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P&O - the fire & replace gamble that's backfiring

From a completely clinical viewpoint, yesterday’s actions by P&O make sense. Senior executives from the parent company, DP World, headquartered in Dubai, look at their balance sheet: P&O is losing over £100 million pounds a year – costs which are mostly outside of their control (e.g. fuel) are rapidly increasing which suggests that the only viable solution is to reduce the costs that they can control – staff.

Now this comes from a company which allegedly claimed almost £15 million in government grants and furlough payments in 2020. Probably the most disturbing aspect from yesterday, is the information that subsequently came to light suggesting that there had been weeks, if not months, of planning that went into this action: the selection of the unfortunate staff, the identification of agency replacement staff, the planning of the easiest way to get existing staff off the vessels, the hiring and training of security staff to remove staff from the ferries.

Then there’s the legal aspects – the seafarers contracts were allegedly held in the Channel Islands, not mainland UK. The suggestion is that due to this, and the fact that the jobs are operating in international waters, that maybe the normal consultation period of 45 days to officially put a person’s job ‘at risk’ doesn’t apply. This of course, resulted in a short pre-recorded message delivered by a senior P&O executive to the unfortunate 800 individuals, telling them (with an alarming lack of emotion) that their contracts had been terminated with immediate effect.

Yesterday's actions sparked outrage from all sides of the House of Commons – with the government calling the actions of P&O – ‘wholly unacceptable’. It’s unlikely however, that P&O or DP World will face any penalties from the UK government – I’m sure it wouldn’t want to be associated with anything directly or indirectly responsible for further job losses.

The irony of all of this of course, is that whilst DP World appears to have meticulously planned the lead up to the ‘spectacular’ events of yesterday, there is one thing it doesn't seem to have planned fully for – the backlash from the public (and potential clientele). With all the things that have happened in the world over the past couple of years, there appears to be a growing sense of injustice about things that people consider to be just plain 'wrong'.

The gamble for P&O is that when it comes to people’s holidays, they hope the memories and subsequent views of their customers will be somewhat short lived. I suspect that this might not be the case.

In our commercial conflict planning we need to consider all of our stakeholder's emotions and their resultant possible behaviours. There are occasions when people will walk away from what looks like ‘a good deal’ because in their view, the other party have just behaved too badly.

Sam Macbeth, 18th March 2022

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