Lord Sterling's very survival on the poop-deck was in question. But he is nothing if not a fighter and by merging the cross-Channel ferry and container businesses, floating Bovis Homes and selling off pounds 500m of property, Lord Sterling slowly restored the P&O balance sheet and his own reputation.
Now with the decision to trim back further to just three core divisions of cruises, ferries and ports, P&O will be more or less back where it started 160 years ago as a pure shipping group. Moreover, for the first time since he backed his Town & City group into P&O in the early 1980s, Lord Sterling will be bereft of any property interests to run.
This latest restructuring, coupled with P&O's first dividend increase in nine years, went down well yesterday. And why not? The flotation of the construction arm Bovis, the sale of Earls Court Olympia, and the disposal of P&O's remaining property interests, should raise around pounds 2bn. Further down the track, there is the prospect of another pounds 300m from the flotation of P&O's share in P&O Nedlloyd.
As for the remaining core businesses, demographics and markets are moving in P&O's favour. When Lord Sterling refers to the growth in cruising he is not thinking of Sunset Boulevard but the expected doubling in the number of US citizens aged between 50 and 59 - the prime market for his Oriana and Aurora cruise ships.
On the downside, P&O will be focussed more firmly in cyclical markets. Meanwhile there is the constant threat of another cross-Channel price war and the danger that the rising cost of care for the elderly will put a dent in the spending power of P&O's core leisure market.
Still, Lord Sterling hardly needs to worry. His is 64 now and must surely be planning his own retirement cruise soon.