Two hundred years after Brodie Willcox MP and Arthur Anderson founded what became P&O, the shipping line’s present owners trashed its reputation in minutes. The crassness of Thursday’s self-harming fire-and-hire operation made many speak of a “Ratner moment”, which brought a plaintive response from Gerald Ratner himself. He, after all, was an OK employer whose only sin was one unwise joke at the Institute of Directors (he got away with the same gag about a prawn sandwich lasting longer than his company’s cheapest earrings in a Times interview with me months before). Whereas the Dubai ownership of P&O Ferries torpedoed its historic brand with no humour or humanity, simultaneously infuriating employees, unions, the Department for Transport, the entire seafaring profession and all its booked passenger and freight customers.
Displaying neither care nor respect, without notice they brought the ships alongside and sacked 800 workers by video as buses of cheaper crews arrived, many recruited through opportunist fledgling agencies. The company was not on the brink and legalities apart there is moral disgrace in treating trained employees as disposable economies. Some of the agency staff walked out when they realised what was going on. At Cairnryan they said they were promised a “completely new” ship, and were surprised to be accompanied by security guards and confronted by shocked employees.
P&O’s manoeuvre is a disgrace, but emblematic of a wider disorder in business management. We keep being told that the pandemic and Ukraine have made us reconsider how the world works; we have learnt the fragility inherent in globalisation, with industrial components flowing across the world “just in time”, integrated markets linked by split-second IT, and resources from oil to blueberries traded between nations with vastly different ethics. Suddenly supply chains and pipelines are being seriously discussed and countries look back nervously at simpler times and wonder whether they threw out the baby with the bath water.
And on a smaller scale P&O’s behaviour should make organisations reconsider another modern business behaviour: outsourcing. Their weasel words — “third-party provider” — were all too familiar.
Companies which once had loyal canteen staff, janitors, security and cleaners long ago took to using agency staff whose conditions, pensions and pay scales they loftily regard as no concern of theirs. Local authorities have farmed out the job of human care: over 84 per cent of care beds for the elderly and many for children and vulnerable adults are run by profit-driven operators, some in tax havens. Their chief executives are responsible chiefly to shareholders and council procurement officers want the best price. We know what the results can be. The same applies to prisons and their inmates. A report by the Institute of Public Policy Research two years ago warned of the risk of depending on debt-fuelled private equity for essential services and accused the government of having “no credible plans” to control crises.
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Everyone has examples of this vogue for outsourcing “marginal” activities, from security and salaries to sweeping and sandwich trolleys, and everyone remembers when revelations about conditions and pay have embarrassed the main companies. Sometimes there’s a proper crash: remember the 2005 Gate Gourmet row, when a Swiss company backed by a Texas investment bank was supplying airline meals, riding its workforce hard with low pay and tough working conditions. Its sudden sacking of 639 employees in Southall brought chaos to Heathrow. But outsourcing remains a management school mantra: why land yourself with pensions, benefits and HR admin for the humbler worker ants when you can pay a set fee and let someone else enrol and control them? You can always dump them for a cheaper deal: they may hold your enterprise together but they are not “your people”, just materials you buy in.
I am not naive: I know sometimes outsourcing is logical and agencies are excellent. But you can lose the intangible human element of pride and belonging. Some of the people thrown off those ferries will once have been a bit proud to say “We’re with P&O!” and even jokingly remember that after the Peninsular War theirs were the only merchant marine officers allowed swords. I am old enough to have worked in or visited places where people had a simple, unfashionable corporate pride. On an Everard cargo ship in the 1970s a crewman, between the usual grumbles about management, told me proudly: “When Everard owe you a quid they’ll spend 50 to get it to you, but if you owe them one, God help you!” I travelled cross-country with the Post Office as a mid-rank official hurried van loaders towards the dawn train with: “The Royal Mail must go!” I was an agency typist in offices — IBM, Tanqueray Gordon, a German bank — and was scolded for insouciant filing by a young supervisor with the words: “In this company we don’t do sloppy. It just leads to a muddle down the line.”
I remember smartly uniformed BBC commissionaires who knew everyone’s face and why they were there, long before security was put out to tender. On a chilly night shift I have been warmed by feeling like a cog in a proud, respected machine.
Well, maybe the 21st century is sleeker. I sense outrage and reproofs building below the line. But surf around international business publications and often you find cautious suggestions about uncertainty and security becoming motives for insourcing: “bringing expertise and processes back in-house”. A bit late for P&O, but interesting.
