The Cargolux Saga Continues Unabated

Things seem to be taking a further turn for the worse at CV and when following the latest developments, one wonders whether it might not be of greater benefit to the company if the present Chairman of the Board were to step down in order to bring the internal strife to an end!

This is the second part of our article on CV, the first which appeared in the February 4th issue of CFG, where we reported on the continued unrest within Cargolux due to the departure of its two top managers.
Their exit from CV seemingly related to a continued confrontation with Paul Helminger, the Chairman of the Board of Directors. His differences with the CV management lie mainly around Helminger’s steadfast support of the much publicized Henan deal despite the objections from day one of his management team, unions and workers council members. This has resulted in the loss of the two top managers on top of the fact that the carrier still has no full term functioning CEO.
This becomes apparent when reading the transcripts of letters written on December 13th by both managers to Mr Helminger. These were aired by Luxembourg’s “Radio100,7 Aktuell” on 29 January and are freely available for scrutiny on their website.

Source: Heiner Siegmund; Which way is Cargolux heading? That’s the million euro question
Source: Heiner Siegmund; Which way is Cargolux heading? That’s the million euro question

The final result of the mess left behind by the Qatar retreat has left CV with no CEO, no Chief Commercial and no Chief Operational.
The carrier deserves better than this, as it’s not due to any lack of commercial or operational management that has brought the airline into a state of limbo; but seemingly moreover due to lack of leadership and “listening qualities” from the very top!

Source: Cargolux; Chairman Paul Helminger is facing growing criticism
Source: Cargolux; Chairman Paul Helminger is facing growing criticism

Is this really the case?
Two top managers exit of their own accord at more or less the same time!
Both managers took great pride in their commitment to the carrier and have been instrumental in keeping it afloat during the past years despite hard economic times!
Both are known for their pragmatic approach to the market and could by no means be seen as short minded or internal trouble makers!
It seems that they independently raised their concerns to the Board of Directors (BOD) steerage of the airline for some time, but claim that their voices have not been heard!
Was the past CEO, Ulrich Ogiermann forced out by the Chairman of the BOD and replaced with in the meantime two (interim!) CEO’s who it seems did not have the necessary experience to manage Cargolux properly; or were their appointments “politically arranged” in order to bring the carrier into the “Henan Deal?” - One which was not supported by the airline’s Executive Committee (EXCOM).

When reading the above mentioned transcripts - then it would be easy enough to assume that this was the case!
If so, then the result would be damage to the internal structure of Cargolux, despite the fact that both top managers as well as the airline’s Workers Council have put their pen to paper in the hope things might change.

The letters from the (past) management!
One of the managers, in his letter to Mr Helminger, proposes a “six point plan” in order to stabilize the company.
In short - this includes:
CV needs a new CEO with industry know-how
The BOD should initiate more trust and motivation into the management.
Communication and interaction between BOD and EXCOM needs to be “real.”
There are not enough industry experts present in the BOD - which he states is the case today.
The BOD should take a closer look at the CV/Henan deal, recognize the challenges the management faces with this arrangement and the apparent message from the “Schaus-report” that any failure to reach these would lie at the door of the management.
That it’s imperative to avoid CV developing into a semi Luxembourg governmental entity and provincial Chinese bureaucracy run carrier whereby it’s network is determined by a steering committee set up by both countries and furthermore, that subsidies will never be of long term benefit to the business.

In the other letter the manager is particularly critical of the “lack of functioning” by the BOD towards the CV management and the company as a whole.
He states that there are no members, but one, in the BOD who have the necessary knowledge on the running of an airline or who have the much needed air cargo experience to go with it.
He goes on to say that in his view the BOD prefers to hire expensive consultants from outside instead of taking time to listen and put its trust in the EXCOM, as well as it’s apparent disrespect for the people who have built CV into what it is today.

Source: Cargolux
Source: Cargolux

And what about a new Management?
The search for a new CEO has been on the cards for a long time.
This now widens into looking for new Commercial and Operational management.
Are they readily available in-house? - Probably not!
It is claimed that a well known (and expensive) head hunter is now on board. But who would be willing enough to take up such a challenge if all or part of what’s been written and denied internally  during the past week’s were fact.

Possible CEO candidate’s names have been voiced internally and externally:
Bruno Sidler, ex Panalpina CEO and surely one who knows the carrier well, knows the business inside out and the people at CV - would he does this to himself?
Robert Schaus, the gentleman who on behalf of the BOD made up the report on the Henan deal. Is he in the running; is he neutral and does he have the much needed experience required for this challenging task?
Richard Forson - still in the game, or also now sidelined?
And, then that leaves also the Henan provincial government, who it is rumored would want to have “one of their own” chosen people from China as CEO. One can assume that there is a name in the pot! This is an issue which would surely not go down well with the freight forwarding community as a whole.

There are probably more out there, but the carrier needs a helmsman who knows the business, will be respected by staff and clients alike and who will have the authority to take decisions without unnecessary hindrance.

The BOD as governing body, has to realize that it’s time to draw conclusions from all of this and that it’s the future of the carrier which is at stake and any further unrest will definitely be to the detriment of the carrier’s standing in the market and will erode it’s results even further.
In this respect, then would CV not be better served by being able to start with a clean sheet. The newly elected government in Luxembourg as main shareholder and free of past government decisions, may be well advised to make this a priority issue.
Serious candidates for the CEO position will surely follow this debacle and therefore for them to be able to get on board properly, and, for the good of the carrier, the Chair at the BOD should be vacated and the Board readjusted.

The loss of the two managers is a hard blow to bear and it’s our view that the company should do all possible to “get them back on board.”
If this were possible, then only when the room at the top is rearranged.
Hard, but fair!

A ship without a captain, first officer and first mate can quickly end up on the rocks whilst those at the Admiralty continue to turn a blind eye.
This cannot be allowed to happen to this much respected carrier which needs the profile it deserves in order to get back to the daily business at hand.

John Mc Donagh