BA will sack strike-hit caterer

Christopher Leake, Mail on Sunday
14 August 2005

BRITISH Airways is preparing to sack the hard-line American-owned catering
firm whose strike has cost the airline almost £50m and brought chaos to more
than 100,000 passengers. Outgoing BA chief executive Sir Rod Eddington has
told senior colleagues he is sickened by the way Gate Gourmet sacked 670
mainly Asian and female staff by megaphone and email last week.

Now Sir Rod has vowed that Gate Gourmet's £130m annual contract will be axed
when it comes up for renewal next year.

BA executives are actively searching for other firms to take over the
provision of 80,000 meals daily for passengers flying from Heathrow. It will
no longer depend on a single supplier to prevent a repeat of the airline
being held to ransom.

Close friends say Sir Rod is ' incandescent' over the confrontational
tactics adopted by Gate Gourmet's chairman and chief executive, American
David Siegel.

Siegel, 42, has a fierce reputation in the US where he has been at the
centre of a number of hard-fought industrial conflicts.

A union official last night accused bosses of Gate Gourmet, one of the
world's biggest airline catering companies, of treating staff 'like slaves'.

Yesterday its UK managing director, millionaire Eric Born, was at the Hilton
Hotel at Heathrow's Terminal 4 in talks with Transport and General Workers'
Union national secretary Brendan Gold to thrash out a peace deal. The T&GWU
wants the immediate reinstatement of sacked staff, plus guarantees on
benefits to lift wages averaging £12,000.

Mr Born, 34, is the sole director of Versa Logistics, a company set up
earlier this year to bring in lowerpaid workers from Eastern Europe if there
was a walkout.

Happy to state last week through a spokesman that Eastern European workers
were prepared to work for less money, he lives in a £1m converted barn at
Crowsley, Oxfordshire, with his wife and two children.

Joining him at the talks was Gate Gourmet's German general manager, Hans
Boesch, who was behind huge cutbacks by the firm in Frankfurt, where staff
were persuaded to work longer hours for less money.

Gate Gourmet is set to lose £25m this year after losses of £22m last year.
On Wednesday it dismissed staff and, according to union officials, locked
some in a company canteen for more than five hours without water or toilet
facilities when they tried to hold a union meeting. Security guards carried
out a pregnant woman when she refused to leave without being reinstated.

Some workers, including women on maternity leave, were sacked by phone or
email. The firm replaced them with 130 part-time casual staff.

This led to more than 1,000 T&GWU ground staff and baggage handlers staging
sympathy strikes, which stopped BA flights at Heathrow for 48 hours.

A senior BA insider said: 'Rod Eddington doesn't want to do business with an
organisation which treats its people like this. You can safely say we don't
want a repeat of this nonsense next summer, so Gate Gourmet will not have
its contract renewed. We are already looking at alternative suppliers.'

Last night disruption at Heathrow threatened to run for several days.
Yesterday 80 flights were cancelled, and some travellers faced the prospect
of a second night sleeping at the airport. BA said it was impossible to give
exact figures for the number of passengers who were still waiting for
flights because many had made alternative arrangements, but it is thought to
be several thousand.

Airport staff are also working to reunite would-be travellers with 10,000
pieces of luggage that have become 'stuck in the system'.

Last night T&GWU shop steward Sukhdev Dhillon described Mr Siegel as 'a
bully'. Mr Dhillon said: 'He has brought over this attitude from America and
this has caused the problems.

'I am ashamed to say that in this democratic country the company has treated
us like slaves.'

When multi-millionaire Mr Siegel flew to London last week, he was seen by
reporters being accompanied by four hefty bodyguards. This was regarded by
many as an over-reaction as most of his workers were middle-aged Asian
women.

At the heart of the dispute was the failure of Gate Gourmet management to
realise it could not bring its confrontational style to BA, where trade
unions are still powerful. One example cited by union officials claimed that
shop-floor staff were promoted to management positions and then made
redundant, allowing the company to say they were pruning the management
tier.

In America, Mr Siegel cut a swathe through labour relations. He started his
airline career at Northwest Airlines and held management roles at Avis
Rent-a-Car and Continental Airlines. He won a £2.5m package from US Airways
as chief executive last year after directors asked for his resignation. He
had clashed with unions after demanding a huge round of cost reductions.

Mr Siegel is a business associate of David Bonderman, a founder of Gate
Gourmet's US private equity owner, Texas Pacific Group. Mr Bonderman, who
has a fortune estimated at £6billion, is chairman of Ryanair.

Gate Gourmet admitted last night that it had stepped up security for
executives once the dispute became unofficial, but refused to discuss
security for Mr Siegel. A spokesman said: 'A security firm was used, but we
never go into details.'

On claims by the T&GWU that members had been locked inside a canteen, a
spokesman said: 'Nobody was taken hostage. The workers who were dismissed
were asked to leave and they refused.' The spokesman said Acas talks had
been adjourned and would continue today.

A T&GWU spokesman said last night: 'We expect Gate Gourmet to reinstate our
members as soon as possible. Then we can move on to talk about productivity
improvements.'