Earlier today amid the general gloom of Europe's sliding non-manufacturing PMIs, the one place that stood out like a sore thumb bucking the deteriorating trend, was France which not only posted an increase from August but also beat expectations.
We strongly doubt this metric has any basis in reality because among numerous other contrary-specific factors, Bloomberg reported that as part of Air France’s long-running spat with workers over cost cuts, violence erupted earlier today as protesters stormed a meeting where managers were presenting plans for 2,900 jobs cuts, causing executives to flee with their clothes in tatters.
According to the report, human resources chief Xavier Broseta and Pierre Plissonnier, the head of long-haul flights, scaled an eight-foot high fence to escape, shielded by security guards, with Broseta emerging shirtless and Plissonnier with his suit shredded.
Casting some serious doubt on the service PMI "recovery" is that the attacks happened Monday as Air France told its works council that after the failure of productivity talks with pilots last week some 300 cockpit crew, 900 flight attendants and 1,700 ground staff might have to go. The cuts could include the first forced dismissals since the 1990s, according to the carrier, which subsequently postponed the meeting.
The company, unhappy with the terrible publicity that the photos and video clips presented below will unveil about the corporate culture at Air France, promptly tried to downplay the incident, saying in a statement that "these attacks were made by isolated and particularly violent individuals as the demonstration by personnel on strike was going on calmly," adding that a complaint had been filed for aggravated violence. We expect many more complains will be filed before the latest surge in anger at the upcoming layoffs dissipates.
It's not just bad news for up to 3,000 soon to be unemployed workers but for Boeing too, which may be about to see the first scrapping of Dreamliner orders:
Under the savings plan announced today, Air France’s fleet would be reduced by 14 jets, with orders for Boeing Co. 787s scrapped and aging Airbus Group SE A340s phased out. The Air France-KLM Group unit indicated there was scope for compromise should unions come forward with serious savings measure.
Air France said last week it was planning cuts to jobs, jets and routes in the absence of a deal with pilots, who had been asked to work more hours for the same pay to help end annual losses that began in 2011. Government ministers had urged the sides to continue talking so that jobs could be saved.
The upcoming layoffs were once again blamed almost entirely on events in Asia: "The changes would require a shrinking of Air France’s network, with a reduction in frequencies and more sweeping seasonal capacity cuts next year, following by the termination of some routes in 2017, especially to Asia, where competition is toughest. Frequencies to 22 destinations would be affected."
Expect more outbursts of violence and even more profits for tailors in Paris, confirming the Keynesian "torn suit fallacy", because the job cuts are said to be implemented around mid-December at the earliest, or just in time for the holidays.
Meanwhile, this is the outcome as the anger of several thousand French workers finally spills over.
And roll the tape: