AIR CREEBEC WAS alerted to many of its serious financial and managerial problems about a year and a half ago, when a consulting firm did a detailed analysis of the Cree airline.
The consultants’ report was prepared for CreeCo. President Abel Kitchen by the firm Raymond, Chabot, Martin,
Pare. A copy was obtained by The Nation.
The report said Air Creebec employees had a strong will to turn things around. “We believe a good majority of the management and employees of Air Creebec are dedicated to the success of the company and are disappointed when they are not given the opportunity to participate.”
But the report pinpointed many management problems at Air Creebec and listed some of the reasons why the airline was over $17 million in debt.
Here are some of the problems that had to be overcome to make this year’s profit:
• There seemed to be no planning for the mid-or long-term viability of the company. Snap decisions were made affecting the profitability of the company without any consideration of revenue or cost. “There is no clear understanding of the real mission of the company on a long-term basis,” said the report.
• The consultants said many employees felt the Crees would continue to bail out Air Creebec indefinitely, despite its losses. “From our observations, there is a limited number of management who are aware of the profitability of the company,” says the report.
• Air Creebec managers appeared to tolerate the presence of employees who were not motivated. Performance evaluations of employees were not done on regularly.
• The authors expressed concern about the lack of ethics in the way financial information about Air Creebec was disclosed to the company’s own Board of Directors. The report said the airline’s financial department had issued misleading information or neglected to disclose important financial information to the Board.
• There were too many managers for a company of Air Creebec’s size.
• The report said Air Creebec’s organization structure was too vague. There was no clear understanding of the mission of the company on a long-term basis. Managers needed precise job descriptions and who they should report to.
• Department managers were not asked for their input on decisions that affected their own department’s costs.
• Employee management meetings were not occurring on a regular quarterly basis.
• Employees interviewed did not understand or have knowledge of the roles of Air Creebec’s president and vice president.
• Departmental leadership continued to cause problems. Decision making lacked a systematic disciplined approach. Decisions which should have been made by departmental managers were allowed to be deferred to a higher level.
• The report suggested that Air Creebec’s president should take more of an active and visible role in the company.
• Also, the executive vice-president should inspire mangers to do well, said the report.