SeaFrance Takeover Decision Delayed

On Tuesday, a French court delayed a decision on a bid from a worker cooperative to rescue SeaFrance after President Nicolas Sarkozy surprisingly backed the takeover in a u-turn. The commercial court delayed the decision of the legality of the CFDT-supported bid for the ailing cross-Channel ferry company. The offer is the only left to rescue the firm; and Philippe Brun, a lawyer for the worker cooperative, says the ruling has been postponed to Monday, January 9.

Sarkozy made the preservation of jobs a priority of his unannounced bid for a further mandate, with unemployment threatening to surpass 10% of the workforce just four months before the presidential election. The president held a meeting with key ministers earlier this week and supported the Scop cooperative, which will be financed by the lay-off payments of workers at state-owned rail group SNCF, which is the parent company of SeaFrance. In a letter to the cooperative, he said that he asked the parent group “to set up an exceptional supra-legal indemnity” for fired workers so they can use the funds to finance the Scop.

Scop’s offer is backed by the CFDT union and is the only one left to rescue the last French company serving the formerly profitable Dover-Calais route after the French capital’s commercial court rejected other offers in November. SeaFrance directly employs 880 people in the northwest of the country, which has been the hardest hit, while at least as many people are indirectly employed.

Transport Minister Nathalie Kosciusko-Morizet says that the lay-off payments and “exceptional” payments could amount to between €50,000 and €60,000 per worker. Regional authorities say they can contribute €12 million to the company, which would cover the €40 million to €50 million (together with the workers’ indemnities) needed to get the business up and running again.

However, the workers are sceptical about the u-turn from Sarkozy. Brun says that the state taking an interest in SeaFrance is a good thing, but the way it’s happening and the solutions being proposed are bad. The legal arrangement is “preposterous” and has little chance of going anywhere, he added.

SeaFrance is a direct competitor with P&O, the British ferry operator. The French company carries millions of passenger across the busiest sea route in the world every year, but both groups have suffered from Channel Tunnel competition since 1994. SeaFrance took a hard hit in 2008 from the financial crisis, and 700 jobs were shed in 2010 before it was put into receivership.

A spokesman for P&O tells journalists that they will take action in European Union courts if the cooperative takeover gets the green light. If there is any indication that the French state continues to support the company, they will immediately lodge a complaint in Brussels and vigorously pursue the complaint.