The former chief executive of Thomas Cook claimed yesterday that the travel group could have avoided collapse if the board had given her time to complete her turnaround plan.
Harriet Green, who was sacked in November 2014 after 28 months, said that she had left less than halfway through a six-year programme to cut the company’s debt, boost efficiency and build its digital capability.
“I firmly believe that all of those actions, if allowed to continue, would have positioned Thomas Cook very viably for the future. But I was not able to complete that work,” she said.
Thomas Cook, founded in 1841, was one of the world’s largest holiday businesses, with 21,000 employees in 16 countries, including 9,000 in Britain, and 22 million customers a year. At the time of its failure last month, it had a balance sheet deficit of more than £3 billion, including £1.9 billion of debt.
Ms Green, 57, who was appearing before the Commons’ business select committee, which is examining the collapse, admitted for the first time that disagreements with Frank Meysman, its chairman, had played a part in her sudden exit.
She told MPs that her dismissal had come as a surprise, taking place on the second day of year-end board meetings. She said that she had been “summoned” by Mr Meysman: “I was told ‘you’ve done a great job, started the transformation, thank you, but we would like somebody now who is a traditional travel person to take this business forward’.
“I was basically being told your services are no longer required and we wish to return to a more traditional travel leadership.”
Asked by Peter Kyle, a Labour MP, whether there had been friction between her and Mr Meysman, Ms Green said: “Certainly, the board and I had disagreements around the level of assets and the rate and pace of the digital transformation.”
Mr Kyle asked her: “How did you feel when the plan you had put in place started to be unpicked?” Ms Green replied: “Incredibly frustrated and sad.” She blamed Thomas Cook’s failure on its slowness in developing a digital capability.
During her tenure, Ms Green, now head of IBM Asia Pacific, cut £500 million of costs, partly through 2,500 job losses, and, despite her exit, she won plaudits for restoring Thomas Cook’s fortunes, including winning a National Business Award for her work at Thomas Cook in 2013, boosting its value from about £150 million to almost £2 billion and refinancing its debt.
She earned about £4.7 million during her spell with the group. Thomas Cook also paid about £80,000 a year towards her travel and hotel bills, including regular stays at Brown’s hotel in Mayfair, central London, although she rejected suggestions that her spending had been extravagant.
Ms Green said that she had spent Mondays to Thursdays away from home in a “24-hour type of role”.
She added: “In my second year I reduced my expenses by a third and returned my car allowance. I earned less than the male chief executives before me and than my successor.”
Manny Fontenla-Novoa, 65, who was dismissed as chief executive of Thomas Cook in 2011 after issuing three profit warnings, also appeared before the committee. The Spanish-born travel industry veteran, who was paid £17.2 million over eight years in the role, rejected claims that his purchase of Mytravel and the Co-op’s travel agencies had saddled Thomas Cook with too much debt and had contributed to its demise. Asked if he regretted his decisions, Mr Fontenla-Novoa said: “Of course I regret things. Did I make mistakes? I’ve no doubt about that. But I honestly, genuinely believe the merger with Mytravel was the right decision.
“Harriet did a very good job in restoring confidence in Thomas Cook and rebuilding the share price, but I fundamentally disagree with her on the structure of the travel industry. I think there’s still a place for traditional package holidays.”
Rachel Reeves, Labour chairwoman of the committee, told him: “A little bit more humility and introspection about what went on would not go amiss.”