Gate Gourmet (merged)
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LONDON (Reuters) - Beleaguered British Airways faces a Tuesday night deadline to resolve a dispute with Gate Gourmet or the caterer will go into administration, a source close to the airline's sole supplier of in-flight meals said on Sunday.
The source said Gate Gourmet had set the deadline for reaching an agreement over the caterer's demands for better contract terms and higher prices.
"Unless we can agree, we'll go into administration on Wednesday," the source added.
Gate Gourmet, owned by U.S. private equity firm Texas Pacific Group, is also in talks with union representatives after it sacked 660 staff earlier this month, which triggered wildcat strikes and the cancellation of over 700 flights at London's Heathrow Airport. The union wants the sacked workers reinstated.
If Gate Gourmet goes into administration, the company would effectively be run by lawyers and could continue to provide a service to BA, but the move could equally lead to a new bout of disruption at Heathrow, the source said.
Gate Gourmet was not available to comment on the talks with British Airways but issued a statement saying it had won a High Court injunction on Sunday to restrain unlawful action by the dismissed workers and intimidation from picket lines.
"The judge has taken the unprecedented steps of making the TGWU (Transport and General Workers Union) now accountable for any illegal action by the dismissed workers and by naming 17 individuals who would be held personally accountable for any illegal action," said Eric Born, managing director of Gate Gourmet in London, in the statement.
"We hope today's ruling will stop the death threats and the physical and emotional intimidation and abuse which has been directed against our staff," he added.
A spokeswoman for British Airways said the airline was still in talks with Gate Gourmet over the weekend.
She declined to say how much British Airways stood to lose over the catering row, although the Financial Mail on Sunday reported that the airline's loss had reached about 50 million pounds ($90.2 million).
"It's just too early to say," the spokeswoman said.
Last week a source close to debt talks told Reuters that banks were considering foreclosing on Gate Gourmet's senior debt.
The source said Gate Gourmet had set the deadline for reaching an agreement over the caterer's demands for better contract terms and higher prices.
"Unless we can agree, we'll go into administration on Wednesday," the source added.
Gate Gourmet, owned by U.S. private equity firm Texas Pacific Group, is also in talks with union representatives after it sacked 660 staff earlier this month, which triggered wildcat strikes and the cancellation of over 700 flights at London's Heathrow Airport. The union wants the sacked workers reinstated.
If Gate Gourmet goes into administration, the company would effectively be run by lawyers and could continue to provide a service to BA, but the move could equally lead to a new bout of disruption at Heathrow, the source said.
Gate Gourmet was not available to comment on the talks with British Airways but issued a statement saying it had won a High Court injunction on Sunday to restrain unlawful action by the dismissed workers and intimidation from picket lines.
"The judge has taken the unprecedented steps of making the TGWU (Transport and General Workers Union) now accountable for any illegal action by the dismissed workers and by naming 17 individuals who would be held personally accountable for any illegal action," said Eric Born, managing director of Gate Gourmet in London, in the statement.
"We hope today's ruling will stop the death threats and the physical and emotional intimidation and abuse which has been directed against our staff," he added.
A spokeswoman for British Airways said the airline was still in talks with Gate Gourmet over the weekend.
She declined to say how much British Airways stood to lose over the catering row, although the Financial Mail on Sunday reported that the airline's loss had reached about 50 million pounds ($90.2 million).
"It's just too early to say," the spokeswoman said.
Last week a source close to debt talks told Reuters that banks were considering foreclosing on Gate Gourmet's senior debt.
Join Date: Oct 2001
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"The real answer is not to change suppliers but to convince GG to move its HQ about 40 miles west to find a less well-connected local workforce!"
Well no, it's not really that good an answer.
Have you seen the speed of a GG or LSG catering truck?
Mark
Well no, it's not really that good an answer.
Have you seen the speed of a GG or LSG catering truck?
Mark
Join Date: May 2004
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Gate Gourmet......are they joking!!!!
The first thing to do is point out that I work for BA,so maybe my opinion is somewhat onesided on this point!!.
Although members of the T&G(which I belong to)I for one felt it totally wrong for certain sections of the BA workforce to walk out in support of union members from another company,on this occasion Gate Gourmet.
Gate Gourmet get paid a sum of money which they agreed to to supply a service.Due to poor management of both their money and their employees they find themselves in a total mess.To sack their workers by megaphone(disgraceful) and then have they cheek to blame BA (THEIR CUSTOMER) for their situation I find beyond belief!!
.
They now try to push BA into a corner and basically bribe BA into extending it's contract with them on the pretence that by 5pm today 23rd August they will go into liquidation,lay off all staff and then no catering at all for BA.
I hope not to upset anyone especially the passengers who must be totally sick of the past couple of weeks.However I would like to see BA stand their ground on this and if GG go into liquidation then it is of their own doing.
BA should then offer to buy GG out right for a nominal fee and take on the whole workforce on BA contracts,together with buildings and vehicles as part of BA and get the operation back to normal ASAP.
Otherwise we will have to wait months for a new supplier to get equiped and new employees security checks and airside passes.
When BA are in the wrong I will NOT back them but on this occasion I feel they are not.
TIN HAT ON!!!! Opinions please.
WTDWL.
Although members of the T&G(which I belong to)I for one felt it totally wrong for certain sections of the BA workforce to walk out in support of union members from another company,on this occasion Gate Gourmet.
Gate Gourmet get paid a sum of money which they agreed to to supply a service.Due to poor management of both their money and their employees they find themselves in a total mess.To sack their workers by megaphone(disgraceful) and then have they cheek to blame BA (THEIR CUSTOMER) for their situation I find beyond belief!!
.They now try to push BA into a corner and basically bribe BA into extending it's contract with them on the pretence that by 5pm today 23rd August they will go into liquidation,lay off all staff and then no catering at all for BA.
I hope not to upset anyone especially the passengers who must be totally sick of the past couple of weeks.However I would like to see BA stand their ground on this and if GG go into liquidation then it is of their own doing.
BA should then offer to buy GG out right for a nominal fee and take on the whole workforce on BA contracts,together with buildings and vehicles as part of BA and get the operation back to normal ASAP.
Otherwise we will have to wait months for a new supplier to get equiped and new employees security checks and airside passes.
When BA are in the wrong I will NOT back them but on this occasion I feel they are not.
TIN HAT ON!!!! Opinions please.
WTDWL.
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Whilst I agree with your sentiments I do not think buying Gate out after they have gone into administration would be particularly quick. BA would probably go under if they were without in flight catering for that long. It's a dificult one and BA are between a rock and a hard place on this one.
Join Date: Oct 2003
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There's something odd about all of this; it seems like an extraordinary position for a professional organisation to get into.
I still don't understand where the sympathy strikers fit into things.
I still don't understand where the sympathy strikers fit into things.
Join Date: Mar 2003
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Its a cunning plan
to make BA a NO service airline.
Then reduce the CC to MIN for safety needs.
With perhaps only specialist catering supplier for First.
Give food in Exec lounge for Business/First the arrivals lounge remains a good service so food on arrival........a coke vending machine in the aircraft Galley. ( commission on the vending is good business ).
Sounds like a plan to me....
Windy
Then reduce the CC to MIN for safety needs.
With perhaps only specialist catering supplier for First.
Give food in Exec lounge for Business/First the arrivals lounge remains a good service so food on arrival........a coke vending machine in the aircraft Galley. ( commission on the vending is good business ).
Sounds like a plan to me....
Windy
Join Date: May 2004
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Maybe we could also have vending machines throughout World Traveller with top quality sandwiches ,baguettes and snacks, tea,coffee and duty free sales.Doors that open automatically from the flight deck in an emergency,toilets that clean and stock themselves and robots to carry out CPR and fight toilet fires when yet another idot puts their cigarette out in the waste bin!!....oh I forgot the safety demo......ah that's on the video that everyone watches rather than reading their F.T!!
.
Damm I've just done myself out of a job
WTDWL.
.Damm I've just done myself out of a job
WTDWL.
Couldonlyaffordafiver
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Some First services are sleeper as it is. ie. no food, eat in the lounge before departure. In fact, it's considered one of "the" places to be seen to eat in NY.
Gate Gourmet are currently owned by Texas Pacific, a US-based venture capital company of the most landgrabbing sort, who bought the company from bankrupt Swiss a few years ago with the intention of just hiking the asset value by whatever means and then selling it for much more than they paid for it.
Having got into difficulties with things and thus being unable to sell it normally, their strategy today is to force BA to buy it for a considerable sum and get out with their proceeds, having manoeuvred BA into a difficult corner.
GG CEO is Dave Siegel, the one who appears on TV making the arrogant and aggressive statements. If he looks familiar, he is. He was CEO of US Airways (how are the mighty fallen) a few years ago when they were under administration the first time round, and had a similar attitude there.
Back at Texas Pacific, guess who is one of the principal investors ? None other than our good old friend Frank Lorenzo, who will need no introduction to obsrevers of abrasive management style in the aviation world ....
And heading the whole TP group up is David Bonderman, another familiarname. Not the same David Bonderman surely who is chairman of Ryanair ? Yes it is.
"Hey guys, here's a real good chance to screw BA, make some bucks, and get out of the GG hole, all in one".
Having got into difficulties with things and thus being unable to sell it normally, their strategy today is to force BA to buy it for a considerable sum and get out with their proceeds, having manoeuvred BA into a difficult corner.
GG CEO is Dave Siegel, the one who appears on TV making the arrogant and aggressive statements. If he looks familiar, he is. He was CEO of US Airways (how are the mighty fallen) a few years ago when they were under administration the first time round, and had a similar attitude there.
Back at Texas Pacific, guess who is one of the principal investors ? None other than our good old friend Frank Lorenzo, who will need no introduction to obsrevers of abrasive management style in the aviation world ....
And heading the whole TP group up is David Bonderman, another familiarname. Not the same David Bonderman surely who is chairman of Ryanair ? Yes it is.
"Hey guys, here's a real good chance to screw BA, make some bucks, and get out of the GG hole, all in one".
Master Baiter
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Didn't BA get rid of it's own catering to cut costs?
Doing this and becoming reliant on a sole trader is extremely stupid.
Why is BA surprised that they were tucked up? Of course they still insist that Gate is the only one they can trade with because BA demanded an unsustainable price structure, one that no one can compete with!
Let em eat cake ... or cold bean wrap
Doing this and becoming reliant on a sole trader is extremely stupid.
Why is BA surprised that they were tucked up? Of course they still insist that Gate is the only one they can trade with because BA demanded an unsustainable price structure, one that no one can compete with!
Let em eat cake ... or cold bean wrap
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It is called 'outsourcing' or 'downsizing,' I believe...
The way of the future is to have a sort of shell company, where you just own the logo but have no responsibilities whatsoever to whoever is actually working for you. If they are in trouble, well, that's nothing to do with your company!
Of course at some point you may well find that a critical role is being carried out by p1ssed-off and underpaid, so demotivated, minions. When you try to get better performance out of them they shall just laugh at you. What, take away their menial job? When they might be better off on the dole?
I am working on an outsourced contract myself, one which uses multiple layers of outsourced labour. It can be rather amusing to see people trying to figure out just how to assign responsibility, sometimes. Henry Ford may have had a better way of doing it after all. Or, put it another way, there is something to be said for paternalism!
Of course at some point you may well find that a critical role is being carried out by p1ssed-off and underpaid, so demotivated, minions. When you try to get better performance out of them they shall just laugh at you. What, take away their menial job? When they might be better off on the dole?
I am working on an outsourced contract myself, one which uses multiple layers of outsourced labour. It can be rather amusing to see people trying to figure out just how to assign responsibility, sometimes. Henry Ford may have had a better way of doing it after all. Or, put it another way, there is something to be said for paternalism!
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BA should then offer to buy GG out right for a nominal fee and take on the whole workforce on BA contracts,together with buildings and vehicles as part of BA and get the operation back to normal ASAP.
No, if GG go under, there will be people around willing to pick the pieces out of the ashes, and the GG workers may well find themselves re-employed but without the current restricitve practises they'enjoy'. One thing is for sure, however, the catering contract for BA requires the utilisation of the GG premises and infrastructure, whoever may run it.
It may be that BA 'help' someone take over the GG business from the administrators (if it fails), but the people will never get BA contracts.