After shipwreck, concerns Costa wants to cut Italy ties

AP News
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Posted: Feb 13, 2015 12:35 PM
After shipwreck, concerns Costa wants to cut Italy ties

MILAN (AP) — Italian cruise company Costa Crociere is facing a public relations battle over its future in Italy amid concerns the company wants to distance itself from the country after the deadly 2012 shipwreck of the Costa Concordia.

Costa, which is owned by U.S. company Carnival, has been based in the Italian port city of Genoa since 1854, but its CEO Michael Thamm has announced some operations will move abroad, to Germany.

While analysts say it is probably meant to cut costs, politicians and unions in Italy are worried it may be an attempt to sever the company's links with the country where it suffered the shipwreck that cost 32 lives. Former captain Francesco Schettino was this week handed a 16-year sentence for the deaths.

Thamm, a German, was summoned to Rome after Costa announced last month plans to consolidate some Costa operations in the port city of Genoa with its subsidiary AIDA in Hamburg, Germany. Unions protested that the move would involve the transfer of four departments with about 160 people from its Genoa headquarters.

The CEO met Friday with Italy's transport minister to offer assurances that the cruise company has no broader plans to move the headquarters out of Italy.

After the meeting, Thamm reassured the Italian government that "Italy remains a market with a huge potential." Transport Minister Maurizio Lupi said Costa would present to the government an industrial plan that confirms Genoa as a strategic asset.

As the CEO visited Rome, Costa union members protested the announced transfers in Genoa, saying they will weaken the company's Italian identity.

"What worries us is that they are transferring the heart of the company to another country, and that will lead to a progressive emptying out of headquarters," Mauro Scognamillo, leader of the Fit-Cisl union, said by phone from Genoa.

He said the departments to be transferred include the office that recruits maritime workers on board, including captains and engineers, meaning future crews "will be selected from a German pool, instead of an Italian pool."

The move, announced at the end of January, became fodder for later arguments in Schettino's trial, with lawyers for the defense and civil plaintiffs citing it as an indication that Costa's safety performance was not what it should have been.

They cited alleged comments by Thamm to employees when he announced the transfers, and reported by newspapers in Genoa and cited by the unions, that the Concordia disaster was "the child of a culture to eradicate." A spokesman for Costa Crociere SpA refused to comment on the remarks, saying it was from a private meeting.

Union leader Scognamillo said the move could be a form of internal "cleanup" three years after the disaster.

Analysts say Costa's decision to concentrate some operations in Hamburg is an overdue consolidation to improve efficiency.

While competing cruise companies have consolidated offices, parent company Carnival often replicates its functions across its cruise brands, said Bob Levinstein, CEO of CruiseCompete.com.

"They in the past have not done a lot of moves to consolidate and take advantage of economies of scale. My guess is they are starting to take a look at these redundancies across lines," Levinstein said.

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AP reporter Frances D'Emilio in Rome contributed to this report.