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Panalpina has the right people and right strategy to grow through own acquisitions and to stay independent.
February 5, 2019 - 01:50am CET - update
After the initial publication of the below open letter to the Ernst Göhner Foundation (majority shareholder of Panalpina) on Feb 2, 2019, more than 500 Panalpina employees and friends all over the world expressed their support and opinion. Over 70 comments were posted within hours which mirror the message to the shareholders better than the letter ever could; Panalpina shall pursue its own strategy and has deeply committed and loyal employees to succeed. On Feb 4, 2019, 7.20am CET, the foundation announced "that it doesn't support the current non-binding proposal from DSV and that it supports Panalpina's board of directors in pursuing an independent growth strategy that includes M&A". The 'vote for the letter' option on this site was therefore removed. The individual comments below will, however, remain for some time and serve as a testimonial of what Panalpina is all about.
February 2, 2019 - 11.15am CET - initial post
There hasn’t been a day since January 16, 2019 without press articles were published about DSV's offer to acquire Panalpina. The obvious consequence of such an acquisition would be laying off rather thousands than hundreds of Panalpina employees. Some of us have joined the company only a few weeks ago. Some of us have spent their entire professional life with Panalpina. The profits and dividends in all the years have been delivered by 14'000 employees who are fully committed to Panalpina. Panalpina has the right people and right strategy to grow through own acquisitions and to stay independent.
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Open Letter to the Ernst Göhner Foundation
Within 72hrs, over 500 Panalpina Colleagues have supported the Open Letter to the Ernst Göhner Foundation.
Open Letter to the Ernst Göhner Foundation / Majority Shareholder of Panalpina
DSV bid to buy Panalpina
Dear Ernst Göhner Foundation,
There hasn’t been a day since January 16, 2019 without press articles were published about DSV's offer to acquire Panalpina. Certainly countless meetings have taken place within the board of directors and the decision makers within the foundation, all supported by external advisors from different institutions to assess the offer. If an acquisition would indeed generate the expected value, by when, for whom and at what cost is pure speculation and obviously differently seen per stakeholder group.
As employees of Panalpina, who are in touch with our customers, suppliers, trading partners and colleagues throughout the global organization, we are nevertheless asking the Ernst Göhner Foundation to not just listen to those who have relentlessly criticized our performance or those looking just at numbers. Groups of people who have never spoken to a customer, don't understand the dynamics and where we actually stand in our transformation or who don't connect the dots, how events like the DoJ case in 2010 and the deterioration of the global oil & gas market have fundamentally affected our company in recent years.
Some of us have joined the company only a few weeks ago. Some of us have spent their entire professional life with Panalpina. As those who are most affected by a take over we are asking the foundation to consider:
The profits and dividends in all the years have been delivered by 14'000 employees who are fully committed to Panalpina and who have compensated some of the above mentioned events and market conditions with hard work, resilience and dedication. Employee engagement, measured formally for the last 3 years, has ever since increased and is the confirmation of committed and engaged staff. There is a very high degree of identity, spirit and loyalty across the entire company. The engagement & commitment of thousands of staff - something so difficult to build - would be fundamentally damaged and destroy one of the key assets of Panalpina: the passion to go the extra mile – for our customers, the company and thus also the Foundation.
Improving Panalpina's information technology and the underlying architecture has taken more efforts and longer than anticipated. However, contrary to some of our competitors who failed to replace core legacy systems (e.g. DHL) or who depend fully on external software providers (e.g. DSV) we have re-built the necessary internal expertise and are controlling our own destiny. We will succeed with our transport management system replacement in the next 2 years. The creation of our own software development centers in 2017 together with new investments into most recent technologies are the evidence of a radically changed IT strategy which will continue to deliver tangible benefits in 2019 and the years to come.
Taking over Panalpina's customer portfolio might appear simple on paper. Reality is, however, different. The service, process and system integrations we have with some of the largest multi-national-companies or customers in the Pharma, Retail & Fashion, High-Tech and Perishable industries are deep & complex. Experience shows that these companies have no tolerance for service degradation due to the take over and migration. Therefore it is not a question of ‘if’ there is customer attrition but at what scale.
There are countless examples where companies with good track records in acquisitions have underestimated the difficulty of integrating a too large company with a distinct DNA, history, industry and market position. The compatibility of Panalpina and DSV core values is highly questionable.
Will the foundation give in to an activist investor, likely orchestrating the recent events for months, who 'has lost patience'? Patience on what? The dividend pay outs in recent years?
Last but not least the obvious consequence of laying off rather thousands than hundreds of Panalpina employees and make an almost 100 year old Swiss company disappear, would be disgraceful if the DSV acquisition would become the largest take over failure in the forwarding and logistics industry. Panalpina has the right people and right strategy to grow through own acquisitions and to stay independent.