Preussag deal means Gurassa is here to stay

Analysis

Preussag deal means Gurassa is here to stay

Gurassa’s decision to remain with Thomson after the Preussag merger has surprised many. Steve Jones reports

BEFORE the ink had dried on the £1.8 billion deal which saw Thomson fall into German hands, Charles Gurassa was widely expected to have grabbed his considerable cash bonus and left town.

After netting a one-off payment of £1.3 million for orchestrating the sale to Preussag, it was thought Gurassa would move to pastures new, keen to control the destiny of a company rather than be governed by distant boardroom decisions.

So news that the Thomson chief executive has signed a two-year deal to remain with the company took many in the industry by surprise.

Central to Gurassa’s decision appears to have been the offer by Preussag chairman Dr Michael Frenzel of a place on the board in Hanover and a pledge of a partnership approach with Thomson.

“I have been surprised and encouraged by the fact they want a partnership,” said Gurassa. “It is about Thomson and TUI (tour operating arm of Preussag) working together, not one company taking over another.

“Culturally, the companies are also an excellent fit and have a similar attitudes.”

Gurassa said some of the key decisions over the future structure of the company were made in just two-and-a-half hours, which illustrated the like-mindedness of both Thomson and TUI.

He added he “is not one to flit around from job to job” and wanted to complete the task of turning round the fortunes of Thomson. It is also clear Gurassa has been instrumental in shaping the future of not only Thomson, but also TUI.

“I sat down with Preussag and said we needed to move quickly and decisively,” said Gurassa. “They agreed and a series of working groups were set up to look at the structure of the company.

“We said they had 30 days to look at the two businesses and tell us what the future is going to look like. We needed to get on with it.”

He said potential efficiencies are lost unless wheels are quickly set in motion, adding it was important not to become bogged down with parochialism or turf wars.

“Anyone who has been involved in a major merger knows this does happen,” said Gurassa.

The result of the month-long analysis will be the integration of five key departments. These are aviation, contracting, hotels, Information Technology and marketing.

Gurassa will take control of aviation, largely because of his background with British Airways, and marketing.

TUI executive board chairman Dr Ralf Corsten will be taking charge of the three other departments.

Gurassa admitted there will inevitably be “winners and losers” but refused to be drawn on job losses.

However, the operator’s Richmond-based strategic development department, which was headed by John Wells, has already fallen victim to the operator’s widespread restructure.

Wells will leave the company at the end of January with his 25-strong team “reallocated” across the group.

Sources said further significant fallout was expected.

“There are a lot of nervous people in Greater London House,” said a source.

“If they are merging departments job losses are an inevitable consequence.”

Gurassa said staff will be consulted and the changes implemented over the next 60 days. “The five areas we are focusing on will bring enormous benefits and efficiencies to the group,” he said.

Gurassa stressed, however, that amid the upheaval, the brands must remain discreet in their national markets.

“Preussag has also got huge ambitions and funding and we are keen to get into new markets,” he continued.

And it has already signalled its intention to increase its tourism business further by selling off more of its non-travel division.

Gurassa: was encouraged by the fact that Preussag wanted to take a partnership approach with Thomson

Building the right team

THOMSONchief executive Charles Gurassa will need all his negotiating skill as he attempts to persuade Airtours to release UKLGchief executive Peter Rothwell early from his contract.

Rothwell will rejoin the company he left in 1995 as chief operating officer – but may not be able to take the role until 2002. Under the terms of his contract, Rothwell is barred from joining another company for a year. But that rises to two years if, as in this case, his new employer is a rival.

Rothwell was escorted off the premises immediately after handing in his notice at Airtours as he holds commercially sensitive information.

Airtours currently has no plans to replace him.

“We will conduct private discussions with Airtours and will hopefully come up with a sensible solution,” said Gurassa.

“I have publicly stated that we needed a quality tour operator. He has extensive tour operating experience and knowledge of the European market. Rothwell is what I describe as a European rather than a little Englander.”

Rothwell: described as a quality tour operator