News From Air Cargo Industry
Cargolux Mounts Pressure on Workforce
At first sight it sounds like an offer of piece CEO Forson had sent to the unions. As the main point in his letter he agrees to extend the collective work agreement (CWA) to 31st December 2014, he and his management had unilaterally terminated last year, embarrassing the employees. As such, he satisfies the union’s most pressing demands for reestablishing a constructive working atmosphere at Cargolux. However, when looking a little closer at his text, we note he mentions a number of conditions that the members of the executive and supervisory board expect to be fulfilled for prolonging the CWA. Forson speaks of “certain binding commitments” that he intends adding to a newly negotiated CWA. Explicitly he mentions four major points, documented below, which he expects the unions to endorse prior to signing a follow-up CWA contract. These are:

1.    A general review of the monthly savings from productivity and efficiency improvements in August 2014 “in order to determine the savings achieved to date as well as any expected shortfall.”

2.    In case a shortfall is anticipated, “additional employee cost saving measures will be implemented to achieve the target.”

3.    Should additional steps for saving costs be required and the unions not be able to identify measures acceptable to the company to achieve the financial target, Cargolux management will implement additional measures.

4.    If the carrier should meet its specified profit target for 2014, “the company will propose and recommend to its Board of Directors, compensation for such measures that have been enacted (as mentioned in point 3), and that have demonstrably closed a shortfall towards the US$ 12.5 million target.”

However, this latter aspect ends with a direct warning by Richard Forson: “It must be noted that the planned profitability for 2014 is still significantly below that which is required to ensure the continuing financial sustainability of the airline.”

In his letter to the unions he goes on to say that reducing workforce costs through either productivity or efficiency gains, or through lowering of a number of benefits, “is only one element of a series of actions that is presently in progress to strengthen the financial sustainability of the company.” This in line with other improvements in the carrier’s cost basis, emphasizes the carrier’s helmsman, is essential to enable the airline to weather volatile future economic storms. “It will enable us to compete more effectively with our non-EU competitors.”

Mr. Forson’s two page letter to Luxembourg’s unions LCGB and OGBL ends on a reconciliatory peace note: “We are convinced that the (above mentioned) additional points make the package a fair and equitable solution. We look forward to hearing from you.”

Forson’s letter was welcomed with anything but enthusiasm by the members of Cargolux’s works council as this note documents:
“Dear colleagues of the negotiating team,

On behalf of the delegation, following today’s meeting I would like to inform you that we have unanimously taken the decision to recommend initiating the conciliation procedure with the ITM***.

We are of the opinion that this move has become inevitable following Management’s latest letter dated May 20, 2013.

We trust this recommendation will find your agreement and the necessary steps will be initiated by the two unions in the days to come.

Thank you. Best regards”

David Massaro
President Delegation
Permanent Staff Representative
Cargolux Airlines International S.A.

*** ITM stands for Inspection du ‘Travail et des Mines’ that acts as conflict mediator for settling labor disputes.

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