P&O Ferries may not regret breaking law, but
the UK should regret dealing with its owner
Nils
Pratley
Thu 24 Mar
2022 19.17 GMT
More than a
few business chancers have appeared before Commons select committees over the
years, but it’s hard to recall a chief executive who has admitted that his
company carefully assessed its options and decided that breaking the law was
its best bet.
Peter
Hebblethwaite of P&O Ferries, the firm that sacked 800 seafarers last week,
offered candour and cynicism in the same breath. “There’s absolutely no doubt
that we were required to consult the unions. We chose not to do that,” he said.
For good measure, he said he would take the same decision again.
Naturally,
Hebblethwaite laced his account with pleas that P&O Ferries wasn’t viable
unless it replaced its UK crew with foreign agency workers being paid salaries
as low as £5.15 an hour. No doubt he’s correct about the many millions P&O
has been losing amid the pandemic and energy crises, but this was a brazen
attempt to claim that protecting wealthy parent DP World’s investment was more
important than staying within the law. Trade unions would never accept P&O
Ferries’ proposals, said Hebblethwaite, so there was no point negotiating with
them.
Via video
link from Dubai, Jesper Kristensen, the chief operating officer of marine
services at DP World, weighed in that P&O Ferries was not a rogue part of
the corporate empire. Hebblethwaite would not be sacked, the mass dismissal of
the UK crew had been blessed in advance and DP loved doing business in the UK,
where its major investments are the Thames and Solent port terminals.
Government
ministers spluttered in the following session to explain why they had not
immediately run off to the high court last week. The gist of it was that the
Insolvency Service must be given time to get on top of the legal details. In
due course, ministers would look to close any loopholes in the law to better
protect employees.
Wherever
those subplots lead, one move for the government ought to be straightforward:
DP World, for all its wealth and state backing, cannot be considered a suitable
partner for the UK’s freeport programme. A company that declares a casual
relationship with UK employment laws does not belong in a government-backed
scheme. Nor, frankly, should it be here at all.
The Next 15
years
Don’t call
our 15-year stress test a forecast or a plan, it’s a “scenario”, said Next.
Even with that qualification, chief executive Simon Wolfson’s sums were
striking: the retail group could generate £14.7bn of cash between now and 2037.
That’s an upgrade of £2.4bn on the last time the modelling was done in 2019.
For
aficionados, the underlying assumptions were laid out in colourful detail,
including the critical input that like-for-like sales in the shops are assumed
to decline at a rate of 10% a year. The cashflow magic, as it were, arrives via
steady reductions in store rents and an assumed 6.4%-a-year increase in online
sales.
The long
perspective made Next’s £10m trim to this year’s profit forecast, and the
likely effects of higher prices and “chronic labour shortages”, feel almost
minor. In practice, the volatility looks a proper challenge, but, yes, there’s
every reason to think the structure is capable of handling most stresses, which
was the deep message in Next’s projections.
The
credibility of a 15-year outlook is improved after many years of success and
when the boss has done two decades in post and has no plans to retire. But more
companies should try their hand at mapping the horizon in public. Most say
they’re in the game of attracting long-term shareholders; this is one way to
show they mean it.
Slow-moving
Renault
Renault has
been shockingly slow to concede that its presence in Russia had become
untenable, but the rouble has finally dropped in the boardroom. The group has
suspended operations at its Moscow factory and is considering a sale of its
majority stake in Avtovaz, which owns the Lada brand.
The size of
Renault’s investment in Russia explains the slowness of the decision-making,
but does not excuse it. It has been obvious for weeks that a firm 15%-owned by
the French state could not continue to support Russia’s largest car
manufacturer. It should not have taken a public shaming by Ukrainian
politicians to reach this point.
Other
western multinationals who are hoping that their lower-profile operations in
Russia will escape scrutiny should take note. We’re well into overtime
for reviewing.
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