brunos

As I mentioned above, the special bylaws of AFKL insure that France has a big representation on the Board of Directors
Three directors are appointed by the French State. I think that the three of the four employee representative are French Several independent directors are former French civil servants
Within the constraints set by the bylaws, directors are appointed by the general assembly,, But the French State has double votes. Hence, the Dutch State influence will first be rather indirect unless they can manage a coalition of shareholders
The good thing is that the French State-owned culture that is still pervasive at AFKL might take a serious hit And I am not sure that Ben Smith is so unhappy about it

San Gottardo

irishguy28

If anything, it could be that it is because of Ben Smith that this move was taken.

There was a LOT of discussion in the Dutch media regarding whether Pieter Elbers would be kept in his role in KLM. He is popular within KLM and is seen by the Dutch to be standing up for KLM's interests, which are increasingly seen as being under threat within the AFKL group. Ben Smith (and others) wanted to move him out as he had proved far too successful in defending KLM's interests.

Bloomberg: Air France-KLM's Dutch arm goes to battle over unit CEO Elbers
Bloomberg: Tensions rise at Air France-KLM over fate of Dutch unit's CEO
Business Insider NL - Pieter Elbers vs Ben Smith (in Dutch)

As such, I can see that the Dutch government chose to make this investment to counter any future tinkering that is seen as favouring AF to KLM's detriment, something that the Dutch already perceive as being a threat under Ben Smith's stewardship.

jsfr

Seems that Elbers, and the Dutch in general, are very concerned about the future of KL - and not the future success of AFKL (of wich they are a part).

Reminds of copany politics in the multinational I work for where many people aggressively defend the interests of their own department instead of working for the enterprise goals.. Sad.

That said, now they have a big (ish) stake in AFKL, maybe they will work to that. And maybe as things are slowly sorted in AF, there will be more focus and oversight on KL

irishguy28

The other view is that AFKL is attempting to "nix" the best-performing part of the Group. Forcing out the CEO that is largely seen as instrumental in pushing through the type of cost savings and productivity increases that no-one in AF or AFKL has managed, as was initially proposed, does not seem to be aligned with "working for the enterprise goals" - unless that goal is to bring KL down to AF's level, rather than to bring AF up to KL's level.

The Dutch view is that AFKL is broken, but that KL is the part that is working. And you don't fix something by tinkering with the bit that's working.

canadavid

Dutch government has incresead up to 14% tonight....

Meneer Guggenheimer

Coathanger

Being neither French nor Dutch I have no skin in the game, but am finding this public tussle very interesting.

Qantas used to be a bit of an industrial relations challenge until the current CEO Alan Joyce grounded the fleet during a dispute in 2011. It seemed a high risk strategy but since then the airline has gone from strength to strength.

In this situation, I can absolutely understand the Dutch position if KLM is providing a higher ROI but the AF staff get the payrise. Does anyone know the comparable salaries on both sides (i.e. were the KLM staff previously paid more than the AF staff for the same job)?

Also of note is the economic importance of each airline to their respective economies and the impact of shifting AFKLM Group focus from AMS to CDG.

BobTL

NickB

I am not so sure that I would describe it in terms of defending KLM's interests but rather as one of defending KLM's autonomy, which is not necessarily the same thing.

We seem to see everything about AF through that particular prism but there are other things at stake here. It seems to me that Ben Smith is intent on running AFKL as a more integrated company rather than as two separate fiefdoms. From that perspective, the move taken by the Netherlands seems to be designed to directly oppose that and strengthen KLM's autonomy. Indeed, the FT speaks of a Dutch diplomat referring to this as "taking back control".

That said, it could in some sense be turned to his advantage, not so much in terms of culture as such, but in terms of being in a better position to resist pressure from the French govt by arguing that this might create problem with the Dutch govt. In other words, a rebalancing of French and Dutch interests on the board of AFKL may not be such a bad thing and could conceivably give Ben Smith more leeway just as much as it might tie his hands, depending on how the Dutch govt plays its cards.

Zembla

Meneer Guggenheimer

Zembla

Satie

One of KL biggest feeder market is...France. While the Dutch market is insignificant for AF (very far from Italy, Germany, Spain, UK...).
IMO KL benefits more from the AFKL merger than AF does.

BobTL