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Tuesday, 16 June 2009

Klutz of the week: Willie Walsh

Enough of politics for a while, the business stories are just too good to let go, and in particular we like to highlight the inadequacies of those in senior positions in major public corporations, so first up is chairman of Citigroup, Richard Parsons, who told a meeting on Monday that the bank may find it harder to retain and attract top employees while the bank is holding on to federal bailout money.

"I do worry we could be competitively disadvantaged if we aren't able to find a way to quickly repay TARP," Parsons said at a forum sponsored by Time Warner Inc, where he used to be chief executive. Look pal, if your “talented” executives weren’t losing billions, you wouldn’t need any bail out money. Go figure. It may not be such a loss.

But best of all is that perennial figure of fun, whose idea of a business plan for a highly capitalised well-run premium airline with high value prime time landing slots was to turn it into a low cost carrier. Willie Walsh has already announced that he will not take a bonus this year, even though the airline helpfully revamped its executive compensation scheme so he could still profit when BA made a loss. Mr Walsh is nevertheless entitled to an allocation of shares if BA outperforms its rivals, or to be more accurate, underperforms less badly than its rivals, and that is on top of his £735,000 basic salary.

But that is not the end of his frugality. Mr Walsh has also announced that he will not be drawing his salary in July, perhaps safe in the knowledge that the £60,000 cost will not cause too much of a dent in his bank balance. But he has asked the 40,600 BA staff to do the same, also telling them the company was looking for job cuts.

He said, “The new unpaid work option means people can contribute to the cash-saving effort by coming to work while effectively volunteering for a small cut in base pay”.

Get real. The idea of a business is that you invest capital and employ workers, by the fruits of which you sell goods and services on which you make a profit. If you ask your staff to work for free, that isn’t a business. That’s a hobby. Many airlines are started because pilots think they can turn a hobby into a business, but it looks like Walsh will finish of BA by going the other way.

Walsh has lost the plot. He might as well try to get his business out of trouble by asking his customers to pay for tickets and never fly, or suppliers to deliver their goods and tear up their invoices. If he can't make the business work wthout asking for charity handouts, then he shouldn't be in his position or drawing any of his £735,000 salary.

It's time for a new pilot in the cockpit. Perhaps one who knows how to navigate as well as bossing the cabin crew.

On reflection, make that klutz of the year so far.

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