P&O Ferries’ summary sacking of hundreds of seafarers in March 2022 was and remains perhaps the most ruthless act of “restructuring” in British corporate history.
From the furthest left of the trades union movement to the right of the Conservative government, P&O and its lightning-rod chief executive Peter Hebblethwaite were condemned for shamelessly putting profit before people, without the courtesy of notice and due consultation.
Two years on, the company remains unapologetic and a pariah to some, including the transport secretary. That may never change. But long-overdue accounts for 2022 do illuminate why the company acted as it did.
In 2022, buffeted by Brexit and with passenger numbers devastated by COVID, P&O was holed below the water line, leaking cash and sinking fast.
Losses in 2021 had swelled to £375m, with payroll costs for 3,018 employees – 859 of them seafarers – of more than £132m.
It was also in breach of its covenants on more than £70m of loans from an external lender underwriting the cost of new hybrid cross-Channel ferries.
Read more: P&O spent £47m sacking and replacing 800 British workers
Only rolling and increasing loans from parent company DP World were preventing P&O from going under.
As well as earning at least the UK minimum wage, those seafarers were bound by work patterns negotiated with unions, including the RMT, that P&O says lacked flexibility and left some crossings unprofitable.
By contrast one of their competitors on the Dover-Calais route, Irish Ferries, was exploiting international maritime law to pay agency seafarers far less.
Mr Hebblethwaite’s response – and DP World insists it was his call – was breathtaking. The unionised workforce was fired by video call, escorted from vessels and, after a four-week shutdown, replaced by workers largely flown in from beyond Europe for rosters involving months at sea.
That move saved more than £21m from the payroll and helped a turnaround the company says will see a return to pre-tax profit this year.
Ask P&O executives in Dover or those from its parent company in Dubai, and they will tell you the ends justified the means, and point out that passenger numbers are increasing.
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And these accounts have been filed just as legislation takes effect that would have removed any advantage from the sackings.
Since May, French law has required the minimum wage to be paid in French waters, and from December, UK law will require the same, making the Channel a haven of relatively high pay in a maritime industry overwhelmingly fuelled by cheap labour sourced from Asia.
It is an irony unlikely to be lost on seafarers who paid with their jobs.
(c) Sky News 2024: Why P&O Ferries’ pariah status may never change