Eurostar CEO promotion could be in jeopardy in wake of snowstorm handling
LONDON (Bloomberg) - Eurostar Group Ltd. CEO Richard Brown's promotion to chairman may be in jeopardy after criticism of the way he handled a snowstorm that crippled locomotives and left more than 40,000 passengers stranded.
Mr. Brown, 56, is slated to become chairman next year, taking over from Guillaume Pepy, head of French state railway SNCF, Eurostar's majority shareholder. The move is less likely now after President Nicolas Sarkozy intervened and ordered Eurostar to get trains running again before the holidays, analysts and transportation specialists from both London and Paris said.
"Eurostar's image has been tarnished, and while the traffic will return, it could be more difficult for the CEO," said Yan Derocles, an analyst at Oddo Securities in the French capital. "The way he handled the crisis wasn't great, and we saw how the governments jumped in. It won't help his career."
Eurostar resumed limited operations on December 22 after a three-day shutdown that began when electrical systems were shorted by melting snow that had been sucked into train air intakes. About 2,000 people were stuck in the Channel Tunnel, with tens of thousands left at stations in London, Paris and Brussels.
While the company has shifted the backlog of customers from the weekend, people checking in at London's St. Pancras station today met with hour-long queues stretching into the street after a last-minute surge in travel, spokeswoman Mary Walsh said by phone. The system shut at 6 p.m. on Thursday and was due to reopen on Saturday.
"When the French president calls Pepy and lambastes him I don't think you can go ahead and promote his CEO to chairman," said Christian Wolmar, author of 'Broken Rails', a history of Britain's railways. "Brown's performance has not been good and it hasn't been perceived to be good. I expect this particular succession plan to quietly go away."
Mr. Brown is a "very committed" CEO and is behind getting things back to normal, said Richard Holligan, a London-based Eurostar spokesman. He would not comment on Mr. Brown's future. Eurostar chief operating officer Nicolas Petrovic is due to take over from Mr. Brown as CEO, the company said in August.
The changeover, announced on August 19, will be decided by SNCF because of its 55 percent holding, Mr. Wolmar said. Eurostar UK Ltd. has a 40 percent stake and Belgian state railway SNCB holds five percent. A spokesman for SNCF said he could not comment on whether the succession plan might be redrawn.
Mr. Brown, a 30-year veteran of the rail industry, joined Eurostar in 2002 after working in roles including head of trains and commercial director at National Express Group plc. He has also served as chairman of the Association of Train Operating Companies, representing more than a dozen UK rail companies.