BC Ferries CEO David Hahn yesterday announced a series of cost-cutting measures aimed at improving the company’s bottom line, including his own early retirement.
Hahn plans to retire at the end of the year – 12 months of when his contract is due to expire.
BC Ferries traffic is down significantly and in its first quarter report, the company anticipated a year-end loss to be in excess of $20 million for the fiscal year.
As a result, Hahn stated he conducted an extensive review of the company’s operating and capital costs and implemented a major cost-containment effort.
His decision to retire was not an easy one, Hahn said in a press release.
“This has not been an easy decision, but it will help facilitate a more constructive dialogue around future service levels and funding.
“I want to be clear on one thing. It’s my choice to retire and it is on my terms that I’m leaving. I believe it to be in the best interests of the organization, otherwise I would have never considered it.”
BC Ferries cost saving initiatives include:
- a hiring freeze of all non essential positions;
- wage and salary freeze for next two years;
- select early retirements;
- reductions in executive compensation through elimination of the long term
incentive plan;
- cancellation of discretionary expenses;
- reduced use of outside contractors and consultants;
- elimination of many charitable and community donations;
- cancellation of Vancouver Canucks partnership;
- an 18-month delay in select capital expenditures; and
- application to provincial government for cancellation of up to 400 round trips per annum (major routes only).
In speaking to the announcement, BC Ferries’ board chairman Donald Hayes said, “As Mr. Hahn’s decision to retire was voluntary it triggered no severance payments.
“Under Mr. Hahn’s leadership, BC Ferries has been fundamentallytransformed, resulting in improvements in all areas of the company’s business. Seven new ships have been brought into service on-time and on-budget, upgrades have been made at many of our major and minor terminals, and significant improvements have been made in the travel experience for our customers.”
The board stated that it has a succession plan in place and expects to make an announcement on a successor some time after its next scheduled meeting in November.
Jennifer Harrison
Twitter: JHarrisonBIV