PKP Cargo on restructuring paths – Puls Biznesu

The Board of Directors of PKP Cargo has taken several restructuring decisions, for example, regarding the discontinuation of some employees, with the aim of reducing costs and improving the financial position of the Group. What other corrective actions are you planning in the near future?

Marcin Wojciudka, Acting President of PKP Cargo, Supervisory Board Member: effective. But we will not reveal it before sending the announcement to the stock exchange. Our plan is flexible, but we cannot influence all decisions. Information we provided on May 10 [komunikat o planowanym skierowaniu od czerwca 30 proc. załogi na tzw. nieświadczenie pracy – red.] We were only supposed to submit it on May 20th. We had to act early because we detected periodic financial difficulties occurring earlier than we originally expected, i.e. a reason to implement the inaction mechanism. We have also taken other measures and are preparing for further measures, the aim of which is to effectively reform the company.

I recently said, among other things: Employee Guarantee Charter. Will mass layoffs follow?

Marcin Fujiwodka: The employee guarantee agreement was concluded in September 2013 in connection with the company’s entry into the stock exchange. I was a co-author of it. The document was created in difficult circumstances. It offered 10-year employment guarantees to some employees, but they expired last year. It also included a commitment to negotiate annual increases. The agreement served its purpose. In the current state of the company, its provisions can no longer be applied.

Monica Starica, Acting Board Member for Finance, Member Supervision platform: Any termination of employee contracts will be subject to analysis. We will certainly not make hasty decisions on this issue. We keep our finger on the pulse.

Marcin Fujiwodka: In the near future – interview on May 20, 2024 – we are not planning any mass layoffs. However, we are willing to make difficult decisions if they are necessary to improve the company’s position.

Return to the decision not to provide work: Trade unions responded to this proposal with skepticism, to say the least…

Marcin Fujiwodka: Article 54 of the PKP Marketing and Restructuring Act of 2000. [dotyczący nieświadczenia pracy – red.] It only applies to a small number of entities, including: BKB Shipping. The legislator did not grant trade unions any role in this institution. However, after identifying periodic financial difficulties – and implementing the social dialogue announced in meetings with trade unions – on 10 May, the employer put forward a proposal to consult with employee organisations. He didn’t have to do this. Union organizations have been asked to submit their own non-work proposals by May 23. For example, they have already suggested that it should not include husband and wife at the same time – and we will take this suggestion into consideration. Trade unions have also suggested that we consider ordering employees at all levels and occupational groups not to work. I heard that a member of our company’s supervisory board might benefit from this solution. In the case of board members, the supervisory board is the one who decides, so we asked it to decide. A meeting with trade unions is scheduled for May 29, during which we will explain the non-work rules. It has already been used at PKP Cargo in 2008 and 2015, so union organizations know well what this entails. It is a flexible and less intrusive mechanism for employees, allowing management to restructure costs. An employee earns about PLN 8,000. Total PLN, without having to work, will receive 4.8 thousand PLN. Total Polish Zloty.

Leszek Mitic, head of the railway drivers’ trade union, wants train drivers to be exempt from the ban on working for competitors during the downtime. Will the Board of Directors approve this proposal?

Marcin Fujiwodka: If Leszek Mitic wants to fire train drivers, that’s his business. The new board of directors of PKP CARGO has no such plans. When not working for PKP Cargo, the employee should not be working for a competitor. Train drivers are a valuable human resource. Their action in competition will weaken our position in the market. We will not force anyone to work. If someone prefers to work in the private sector, you have the freedom to do so, but I am convinced that whoever leaves PKP for shipping will regret it after some time.

Trade unions attribute the matter to PKP Cargo’s difficult financial situation The company was appointed by the previous government to transport coal and the resulting resignation from other contracts. What does management think about this?

Monica Starica: We are in the stage of identifying the reasons for the current situation. Someone caused it, someone made certain political commitments. We are not here to hunt witches, but we will point out any violations that may indicate behavior that is harmful to the company and employees. After all, someone decided to withdraw the coal cars from the service contracts concluded by PKP Cargo and transfer them to the transport services ordered by Prime Minister Morawiecki. Recognize the need for PKP Cargo to implement strategic activities, which the company has been encouraged/forced to implement – delete as appropriate. However, the administration at that time should have protected its interests. We will not implement such a political matter without securing the company’s interests.

Marcin Fujiwodka: Trade union representatives have to rub their heads with ashes, because employee organizations, at least some of them, were de facto involved in decision-making about what was happening in the company. It is worth noting, for example, the case of the sale of locomotives by PKP Cargo, which the company then leased under leaseback. This process was aimed at financial restructuring, but the funds obtained were used to increase salaries. Family silver sold. It is better for unions to refrain from issuing judgments, because they were beneficiaries of previous board decisions.

Trade unions also talk about the need to obtain compensation from the state treasury for transporting coal after the outbreak of war in Ukraine. Did the previous administration make an official request for this?

Marcin Fujiwodka: We are investigating this matter and cannot comment on it at this time.

Does the current administration plan to apply for compensation?

Monica Starica: Legal and economic analyzes are underway, we are checking whether we have a chance and whether we can prove that the company is entitled to it.

What are the priorities regarding PKP Cargo’s operational activities? Will you focus on fighting for coal transportation contracts, or do you plan to regain your stakes in the intermodal segment, etc.?

Marcin Fujiwodka: There was a decline in transportation throughout Europe. PKP Cargo – due to bad decisions made by the previous government and the Board of Directors – has more work to do compared to other transport companies. You need to rebuild the trust of customers that the company has abandoned and acquire new ones. We need to convince them that we are capable of serving contracts on time and to a high level of quality. We hope that after announcing the competition that will be planned soon, the Supervisory Board will select a member of the Board of Directors who will change the sales policy.

Monica Starica: We should focus on synergies between group companies. Due to the size of the group, PKP Cargo can handle a higher volume of cargo than any other transport company in Poland. However, decision-making processes are bureaucratic, making it difficult for us to work efficiently. Given our knowledge of the industry, we must think about problems that even the customers themselves would not care about, and propose logistical and business solutions that are beneficial to both parties.

Does strengthening the company in the sales sector mean the need to train existing employees, or are you also thinking about hiring new employees?

Marcin Fujiwodka: These decisions are still before us. Our staff includes people focused on working with clients. We will not reveal ideas to improve sales, I can only say that we have to rely on two pillars – working within the team we have, but also introducing new faces to the company.

PKP Cargo also has a large real estate portfolio, including: leased from the PKP Group. What are the company’s plans to reduce development costs?

Marcin Fujiwodka: Real estate is an important asset for the company, but changes related to its management will only bring results within many months, and we need to save now. However, we are of course already carrying out work related to real estate restructuring. Zenon Kuzindra, a member of the board of directors on behalf of the crew, is in charge of this. One of the first actions will likely be to withdraw from the property where the company is headquartered in Katowice. The annual cost of renting it from an entity outside the PKP group is several million zlotys. We are planning to move our mission to southern Poland from the headquarters in Katowice to our other facility. Analyzes are ongoing.

Monica Starica: We need to conduct an inventory of the property. This is a difficult and time-consuming process, and after conducting analyses, we will have to decide to resign from some properties and hold talks about this with PKP Group and other contractors.

Trade unions are also calling for action on unused rolling stock on PKP Polskie Linie Kolejowe routes, and PKP Cargo is paying for access to this infrastructure. What are the management plans regarding rolling stock?

Marcin Fujiwodka: The problem is not only related to the costs of storing them. According to the technical documentation, it should undergo renovations. We still need to determine how many carts will undergo regular inspection and how many will be sold or disposed of. The previous administration spent money on refurbishing rolling stock that was not working.

Monica Starica: Some old rolling stock must undergo periodic inspections, so-called P4 and P5, we cannot give them away. However, we must reduce it to the necessary minimum and adapt it to the current transportation business, which has declined in recent years.