VR directors quit because of dispute over new passenger coaches

Ministers had sought to fast-track coach acquisitions to safeguard Transtech jobs

Henri Kuitunen

Antti Lagerroos

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The government’s plans to speed up equipment purchases by Finnish Railways (VR) on regional policy grounds have caused a dramatic upheaval in the VR leadership.
      The President and CEO of VR-Group Henri Kuitunen and the group’s Chairman of the Board Antti Lagerroos both announced unexpectedly on Tuesday that they would resign their posts.
      Behind the decision was the desire by the owner of VR, the state, to advance the renewal process of VR’s blue passenger coaches in order to secure jobs in the eastern province of Kainuu.
      The company management, in turn, would have preferred to proceed according to the schedule that they had drawn up.
     
The dispute ended with the defeat of the VR leadership.
      According to Minister of Defence Jyri Häkämies (Nat. Coalition), who is in charge of the government’s ownership steering, an announcement regarding the new schedule of the equipment procurement will be made in the next few days.
      Minister Häkämies and Minister of Transport Anu Vehviläinen (Centre) confirmed that the directors’ resignation announcements resulted from this difference in views.
      Chairman of the Board Antti Lagerroos’s resignation came into force immediately on Tuesday. President and CEO Henri Kuitunen will leave VR next spring.
      Häkämies considered the directors’ decisions regrettable. According to the minister, both men were doing a great job and enjoyed the state-owner’s full confidence and trust.
     
Kuitunen and Lagerroos, on the other hand, explained that their resignations did not come as a result of just one reason or incident.
      But both men also acknowledged that they were opposed to the idea of speeding up the equipment renewal process.
      The plan at VR was to start replace the existing blue passenger coaches from the year 2012 onwards.
      The Cabinet Committee on Economic Policy has nevertheless outlined that VR should speed up its acquisitions, in order that the operation of the Kainuu-based Transtech company, the manufacturer of the rail carriages, could be secured.
      According to Transport Minister Vehviläinen, the equipment should be renewed also for the sake of improved passenger comfort.
     
Closing down the factory - which is already suffering from thin order-books - would be a new blow to a province that is already suffering from the shutting down of the Kajaani paper mill and has been facing net migration outwards for years.
      The ministerial committee includes Matti Vanhanen (Centre), Jyrki Katainen (Nat. Coalition), Mauri Pekkarinen (Centre), Mari Kiviniemi (Centre), Stefan Wallin (Swedish People’s Party), Jyri Häkämies, Jan Vapaavuori (Nat. Coalition), and Tarja Cronberg (Green League).
     
In due course a bidding contest for the construction of the coaches is meant to be arranged. Transtech is the only railroad vehicle manufacturer in the Nordic Countries and is therefore a strong contestant to win the contract.
      Apparently also the plans to detach VR-Track Ltd and traffic control into separate companies of their own have also added to the friction between the state-owner and the VR leadership.
      Neither Lagerroos nor Kuitunen were eager to specify the reasons for their resignations.
      Both men said they made their decisions independently without pressure from the state owner.
      Lagerroos argued that the reason for him handing in his resignation was “the group board’s inadequate scope for influencing any important decisions regarding the company”.
     
In their Tuesday press statement both men confirmed that their relationship with many of the collaborative partners, such as Minister Häkämies, have been excellent.
      The Ministry of Transport and Communications and Minister Vehviläinen's name did not appear on their list.
      Kuitunen has been at the helm of VR since 1997, and joined the company some 20 years ago. Lagerroos is a relative newcomer by comparison, having taken over his position only this spring. He was previously CEO of the shipping line Finnlines.


Previously in HS International Edition:
  Domestic investor group buys Talgo´s Finnish railway wagon plant (30.3.2007)
  VR expects claims for compensation from inconvenienced rail travellers (10.10.2008)

Links:
  Finnish Railways, VR
  Transtech

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