes well for the
prosperity of the new after-scandal Cargolux.
As for an agreement
with the unions, a reality check shows that the deal IS actually on the table.
Really, to an outside observer the ongoing drama about disagreement is more of a
kabuki theater. Maybe ego related, as it happens normally in a negotiation. So
take a deep breath: Fact is that there has been mismanagement in the past, none
of the employees' fault. Which leaves less money on the table. And for sure the
company can only distribute the wealth it creates. So by now, the
government/owner has in fact promised to do a better job in appointing a new
Chairman. The unions on their side show a new flexibility in leaving their
former line of refusal, and creatively thinking through a proposal where they
share the cost of cleaning up the mess. Effectively giving up long held
positions. I believe, that's the deal!
The devil is in the
detail maybe, but the details here are based on management's projections. Last
year's projections of a $60 million loss were 50% wrong. A discussion about
what needs to happen in 2013 and 2014 is equally hypothetical and should not go
beyond considering a handful of scenarios. Among them the pessimistic one put
forward by management, requiring savings of $12.5 million on the salary mass.
I
would boldly also consider the best case scenario: where the new management
does a good job, where employees get incentivized by a smooth and fair
agreement, and maybe some creative reward programs for innovation proposals. That
will add a tiger in the tank. The fleet is one of the newest in the world.
Markets should improve as the US seems to overcome 4 years of weakness and the
EU discovers that austerity is indeed very austere. There can be bright years
ahead.
On that background the
detail is actually to be negotiated between the two as a reciprocity: you win,
we win, or you lose, we lose. It is all about setting up criteria. What happens
then in the real scenario is what settles the issue. It needs to be a scenario
that has its rewards, not only risks. And when it comes to risk taking in that
case, it is mostly on the employees' side. Indeed management could mess up
again. Old hands are still around. Therefore
the solution could even include a pool of CV shares controlled by the
employees and based on the concessions to be made, as a guarantee, and everyone
has skin in the game. Not to forget obvious avenues such as revisiting the Azerbaijani
offer for deeply discounted fuel, that could not be accepted in the past,
because Luxembourg fuel is so much better. Just an example of a million here, a
million there.
A smooth exit out of
the present crisis will make a new investor comfortable enough to get in. I'm actually
aware of some good prospects right under our nose. As they are not in the airline
cargo business, no cannibalism needs to be feared. And, that would be icing on
the cake.
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