OK, now we’re in trouble!
The Telegraph reports that Theme park operator Euro Disney is expected to breach its debt covenants for the next three years. Euro Disney runs the Disneyland Paris resort on the outskirts of Paris and it has been battered by the downturn as more holidaymakers have stayed at home and the pound has reached record lows against the euro. Euro Disney still has €1.9bn (£1.6bn) of the debt used to fund the park’s construction on its books. The company made a €26.4m operating profit on revenue of €1.2bn in the year ending September 30 2009 but paying €89.2m of financial charges on the debt left it with a €63m net loss.
The outlook is not improving. Attendance plummeted 8% to 6.5m visitors in the six months to the end of March 2010. Revenues for the period decreased 7% to €519m and Euro Disney’s net loss soared by €29m to €114m despite heavy cost-cutting. In December 2009, at one of the busiest times of the year, staff went on strike as part of a protest over a pay freeze. Since then, two Euro Disney employees have committed suicide. One was a chef who wrote on a suicide note that he did “not want to return to working for Mickey” and his relatives claimed he was depressed by staff cuts and a policy switch away from freshly-made food to frozen produce.
The other employee was also a cook who killed himself after what a trade union insists was “humiliating” treatment at work. The official Euro Disney management-employee delegate committee agreed earlier this month to conduct a social audit of working conditions and worker satisfaction. According to a union, the number of jobs in Euro Disney’s restaurants and hotels has been slashed and fewer seasonal workers are being hired. It has led to staff working longer hours and culminated in the union with the widest support at Euro Disney recently writing a scathing open letter to the company’s chief executive, Philippe Gas, which reportedly urged him to “wake up” and added that “Prozac factories will never go bankrupt given the incalculable number of your employees who use their products”.
We talked about the AAPL factory suicides last week and I have warned you and warned you and warned you that this is how revolutions begin. The corporations react to a downturn by squeezing the already-stressed workers to protect their profits and the souless Wall…
