P&O Ferries may not regret breaking the law, but UK should regret dealing with its owner | Nils Pratley
MMore than a few successful businessmen have appeared before House of Commons select committees over the years, but it’s hard to remember a chief executive who admitted his company carefully weighed its options and decided that breaking the law was his best bet.
Peter Hebblethwaite of P&O Ferries, the company that laid off 800 seafarers last week, offered candor and cynicism in the same breath. “There is no doubt that we were required to consult the unions. We chose not to,” he said. For good measure, he said he would make the same decision again.
Naturally, Hebblethwaite added to his account that P&O Ferries was only viable if he replaced his British crew with overseas agency workers on wages as low as £5.15 an hour. He’s undoubtedly right about P&O’s millions in losses amid the pandemic and energy crises, but it was a brazen attempt to pretend that protecting wealthy parent company DP World’s investment was more important. than obey the law. Unions would never agree to P&O Ferries’ proposals, Hebblethwaite said, so there was no point in negotiating with them.
Via video link from Dubai, Jesper Kristensen, chief operating officer of maritime services at DP World, said P&O Ferries was not a rogue element of the corporate empire. Hebblethwaite would not be sacked, the massive dismissal of British crew had been blessed in advance and DP loved doing business in the UK, where its main investments are the Thames and Solent port terminals.
Government ministers stammered in the following session as to why they had not immediately gone to the High Court last week. The main thing was that the insolvency service had time to familiarize itself with the legal details. In due course, ministers would seek to close any loopholes in the law to better protect employees.
Wherever these subplots lead, a government decision should be simple: DP World, for all its wealth and state support, cannot be considered a suitable partner for the UK’s freeport scheme. A company that declares an occasional relationship with UK labor laws does not belong to a government-backed scheme. Nor, frankly, shouldn’t he 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,” Next said. Even with that qualification, chief executive Simon Wolfson’s sums were stark: the retail group could generate £14.7bn of cash by 2037. That’s an upgrade from £2.4bn. pounds compared to the last time the modeling was done in 2019.
For aficionados, the underlying assumptions were laid out in colorful detail, including the critical entry that comparable store sales are assumed to decline at a rate of 10% per year. The cash flow magic, so to speak, is coming via steady reductions in store rents and a supposed 6.4% per year increase in online sales.
The long-term outlook has seen Next slash this year’s profit forecast by £10m, and the likely effects of rising prices and “chronic labor shortages” seem almost minor. In practice, the volatility seems like a real challenge, but, yes, there is every reason to think that the structure is able to handle most stresses, which was the deep message of Next’s projections.
The credibility of a 15-year-old prospect is enhanced after many successful years and when the boss has been in the job for two decades and has no intention of retiring. But more companies should try their hand at mapping the horizon in public. Most say they are in the game of attracting long-term shareholders; it’s a way of showing that they mean it.
Renault in slow motion
Renault was surprisingly slow to admit that its presence in Russia had become untenable, but the ruble eventually fell in the boardroom. The group has suspended operations at its Moscow plant and plans to sell its majority stake in Avtovaz, owner of the Lada brand.
The size of Renault’s investment in Russia explains the slow decision-making, but does not excuse it. It had been obvious for weeks that a company 15% owned by the French state could not continue to support Russia’s biggest carmaker. It should not have been necessary to publicly humiliate Ukrainian politicians to achieve this.
Other Western multinationals who hope their covert operations in Russia will escape scrutiny should take note. We’re well into overtime for the exam.