359: P&O Ferries: The political long tail of a crisis
The outcry following P&O Ferries’ announcement of mass redundancies was universal. Politicians, the media, trade unions, local communities, trade bodies and many others all condemned the actions of the company. But the impact of the crisis will have far-reaching implications for us all.
Commentators rightly pointed out the failings in the decision and the way it was communicated, not least to the company’s workers. The actions genuinely shocked in a way that few others have. Even some of the worst decisions made during the Covid crisis paled in comparison. P&O Ferries seemed to ignore every guide to reputation management but, more importantly, took no notice of the impact on its employees. P&O Ferries seemed to do everything that companies are not meant to do, not least simply ending the employment of so many people immediately and without consultation. But they will have taken advice on all these issues.
It appears that there was some engagement with the Government before the announcement was made but Ministers have since been busy working out exactly what action they may be able to take.
There is obvious damage done to the P&O brand, not just the ferries business, and it is not yet clear what the reaction of consumers will be or even whether the company will be able to find new staff to replace those they so brutally got rid of. The unrelated P&O Cruises have taken the very sensible step of making this clear on their website. A lot of the initial coverage did not make the distinction clear.
But there is a long tail to the crisis that will impact on us all:
- Covid payments – depending on what the Government’s approach is to P&O Ferries, anyone who took payments from them during lockdown could have, in effect, accepted that politicians can intervene in their operations. In other words, if we do not like the decisions you now take then we will, at the very least, seek to reclaim funds or shame those who you enter sponsorship agreements with etc.
- Future contracts – the Government will look to insert clauses into its future contracts to allow it to act, such as cancelling the arrangements, in the event of poor decision-making by any company.
- Future ownership – not just a result of P&O Ferries’ actions but also the invasion of Ukraine, more questions are being asked about the UK supply chain and the ownership of strategic assets. The country has decisions to make about how open it is to investment in some sectors and whether state-ownership may be a better option in some cases; and
- Deregulation backlash – one of the key benefits of Brexit was said to be the ability to remove unnecessary regulations with employment being one of those areas. The ease of P&O Ferries’ decision will place a question mark beside that approach. A similar deregulatory approach could then be similarly questioning in other areas such as the environment, especially in the event of corporate failings.
As things stand, the Government appears to wish to keep their actions targeted on P&O Ferries rather than its owners, DP World. Their involvement in the Government’s high-profile freeports initiative, as well as its position as a global port operator and a Dubai-based company, appears to have secured some protection, at least initially.
Politics and government are at the very heart of the long tail to this crisis. A number of companies and sectors will have to consider the potential implications for them. A lot of these issues will not be going anywhere even if government would prefer them to.