Dr. Félicien M. Steichen, MD on Wikipedia

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Dr. Félicien M. Steichen, MD on Wikipedia

In 2011, I had the sad mission to honor Dr. Félicien Steichen as a friend, a good neighbor, a doctor and a great scientist in the Luxembourg Business Journal. 

Letter to a Great Luxembourg Scientist, Dr Félicien M. Steichen, MD, 1927-2011

Dr. Steichen passed away at age 83, after a life filled with the passion of bringing innovative medical solutions and life-saving technologies to the world, his students and his own patients. His son François has brought an important contribution to his father’s legacy to my attention: an extensive biography with references to his extensive work on Wikipedia.

Here we go to the Wikipedia page Félicien M. Steichen

Update:
There is a more modest version of this on the Luxembourg language Wikipedia

Cargolux in the Press

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Cargolux in the Press

Cargoforwarder, a leading newsletter for the cargo business, carried a favorably disposed interview with Dirk Reich, CEO of Cargolux. There were the good news: Zhengzhou flights are full. The bad news are: return flights are almost empty. But that was to be anticipated from the beginning of the partnership.

The solution, it is said, is to include German airports on flights to Zhengzhou to increase German cargo at more competitive prices by reducing trucking costs, as 20% of freight comes from Germany. The vigilant employee organizations should listen to this: reducing trucking costs by getting closer to the German client shipping cargo to China. What about cargo shipped from China to German clients? How close has that airport to be?

We also get a progress report about the new joint-venture airline to be set up in Zhengzhou. It got a name, Cargolux China. The question no longer is if but when the JV will be operational.

On October 28^th, Cargolux corrected or explained the misleading misunderstandings and misquotes away:

Luxembourg, 28 October 2014 - Due to some misleading statements in the media, Cargolux would like to point out the following.
As foreseen in the cooperation agreement between Cargolux and its shareholder HNCA, a feasibility study for the set-up of a joint venture cargo airline, based in Zhengzhou, is currently undertaken. At this point, the airline does not exist; its set-up depends on the outcome and evaluation of the feasibility study that is expected to be finished next month. Only then will the Cargolux board and management decide on future actions.

In addition, Cargolux is studying the possibility of adding intermediate stops in Germany or other countries on its flights from Luxembourg to China, in order to optimize loads on these eastbound services. No flights from Luxembourg will be replaced by flights from Germany or other countries, all Cargolux China flights will continue to operate to and from Cargolux’s hub at Luxembourg Findel airport.

Unfortunately some more intrusive questions of the day were skipped. Such as:

• Despite the low load factors on return flights from Zhengzhou, are those flights profitable? We know they were not meant to be profitable, and a $15 million fund was set aside to subsidize the operation. Another newsletter, the LoadStar poses similar questions.  
• Cargolux had some unwelcome publicity from the wing wave incident involving President Operations Captain Marcel Funk, Vice President Operations Captain Wieger Ketelapper, and First Officer Benedikt Stock. Though this is not a strategic issue, it is of interest to see how the new CEO is handling obvious risky behavior. During the wing wave, bank angles were probably exceeding 30 degrees and very close to the ground. It was obviously a very broad interpretation of the Cargolux Spirit, all the more when a manager is at the commands, and there were previous incidents. Good news here are that the FAA seems to ignore this incident, and that CEO Reich seems to have enforced a strict application of the “Just Culture” concept.

Which brings us to the two other good news of the month: Cargolux is not a private company anymore, and will fly to Tokyo in the near future!?

Reversing former affirmations that Cargolux is a private company, Minister Bausch traveled to the International Air Cargo Forum and Exhibition 2014 in Korea in support of the company, and mostly to Japan to sell the idea of a direct Cargolux connection to Tokyo. Nice trip. He made it to the Japanese Vice-Minister of Transportation, probably a career civil servant,  who promised he would analyze the question. Our man understood that we made progress, a good step forward. Translation for Mr. Bausch: that means NO! It only can’t be said that way in Japanese diplomatic culture.

Which reminds me of an anecdote: In 1984 a delegation presided by then Crown Prince Henri and led by then Secretary of State Paul Helminger traveled to Japan. Nice trip too. In Mr. Helminger’s bags were two “Grand Officier de l’Ordre du Mérite”, that were bestowed upon two Japanese Senators for their invaluable help in securing landing rights for Cargolux in Tokyo. The ceremony went well until one of the Senators in his speech expressed his deepest thanks for the high Luxembourg distinction, and also his regrets that the announced landing rights unfortunately could not be confirmed. CV was offered Fukuoka as a destination instead, as a positive refusal. So good that almost 30 years later the government as a majority shareholder through Mr. Bausch forced a breakthrough.

Bad Karma at Deutsche Bank?

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Bad Karma at Deutsche Bank?

Zerohedge.com gives an overview over Deutsche Bank’s various outstanding liabilities, under the headline: „ Another Deutsche Banker And Former SEC Enforcement Attorney Commits Suicide”.

The author starts evoking a wave of suicides among top bankers in 2014, among them 2 senior executives of Deutsche Bank, William Broeksmit in London in January, Charlie Gambino just recently in New York. From there a possible reason is found in the multiple points of risk and the overall situation of DB, which prompted the bank to increase its litigation reserves to €3.1 billion and contingent liabilities for fines at an extra €3.2 billion.

Business-Friendly Bureaucrat Helped Build Tax Haven in Luxembourg

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Business-Friendly Bureaucrat Helped Build Tax Haven in Luxembourg

The WSJ put its fingers on the crucial Luxembourg issue of the moment: tax avoidance. Of particular interest must be the revelation that for so long tax rulings have been a one-man show ….

Luxembourg has to navigate these waters too, after years of being under pressure to give up its tax evasion strategies, now is the time to address the pressure on tax avoidance schemes that often also involve Ireland, the Netherlands, BVI and Panama. This is happening at a time when the lines between tax avoidance, tax evasion and indeed money laundering fade away.

Luxembourg’s line of defense is going to be denial, claim legitimate application of all laws and agreements and subsidiarity.

I’m almost amused that so much generosity has been applied to multinationals in one meeting. Time ago I was victim of a financial crime in Luxembourg. More than 10 years of legal proceedings still are not over. I still finance the criminals' lifestyles. However, in the meantime, the Luxembourg tax man found revenue that was stolen from me, and I never knew. I was taxed on the stolen money!  I was invited to ask for a tax ruling, for forgiveness of the Euros 7,500 (not billions) in taxes through a "demande gracieuse". But my request for a tax ruling to forgive tax on stolen money took months, probably half a dozen people conspired on the about 50 pages of documents, and …..it got rejected! Of course crime pays for the Luxembourg tax man! He is a tax robber at his moments.

Andy Schleck, winner of the Tour de France 2010, ends his cycling career

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Andy Schleck, winner of the Tour de France 2010, ends his cycling career

In a Press conference today, Andy Schleck confirmed the rumored information that he was ending his cycling career as a professional. The reason for this premature retirement is his well-known accident and the ensuing knee surgery. However, many efforts to overcome the injury obviously failed. Andy Schleck is 29. It is not known what comes next. There is a 50-50 chance that a political party will show up and entice him into a political career. There you only need sharp elbows though.

Andy Schleck was declared winner of the Tour de France 2010, after Alberto Contador was convicted for illegal substance use.

U.S., U.K. Regulators Push to Settle Deutsche Bank Libor Case This Year

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U.S., U.K. RegulatorsPush to Settle Deutsche Bank Libor Case This Year

The Wall Street Journalreports about the sequel of the well-known Libor affair. By coincidence, this might be a good on the job training for Luxembourg’s former Minister of Finance/Justice etc. Luc Frieden to handle a hot potato, as he just joined Deutsche a month ago, in a much commented abandonment of his elected position as a Member of Parliament. A position as a member of the opposition, for which he declared himself unfit was unbearable according to recent interviews: there was only one choice, member of the government or nothing. 

A Cargolux winkie-winkie with consequences?

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A Cargolux winkie-winkie with consequences? 

The City of Zhengzhou, the second aircraft that Cargolux named after the partner city in China, has not only become a one of a kind twin in the CV stable because of the name. It also had already a vast social media presence, where images from its takeoff were circulated, showing a vacillation to the left and then to the right in a supposed goodbye winkie-winkie.

This maneuver close to the ground is reminiscent of a failed demo of an A 320, Air France flight 296 on June 26h, 1988, where at a show, a risky demo close to the ground failed and the aircraft crashed, and three people died. Fortunately in this case, the story eventually had a happy landing.

Not for everyone it seems. Rumor has it that the US FAA is investigating, and that Cargolux grounded three pilots.

First Sukuk issued in Luxembourg

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First Sukuk issued in Luxembourg

According to sukuk.com:

“Luxembourg’s Sukuk represents the first ever European Monetary Sovereign to issue Sukuk. The order book being only twice over subscribed indicates less than stellar demand and is to be contrasted to the UK’s recent Sovereign which was ten times over subscribed.”

There were 29 bidders.

As the first ever issue, the sukuk listed on the Luxembourg Stock Exchange, has of course test balloon value. It ddidn't fall flat, but it wasn't stellar either, compared to the London threshold. If the Luxembourg government hoped for more interest, what would explain the “less than stellar” interest? It can only be two categories of reasons: a lack of marketing, or some level of lack of confidence in the issuer/euro/financial center/Euro Zone.

Prescription in view of next number two: drum up marketing, talk up the 

relatively good issue number one, and prepare for a better roadshow.

At multilingual Cargolux, “Divide et Impera” prevails over “L’ Union fait la Force”

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At multilingual Cargolux, “Divide et Impera” prevails over “L’ Union fait la Force”

It is a bit of a Tower of Babel out there at Cargolux. Unions no longer seem to present a united front. That is the case formally. Though on substance they still pursue very similar objectives: job guarantees and opposition to the scaling back of salaries and benefits.

Management through Mr. Reich now comes to the conclusion that Cargolux is on track to have a $50 million loss in 2014. Only 2 months ago, CFO Forson denied that the first half of 2014 produced a loss of close to $25 million. Let’s just believe that those 2 statements from 2 top managers are accurate, and conclude then that most of the loss will necessarily be incurred in the second half of 2014.

The facts then are very disturbing:

- The losses at Cargolux will mostly occur when all reports show healthy growth in the air cargo world. News services such as cargofacts, worldacd, and theloadster all report healthy demand and growth in air cargo. Only Cargolux obviously seems to be left out of the trend.

- The losses also occur after the departure of too many seasoned managers, a situation brought up inthis blog earlier in the year. Don’t successors match up?

- The projected losses also have a surprising side, as the CFO recently had sounded optimistic in an interview to cargofacts. Is the present contradiction to that optimism negative posturing in view of CWA negotiations? The government, indirect majority shareholder, says nothing, expressing that way its silent approval? A rehearsal of more things to come in the public sector?

The recent moves to divide and conquer can only be part of a strategy to dismantle present employment agreements and privileges, in an effort to reduce costs and losses. Cutting costs is obviously one category of tools in the toolbox to get the finances in order. But among them, pay cuts cut into the employees’ morale and productivity, and undermine Luxembourg’s social peace. 

Increasing business, and certainly not losing business is the more elegant tool to erase losses, and it doesn’t cut into morale. Good performance boosts morale. But this strategy takes top performing managers, who are difficult to replace once they have left. The margins in the air cargo business are too small to allow for average performance only. In the case of Luxembourg, the problems will always be compounded by trucking costs.

According to recently disclosed plans, there is a possibility to almost double the number of aircraft as a way to achieve profitability. Hidden but assumed is that such a plan might include outsourcing to Cargolux Italia or the already named Smartcargo, or even as a concept, to the new JV in Zhengzhou as the intermediary steps in a “rejuvenation” of Cargolux into a bigger, leaner and meaner Cargolux. One understands that in order to translate such a contradiction of terms, bigger and leaner, into reality, the detour through outsourcing is necessary, a gradual process of the salami tactics. The almost 100% increase in aircraft into a low cost operation hopefully erasing at a minimum the present losses of core Cargolux.

In summary the plan seems to be to cut salaries through outsourcing, reduce payroll at present CV through attrition, increase the number of aircraft, and pray.

One always needs a plan. Then realities catch up, and nothing will play out totally as planned. The good surprise would be that management succeeds in increasing business, the other variable to play with for getting finances in order!

The Ebola explosive mix

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The Ebola explosive mix

With the recent appearance of an Ebola case in Dallas Texas, a complex confluence of logical deductions from a person who thinks he or she might be infected risk to defeat public health officials’ careful and meandering logic between appropriate preventive measures, education, and the belief that they should avoid creating a general panic and turmoil.

Unfortunately, both logics cannot be reconciled, and the onus lies on the government. An excess of prudence and political correctness, weighing words and levels of transparency in order to minimize the threat will eventually induce benign neglect at all levels and increase the problem. Over 2-3 days, the story of the Dallas case has evolved from not disclosing the infected person’s name nor the airlines used, from having been in contact with vaguely 12-18 people, because of “privacy” issues, to what seems to be a higher level of alert today. We now know the patient’s name, the name of the airlines and the itinerary, and by now 80 people seem to have been identified as having been in contact with the patient.

All this is happening after the well-publicized success in repatriating and treating a US doctor and a nurse who contracted Ebola while volunteering in West Africa. Their chances of survival staying in West Africa had to be evaluated as dramatically lower than going through the complicated logistical effort to get them home for an eventually successful treatment.

The story of the healing capabilities in the US cannot be lost on the populations exposed in West Africa. They have also been educated that the incubation takes a couple of weeks before signs of the illness show up. If you think you have been exposed, you have life and death decisions to make, among those the preeminent one: where do they say people got healed? In the US of course.

I don’t know whether that was the assessment made by the patient in the Dallas case: I was exposed, I’m probably infected, I better go to the US where people get healed, and wait it out there. If ever symptoms show up, I go to the ER.

That possible scenario is a huge public safety and public health challenge, from how to handle the related travel, transfer and US entry questions. And as the Dallas case shows, health professionals need to adhere scrupulously to the adequate protocols. 

The threat can be handled with realistic policies and discipline in applying them.