Things have changed in France. Unionization rate has decreased significantly. Major reforms have been adopted despite strong union protests. The government did not give in to their demands.
I'm not sure about unionization, but the French still love to strike. Thus employee morale seems to be as low as it's been before.
That's their perception. Ben Smith has not indicated in any way that KLM's role will be diminished. If he did, that would ridiculous as KLM is profitable and its hub plays an important role for both AF and KLM.
It would be ridiculous indeed. Yet it's on the record that the Dutch government decided this right after their meeting with Mr. Smith. We don't know what was said but it had to be something that triggered this action
KLM is for 51% in Dutch hands.
That is the case since 2004.
Someone in this thread said the holding owns 93% of KLM.
That is not true.
AF-KLM owns 49% of the airline KLM.
Yes it is a striking costruction.
The holding is the boss, but at the same time it has only 49% of the shares of KLM.
The holding owns 93% of dividend paying shares so it was true depending on how you look at it. It is also true that they don't own 93% of the voting rights, but the Dutch entities holding 45% of the voting rights have never used them since the inception of AFKL. Without those they own 93% of the voting rights as well.
My main question is - when Smith went to Holland two weeks ago to clarify the strategy and future organisation with Elbers. Did Elbers know this was going to happen and was Smith informed?
If he hid this information from Smith (who was then and is still now, basically his boss), that is deceitful and he clearly cannot be trusted in the AFKL group as it exists today and should be shown the door immediately.
If he was involved in the Dutch government taking this capital share after the meetings - that is also strange and certainly goes against the spirit of their agreements. Again I do not see how someone can remain in such a position under those circumstances.
And I do not see how you can fire a CEO that has unanimous support from the Government, staff and unions to the point where they planned on striking if he would be fired (still dozens of strike-days left to get even with their French colleagues) and heads the part that delivers ~80% of the groups' profits. What was deceitful was the intention to fire him and the Dutch government buying shares (likely with Elbers' knowledge and/or support) was a result of that, not the other way around.
Your comment (and that of almost all Dutch posters) that AF nees to become more competitive is fair, but I think it is also fair to acknowledge the steps forward in teh past few months since Smith has started... For example:
- Getting rid of Joon
- Exceptional progress in French union relations
Anyone could make exceptional progress in French union relations by caving in to most of their demands. That's exactly the problem about what has happened. KLM staff supported their employer by accepting worse but fair employment terms, and the French chose to strike instead and got their way. There's a reason why previous AF CEO's didn't chose that route: it isn't viable financially.
I am personally tired of discussion on profitability etc... as having sat on a number of boards of French companies where we avoided registering profits in France for tax reasons, putting most in Netherlands or elsewhere; In fact in one case, we would never even hold the board meetings in France for tax reasons... we held them in Amsterdam!!! Even though the company was French!
And I am tired of uninformed statements like yours. While it is true in general that The Netherlands offers a more business friendly environment than France there is no incentive for AFKL to shift profits to KL on paper as you imply, as AFKL only owns 93% of KLM and thus would be giving away 7% of their profits to other shareholders by doing that.
If Virgin Atlantic can be viable by itself (albeit with help of DL), why not KL (with help of DL)?
And the shares the Dutch government bought (14%) could make that happen if it is supported by DL (9%), MU (9%) and the KL pilots (5%). Without those extra 14% it'd be much harder to achieve without the cooperation of the French.
Last edited by Jetty
on Wed Feb 27, 2019 3:58 pm, edited 2 times in total.