Stena Line Outlines Make-Or-Break Strategic Plan

stena line
Image (c) Stena Line via Flickr

In a letter obtained by gCaptain, Stena Line’s Head of Human Resources Mick Ambrose layed out a difficult scenario to his company’s employees last week.

2003 was the last time that Stena Line, one of the world’s largest ferry operators, showed a trading profit and their financials are continuing to worsen as they expect a 30 percent rise in required pension contributions this year, while at the same time faced with £34 million in required payments to the Merchant Navy Officers Pension Fund and the Merchant Navy Ratings Pension Fund.

As a matter of survival, Ambrose notes that a financial improvement of at least 1.3 billion Swedish Crowns (approx.  £120 million) absolutely must happen, yet the improvement will require sacrifice.

To achieve bottom line improvements, Stena Line could simply adopt the hiring methods of their competition by employing non-UK or Irish seafarers and removing minimum wage constraints, however Ambrose believes there are other options which will enable the company to retain their current crews, while reducing employment costs by 10 percent.

Stena Line’s proposal is as follows:

1) No annual pay raises in 2014.  This will extend to all employees in the UK and Ireland, ship and shore. Similar actions will occur throughout the group internationally.

2) A postponement of the second stage of harmonization rates of pay to OBS staff on Stena Lagan and Stena Mersey, scheduled for 1 January 2014. The core Stena Line contractual terms have now been issued, and new working rosters are now in place.

The Company is committed to harmonization of OBS rates of pay & conditions of employment on this route, but we must be sure through these upcoming discussions exactly what we are harmonizing to, and therefore further changes in salary will be withheld pending further discussion.

3) The Technical Management of all Irish Sea vessels to pass to Northern Marine Group companies (as currently with Stena Precision, Stena Performer and Stena Hibernia).  Savings will be achieved by using the economies of scale associated with the management of a large international fleet.  Northern Marine will then be responsible for presenting Stena Line with safe, efficient and fully operational vessels.  Stena Line will continue to provide crew and concentrate on the commercial operation.

Ambrose points out that none of the above points affect current wage levels.  He adds that other options might include:

  • Increase in annual working time for all seafarers from 24 weeks to 26 weeks per year
  • Reduction in sickness levels and costs
  • Improved manpower utilization reflecting volumes
  • Introduction of new lower graded positions in some departments
  • New rates of pay for future new hires
  • Limited future pay reviews

More than anything, Ambrose is calling for discussions to progress on the issue rather than for employees to strike, a situation which would weaken Stena Line while causing “individual loss of wages and an interruption to business activity.”

Have a suggestion that may help resolve the issue? Feel free to comment in the gCaptain Forum HERE.