by Bob Goulooze
In order to create economies of scale, national airline companies are looking for partners, preferably equal ones, but certainly ones that may complement the current services of the flag carrier. In 2004, Air France (AF) merged with KLM and troubles have arisen since then. AF is the biggest partner in the joint venture with KLM and claimed the lead from day one. Those who are familiar with the way the French work couldn’t believe in the first place that this would be a match made in heaven. The French have the patronage system, which is a social unequal relationship between a powerful and less powerful partner. The powerful ‘patron’ renders favors to the subservient one in return for services, adherence, and homage. You don’t have to be culturally savvy to understand that such a patronage relationship is so un-Dutch, at least being at the receiving end. The Dutch have a more equal culture in which reaching consensus is the bottom line.
In the past 15 years, AF tried to establish this patronage relationship with KLM personnel and management. The Dutch are pragmatic people and are able to adapt to a new slightly unequal relationship until the limit has been reached. Then they straighten their backs and say: ‘no’. The French have been acting like the patrons they always were. However, if you can’t be better than your subservient partner, you ought to ask yourself whether you are doing the right things. Last year AF personnel wanted to lynch its director. His shirt was ripped off his body and jumping across a fence saved the man’s life. It seems AF pilots are always on strike, their ground personnel too. No wonder the financial results of AF are disastrous. So, in order to compensate for their losses, AF intends to steal €millions from its small Dutch counterpart KLM.
How many successful Dutch – French enterprises do we know of? I know of two joint ventures: 1. a former Philips computer company and 2. a large Dutch Communications group. I spoke to the managers of both companies and they were unanimously in their dislike of French management. ‘Rats and bastards’ were the most decent qualifications of the Dutch management about their French colleagues. Needless to say that those are not thriving, successful companies.
So in this AF-KLM joint-venture, the Dutch have been kept at arm’s length as far as information sharing is concerned. The Dutch were highly surprised to learn that 10% of shares of AF-KLM were offered and accepted by Delta and China Eastern Airlines. Now the Dutch government has taken a 14% share in the AF-KLM holding company, enabling her to exercise some voting power, should this be necessary for the near future. And now the patronizing French are angry whilst they’re getting a taste of their own medicine.
The most important decisions in life are based on gut feelings while the most unimportant ones are based upon calculations. My gut feeling says this was the wrong combination in the first place. So, it is quite understandable that the Dutch government, having learned its patronage lesson well, has secured a pre-emptive voting block participation in the holding company. It is a mere cultural warning that the French should abort their patronage system, at least in doing international business. If the French patronage culture continues to dominate the relationship between Air France and KLM, it won’t be too much of a prediction that sooner rather than later, this company will cease to exist.
The author, Bob G. Goulooze, is an independent communication expert and innovator.
