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AF staff vote down pay deal. Janaillac resigns. Benjamin Smith new CEO

AF staff vote down pay deal. Janaillac resigns. Benjamin Smith new CEO

Old May 4, 18, 7:43 pm
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AF staff vote down pay deal. Janaillac resigns. Benjamin Smith new CEO

I think that this topic might deserves a separate thread.distinct from the ongoing strike.
Air France-KLM boss quits as staff reject pay deal - BBC News

In the nonbinding vote, the deal was rejected by 55% of voters with solid participation (80%).
The CEO Jean-Marc Janaillac announced his resignation.

All very sad.
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Old May 4, 18, 8:46 pm
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Sad indeed. As I said in the strike thread, Mr Janaillac made a similar mistake to the one Mrs Clinton made: he thought he would win because he is on the side of common sense. It seems that when people have been frustrated for many years, rightly or not, they think differently and fight back when they can.

I think it is an illustration of the fact that thinking cannot be just based on cold facts, perception is key and the balance of power should not be mis-understood.

This will be interesting, although quite scary.
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Old May 5, 18, 3:15 am
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Very sad indeed and for sure, severe turbulences ahead
It reminds me also the 1997 period when Christian Blanc resigned after unions refused his restructuring plan and was replaced by JC. Spinetta
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Old May 5, 18, 3:22 am
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The whole idea of the referendum was an absolute joke for a start and those who thought or rather hoped that common sense would have prevailed amongst staff simply ignored the power that trade unions still hold in countries like France or Italy. Adding to misery, numbers for Q1 are not looking bright at all (especially if compared to the other direct competitors i.e. IAG/LHG) and things, at this rate, are very likely to take an even worse turn.

G
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Old May 5, 18, 4:32 am
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Originally Posted by AlicorporateUK View Post
The whole idea of the referendum was an absolute joke for a start and those who thought or rather hoped that common sense would have prevailed amongst staff simply ignored the power that trade unions still hold in countries like France or Italy. Adding to misery, numbers for Q1 are not looking bright at all (especially if compared to the other direct competitors i.e. IAG/LHG) and things, at this rate, are very likely to take an even worse turn.

G
Indeed.
I still cannot understand politicians who call for a referendum or early elections to get "popular" support. They should have learnt from history by now. A vote is just a cheap rant.
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Old May 5, 18, 4:51 am
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The way it's been reported, some of the unions appear as arrogant and out of touch with reality. Also the way it's been reported, (some of) the management also appear as arrogant and out of touch with reality, and naive - unless they were planning exactly for this. Yes it takes some determination to get out of this situation by talking to each other. Maybe it's time to get started!
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Old May 5, 18, 7:41 am
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Originally Posted by Goldorak View Post
Very sad indeed and for sure, severe turbulences ahead
It reminds me also the 1997 period when Christian Blanc resigned after unions refused his restructuring plan and was replaced by JC. Spinetta
An interesting and paradoxical parallel because whilst your reference certainly makes sense, it is also the case that Blanc had used precisely the same instrument of direct consulation previously... and won it by about 80% or so of the vote if I remember it correctly! It also shows the limitations of trying to use a "referendum" of sorts as a management instrument.
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Old May 5, 18, 4:18 pm
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Originally Posted by brunos View Post
Indeed.
I still cannot understand politicians who call for a referendum or early elections to get "popular" support. They should have learnt from history by now. A vote is just a cheap rant.
Terrible decision from the CEO - but perhaps it's better that he leaves as he has become part of the problem rather than part of the solution. The fact that the staff voted against "common sense" is a failure of his leadership. Had he been able to project a confident vision of the future (e.g. indexing wage increases to financial performance), while quietly cutting away at the "fat" that still exists within the organization, this could have been a whole different story. Looking at the hundreds of millions the strike will have cost, as well as the brand damage, perhaps a compromise with the unions would have been the smarter option, even if that meant kicking the can down the road.
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Old May 6, 18, 1:30 pm
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Looks like the political pressure is building up:

https://www.theguardian.com/business...-strike-action
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Old May 7, 18, 5:36 am
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Originally Posted by Ardecos View Post
Looks like the political pressure is building up:

https://www.theguardian.com/business...-strike-action
indeed, but politicians remain politicians and I will believe in what they say here if the next CEO is not again a political nomination (another énarque, friend of X or Y, etc). When I hear that Anne-Marie Idrac is a candidate, I can only think “here we go again”.
The French govt should sell all its remaining shares and let the AFKL group live (or die) on its own, and stop to interfere.
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Old May 7, 18, 5:46 am
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It is still difficult for me to imagine, how the CEO came to make what appears as a mistake (two actually: asking for a vote, and threatening to resign). Either he could not care what happens in case a "no" wins. (He could not possibly have thought he would win with certainty. Not at that level). How could he convince his team, that this was a good idea. Or they let him "go" because they (AF management) did not like him.
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Old May 7, 18, 6:19 am
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Only today the AFKL stock has lost 13% of its value.

Since its 52 week peak, it's down more than 50%.

The company's market cap is EUR 3.1 BN. A bargain for anyone suicidal enough to buy a company with such a toxic workforce.
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Old May 7, 18, 6:26 am
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Originally Posted by San Gottardo View Post
Only today the AFKL stock has lost 13% of its value.

Since its 52 week peak, it's down more than 50%.

The company's market cap is EUR 3.1 BN. A bargain for anyone suicidal enough to buy a company with such a toxic workforce.
In comparison:
Deutsche Lufthansa AG: EUR 11.64 BN
IAG: EUR 14.11 BN
Wizz Air: EUR 2.49 BN...........................
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Old May 7, 18, 6:37 am
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Given the financial harm AF has already incurred, I can't see how they could offer anything more than what has already been offered to the employees. I'm not really taking sides here but I'm curious if the employees really think they can get a better deal than the one that was offered, as the airline continues to lose money. I think they might have missed out on their best chance.
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Old May 7, 18, 8:29 am
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And Easyjet capitalization is over EUR 7 BN.
I would guess that the 3.1 BN of AFKL is all KLM, while AF component is near zero.

But remember that AFKL stock price reached 5 by late 2016 and early 2017.

A problem is that even if employees now accept the generous pay raise offered by AF, they would do so with bitterness and that would augur badly for tservice and the future of AF.
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