Tuesday, September 16, 2014

Russian oligarch Yevtushenkov placed under house arrest


My Orchids. Phalaenopsis "Red October". Photo ET












































Russian oligarch Yevtushenkov placed under house arrest

According to multiple Press reports, Russian oligarch Vladimir Yevtushenkov has been placed under house arrest. The India Times is quoted by saying that “Russian investigators said on Tuesday they had placed Vladimir Yevtushenkov, the chairman of conglomerate Sistema, under house arrest, accusing him of money-laundering in connection with the acquisition of shares in oil producer Bashneft.” 

Yevtushenkov owns 64% of Sistema, Russia’s largest conglomerate. According to the Financial Times, “Sistema said in a statement that it considered the allegations against him “wholly unfounded” and said it would use all possible legal means to make its case.”

Sistema’s Board is of particular interest to Luxembourg, as Vladimir Yevtushenkov is also Honorary Consul of Luxembourg, and former Luxembourg Minister of the Economy Jeannot Krecké is a Board member of Sistema, along with the former British Minister and EU Commissioner Lord Mandelson.





Monday, September 15, 2014

ISIS, Luxembourg, the US, the EU and the UN


My Orchids. Oncidium "Dance of the Dervishes". Photo ET





















ISIS, Luxembourg, the US, the EU and the UN

Bringing those entities together in one headline brushes a surprising picture of Luxembourg in world affairs, a result of some personal political ambitions. Indeed, Luxembourg provides the President of the future European Commission (the unelected European government), it sits on the UN Security Council, and while punching beyond its weight, it sees itself drawn into a vortex of unsolvable conflicting interests. Looming in the background is ISIS.

Luxembourg has provided 3 of the 12 Presidents of the European Commission so far

The former Luxembourg Prime Minister Jean-Claude Juncker has successfully recycled his career into the European Union’s unelected government, the 28 member strong European Commission,  actually heading it as its President. The last time he failed, he was heading the 14 member strong Luxembourg government, loosely supervised by him, and which crashed before the end of its term in 2013. Hence the need for his recycling.

His new “Eutopean” Commission which takes office in November stands for “Change”. Also a recycled slogan it appears. Juncker insisted that he was opposing the concept of a United States of Europe as the ultimate goal of the European Union, perpetuating the more than 60 years old misunderstanding of the aimless and uncertain European integration process. Which actually confirms that there is no political will in Europe to make a credible common front in world affairs. There isn’t even a credible European military force to project power in an uncertain world, where the new US isolationism has produced the state of world affairs today, including ISIS.

The Commission will thus manage the usual chaos, and explain that Europe with a combined 50% more people under arms than the US, cannot accomplish any credible military intervention or exercise any deterrent for its own interests, if the US does not lead. A couple of thousand ISIS fighters have European passports. If Europe does not confront them on their battle ground, they will bring their battle to Europe. Add to this picture Putin’s challenges in the East: what is the European Commission to do about it? It has no teeth.

Meanwhile, back at the UN ….

Jean Asselborn, Juncker’s former Vice-Prime Minister in the last Juncker government moved Heaven and Earth in a (costly) bid to get Luxembourg a seat on the UN Security Council. I never had a kind word for that project, knowing that the UN is also a chaotic and failed organization for having seen it from the inside. I would argue that Luxembourg is 0.00007% of the world’s population, almost half of them foreigners (!), and has a vested interest in being a good friend with the whole world, as it is living basically off the world by providing it with sovereign niche services.

It was disturbing also to see Asselborn leaning out of the window on the Palestinian-Israeli war in an un-nuanced way, contrary to what many in his electorate may think. Real Politik would suggest that you forget personal ambitions and stay out of such a beehive where you don’t have a chance to make a difference, except turning old friends into enemies. Luxembourg in its second year on the Council has not saved the world, and its goodwill, focus and failure on Syria let it face reality. It didn’t make a difference elsewhere either, except for an occasional emergency check here and there to pay for a crisis not of our making. Asselborn conceded recently that the UN is “powerless”, the one term fits all excuse for UN failures (which are its members’ failures).  I told you so, and 60 countries have avoided so far making an attempt to sit on that same Security Council, just for satisfying the doubtful ambition to be a second category décor amidst the 5 veto powers pursuing blatantly their own agendas. The other utopian dream of Luxembourg changing and saving the world is ending in a nightmare called ISIS.

When times get rough, there used to be the US

Luxembourg is of course too small to assume its own external security. Its people are peaceful, which explains that we believe the charlatans who sell us an international guarantee for everlasting peace and security. We therefore fell for the UN, which we learnt from Asselborn is powerless, as if we didn’t yet know. But way before we enjoyed the illusion of a “perpetual unarmed neutrality”, guaranteed by the Treaty of London in 1839 by the “Great Powers”, namely Austria, Prussia, the Russian Empire, the UK and later France. That perpetual peace was violated twice by two German invasions in 1914 and 1940, lasting for 4 years each. Twice the Luxembourg unarmed, peaceful, and neutral victims of international aggression had to be liberated by US Forces, which taught me to put more trust into a Great Power’s protection if it was the US overseas, than the bullies, in historical terms, next doors. Of course we expect the US to take care of ISIS. We also are vaguely fearful, because some passports held by ISIS combatants ae Luxembourg passports, and because though peaceful, we have learnt what Schiller knew, that “the most peaceful person cannot live in peace if a wicked neighbor does not wish it.” There lies a reality however, that the US has still to acknowledge. President Obama was elected on the promise to end wars, and won the Peace Nobel Prize for this promise. It is an ideological constraint on the US not to take military action. But you cannot escape Schiller’s terrible argument. Without exercising power, you’ll not be left alone by bad neighbors. But after acknowledging the need for military intervention, even blessed by the Pope, how to exercise power in an efficient way, is yet a second challenge it seems for the US. There is an obvious and pervasive lack of resolve stemming from the idealistic approach that some rhetoric and nice words ends wars. It fuels them.

Luxembourg was liberated from German annexation in September 1944 by US troops, just 70 years ago. If it had to happen again, what would be the situation in occupied Luxembourg, given present US doctrine to wage war? There is first of all a reluctance to say the nasty word “War”. It is in conflict with official posturing for a President who ends wars, and doesn’t start them. The viciousness of ISIS however forces that hand. So a public opinion call for action triggered a timid response, with a whole glossary of terms vetted by a Public Affairs Committee. The President “has no strategy”. The war, let’s call it rather “targeted counter terrorism”, where we “rely on air power, but wisely.” Those are belittling terms to prop and suggest that military force is only used modestly, and because there is no other way. In the case of Syria crossing the Red Line a year ago, the military response was said by Secretary Kerry to be limited in time and unbelievably small. There wasn’t any at all. And there will be no US boots on the ground to fight ISIS. (There are 1,400 on the ground though, but only casually visiting to train some “allies”). This choice of words, each one passing the Committee first before being pronounced, reveal the present political reluctance, and lack of resolve to go for an all-out war on terror again. It is more acupuncture, but does it treat the ISIS cancer? That is the state of the political discourse in the US, and it has been exactly the will of the US electorate, reluctance to war. Though public opinion, scrutinized narrowly by the political echelons, has swung around after the vicious and Machiavellian beheadings of westerners that ISIS performed and used as propaganda.

So the US Administration is dragged into action by public opinion more than by willful leadership. The belittling vocabulary used to describe future military action however must for now comfort ISIS, should make old allies fearful, and have military leaders pull the ejection seat under protest. The term “leading from behind” is probably the most baffling thing military leaders ever heard. Yet it defines the fundamental US posturing, and if it had happened during WW II, applied to my Luxembourg hypothesis, this would be a flashback: US airpower is being wisely used and its missions are carefully targeted to decimate, degrade, and destroy German forces in Luxembourg. On the ground, the Luxembourg Resistance, mostly dentists and pharmacists, and Luxembourg deserters from German draft are getting US support, such as combat rations, and some training from non-combating US military personnel. Our valiant dentists are serving as forward air controllers for close air support to the attacking pharmacists, who have realized that aircraft don’t make prisoners and don’t win a war. They put their own boots on the ground. Alas, this is a demonstration by reduction to the absurd.

The Principles of the Art of War, one more time

It is time to elaborate a bit on what war requires, that if you start one or have been dragged into one, you need to win it. Or you lose! Therefore great minds over thousands of years have pondered about principles of the Art of War. If you don’t know those and cannot respect those, I gladly turn around Clémenceau’s statement that “war is too serious to leave it to the military”, into: you started a war, now leave it to the military, as they know its principles. Here is a recollection for dummies:

The first principle is: Proportionality between mission and assets, which means don’t even go there if you know, you really have no goal and if you can’t afford it. Or: are you sure you can beat them up?

The second principle is: Freedom of Action, which means never, never lose the initiative, and dissimulate your intentions. Don’t tell anybody what you won’t do. Or better, you wait for the right moment at the right place. Then let all hell get lose.

The third principle is: Economy of Forces, which means use them efficiently. Or better strike suddenly, fast and with all your might. Not wisely targeting.

I would like to add a fourth one, so obvious, that it shouldn’t even exist:

The fourth principle is: The winner takes all and makes the rules. ISIS does. No mercy, no dollar left behind.

The US it appears has become the most desirable foe to defeat you. We in Luxembourg know for a fact, and have inspired the famous movie with Peter Sellers “The Mouse that Roared”. The plot? Luxembourg was bankrupt and devised a plan to declare war and attack the US, get beaten up, but then take advantage of the incredible largesse of the winner always pouring dollars over the loser, who so becomes a winner. With Iraq and Afghanistan that got vastly improved. They tell the winner what to do and when to leave. And ISIS grows out of the chaos left behind.

Coming up

In the meantime Luxembourg has given up on its ambition to save the world at the “powerless” UN, it has renounced the vision of the United States of Europe as a real world power and cannot be an ally to destroy ISIS, and it will cater to its wounded veterans returning home from fighting the jihad for the Caliphate. But we are a candidate again for a seat on the United Nations Human Rights Council in 2022, where we’ll meet with representatives of such defenders of human dignity as Libya, Egypt, Zambia, and Qatar. Not that we are beyond any suspicion. No, I’ll actually file a complaint against the Luxembourg government and bring a personal case of my rights being violated before the European Court of Human Rights.





Thursday, September 11, 2014

Is Cargolux’s unique culture strong enough?


My Orchids. Dendrobium "Transparency". Photo ET



















Is Cargolux’s unique culture strong enough? 

Air Cargo News through its deputy editor Thelma Etim made an honest assessment of Cargolux’ present situation. The headline casts the fundamental question about the state of the company’s unique culture. It has been the key of past success, and is essential to overcome the present challenges. Transparency is one of the major ingredients to foster morale, a key building block of that famous Cargolux culture. It has suffered. A recent survey on issues of concern to employees could only convince 30% of them to bother responding. That’s a failure of management communication.

In his last press conference, the new CEO Dirk Reich seemed to talk more openly about challenges as he perceived them. There is of course posturing in view of upcoming wage negotiations, where he clearly announced management’s colors. He did also a better job than CFO Forson about 2014 losses so far, though both used convoluted language to hide reality, such as “we missed our target by $11 million in the first six months” for Forson, and expecting a good second half, total losses for 2014 could be contained in the order of $20 million, according to Reich. Which tells us nothing else, than we don’t want to be open about this, and no one at the press conference or interview asked the obvious follow-up question: what are those numbers now? The lack of transparency creates uncertainty, source of speculation, and degradation of a culture. However recouping both numbers cited by Reich and Forson, and given a budgeted loss for the first half of 2014 of $14.4 million, it is logical to extrapolate that CV lost $25.4 million by June 30th. Why not being upfront? Expose the problem, as all sides have to come up with a solution.


Not helping is the attitude of the Minister of Transportation, who is hiding under his desk with his grotesque claim that CV is a “private” company. He is in control of 57% of the company, considering the other shareholders who are owned by the government. So the claim serves basically to take shelter from criticism, but avoiding to be in charge is undermining the culture of trust. And certainly conflicts with his adventurous journey to Zhengzhou in April to officially inaugurate the ghostly maiden flight of the so-called “private” company, flight that never arrived.



Monday, September 1, 2014

Cargolux - upéry: Night Flight


My Orchids. Phalaenopsis "BVI Clone". Photo ET








































Cargoluxupéry: Night Flight

Last week's water cooler meeting at Cargolux was a nice chit chat. But don't take everything literally. Cargolux Italia isn't exactly what you understood by Friday, outsourcing an aircraft with its team of about 25 to Cargolux Italia. Dirk Reich rectified that the operation is not exactly affecting the Luxembourg operations. That aircraft is moved, because it is being replaced by the delivery of a new aircraft.  There are two good news at least: there are no losses in Luxembourg, and this operation also marks the end of the announced hiring freeze, since an additional team is being hired (in Italy).

Within a couple of days, those are pathetic contradictions, but welcome ones. There is a need of course to prepare for the night flight into the upcoming storm. And there are two major considerations that should be resolved ASAP.

The first is that the main effort back to profitability is cost cutting. A dangerous obsession, as cutting costs risks to cut into operations, which cuts into yields, which cuts revenues, which cuts salaries, which cuts morale.  
It is well known, or isn't it, that the profitability equation has at least two variables, the second being to increase sales, instead of cutting costs (only). which brings us to the second unresolved issue: the loss of half a dozen key managers, who have not been replaced by similar talents. People who can develop sales, new clients, new destinations and optimize operations. That would also bring the old excitement back.

Instead, is there really a solution called "Smart Cargo S.A.", as we learned on Friday, and that today is only a possible avenue. The company was thought to lease five aircraft from Cargolux and provide for recruiting the teams, at lower cost of course from outside the EU. My prediction is that this plan is doomed for various reasons.

The company will have problems to counter arguments of social dumping. The government will have difficulties to play the role of the casual onlooker who cannot intervene in the affairs of a "private" company. Minister Bausch tried to escape responsability with that ridiculous claim, whereas the government is the "beneficial owner" of 57% of the company through its various holdings. And finally, expect an emotional, if not ethics storm about the designation of Smart Cargo S.A. as the vector for this hazardous plan.

Smart Cargo S.A., initially created in2001, is managed by two former Luxembourg airfreight professionals, Pierre Wesner, formerly with Cargolux where he was VP Europe, Middle East, Africa, and Jean Godart, formerly with Luxair Cargo. The Luxembourg Register of Commerce reports the following about West Air Luxembourg S.A. which later changed its name into Smart Cargo S.A.:

West Air Luxembourg S.A., Société Anonyme.
Capital social: EUR 637.500,00.
Siège social: L-8080 Bertrange, 2, rue Pletzer.
R.C.S. Luxembourg B 83.004.
Il résulte des résolutions prises par l'actionnaire unique de la Société en date du 25 octobre 2013 que:
1. Monsieur Goran BERGLUND a démissionné comme administrateur de la Société avec effet au 25 octobre 2013;
2. Monsieur Gustaf THUREBORN a démissionné comme administrateur de la Société avec effet au 25 octobre 2013;
3. Monsieur Jean GODART, né le 7 avril 1950 à Luxembourg, demeurant à CH-8808 Pfaeffikon (Suisse), 18, Rainstrasse, est nommé administrateur de la Société avec effet au 25 octobre 2013 et ceci jusqu'à l'assemblée générale qui se tiendra en 2014;
4. Monsieur Pierre WESNER, né le 18 mars 1952 à Grevenmacher, demeurant à L-6212 Consdorf, 33, rue Hicht, est nommé administrateur de la Société avec effet au 25 octobre 2013 et ceci jusqu'à l'assemblée générale qui se tiendra en 2014.
Pour mention aux fins de la publication au Mémorial, Recueil des Sociétés et Associations.
Pour la Société
Référence de publication: 2013150238/18.
(130183734) Déposé au registre de commerce et des sociétés de Luxembourg, le 28 octobre 2013.

The company name was subsequently renamed :

 Smart Cargo S.A., Société Anonyme,

(anc. West Air Luxembourg S.A.).
Siège social: L-8080 Bertrange, 2, rue Pletzer.
R.C.S. Luxembourg B 83.004.
II.- As appears from the attendance list, all the THREE HUNDRED AND EIGHTEEN THOUSAND SEVEN HUNDRED AND FIFTY (318,750) shares, representing the whole capital of the corporation, are represented so that the meeting can validly decide on all the items of the agenda of which the shareholders have been beforehand informed.

Old stories (1) will come to the surface, like Cargolux BVI, Domaine Alice Hartman, and others, rightfully so or wrongfully.