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• Monthly review: Hangars, Halifax, Harrington, Hughes & Hughes…

  March 1, 2010 @ 3:04 pm | by Laura Slattery

  Contrary to any bus-panel ads for movies you may have seen, it is not in fact a leap year, and so we have hurtled to the end of February and the second Current Account monthly round-up with all the impatience of a hangar-craving airline boss. Yes, this month’s news review is brought to you by the letter “H”. 

  If there was one story that rumbled on longer than the now-you-see-him-now-you-don’t Dáil departure of George Lee, it was the spat-by-press-release between Ryanair supremo Michael O’Leary and the Minister for Enterprise, Trade and Employment, Mary Coughlan. Like a jilted lover sulking at (perceived) bad treatment, O’Leary made a loud show of refusing to speak directly to the Dublin Airport Authority. Could 300 jobs really be created at Hangar 6 if the Government acted as an intermediary in their dysfunctional relationship? Amid all the smoke, mirrors and Dail committees, it appeared little had been achieved save frenzied points-scoring.

  February was a pivotal month for the banjaxed banking sector and not in a way that warmed anyone’s hearts. Five years after it bought a chain of 52 ESB shops in a bid to establish a high street presence, Bank of Scotland (Ireland) announced that it would be closing down both its Halifax retail business and its intermediary business, which over a decade ago had spurred so much margin-slashing competition in the Irish mortgage market. It was so long to Saturday opening hours and – more seriously – goodbye to 750 jobs.

  Bank of Scotland (Ireland)’s legacy in Ireland is its spearheading of a new generation of home loan products. We should thank them for the tracker mortgages and cough politely at the slippery slope of interest-only loans as they depart. It’s a great deal more difficult to say what the legacy of Postbank has been, as its launch rather unfortunately coincided with the advent of the credit crunch. It followed in Halifax’s footsteps by announcing its closure, leaving 260 jobs at risk.

  Sticking with the heady financial world, taxpayers were obliged to take a 15.7 per cent equity stake in Bank of Ireland, which in the new era of commercial austerity decided to end its sponsorship of Irish golfer Pádraig Harrington. Happily, Harrington’s website lists a further 11 sponsors, so he’s not going to have to fork out for his own collared T-shirts just yet.

  Finally, there was a sad plot twist for the book trade when Hughes & Hughes went into receivership. The chain’s management blamed a testing trinity of intransigent landlords, Amazon and a collapse in passenger numbers at Dublin and Cork airports for its woes. The Simpsons used to feature an airport book store that went by the name Just-Crichton-and-King. Hughes & Hughes had aspired to be more than that. But its ambition was matched by bad timing: industry observers pointed out that expanding into a recession is never going to be a bestselling move.

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• Monthly review: what we learned in January

  February 1, 2010 @ 12:25 pm | by Laura Slattery

  So it’s one down, 11 to go, quicker than you can say “detoxing is stupid”. But what the hell was January all about? Current Account will kick off the first of its monthly reviews in what seems like appropriate fashion: with some ever-so-slightly-dodgy statistics. And no, I’m not talking about Ireland’s GDP.

  The year began with almost as many guesstimates about how much the snow was costing the economy as there were news articles about whether or not Brian Lenihan was doing the right thing staying on as Minister for Finance. The Dublin Chamber of Commerce reckoned the mini ice-age was costing €40 million for each hour of lost productivity in the capital, which seemed like a lot when the UK’s business sector reckoned the standstill there cost its entire economy £600 million for a full day. Manufacturing slumped, but plumbing became a hot business to be in: Minister for Snow John Gormley couldn’t unfreeze all those pipes single-handedly.

  When is insider trading not insider trading? When it’s an honest mistake. Story of the month in the Irish business world was the publication of the final report of High Court Inspector Bill Shipsey SC into contentious share dealings by DCC and its erstwhile chief executive Jim Flavin – a story now so old that it predates not only the banking crisis but the bursting of the dotcom bubble too. Flavin’s sale of shares in Fyffes worth €106 million in February 2000 was an “error in judgment“, Shipsey said, because Flavin “genuinely believed he was not in possession of price-sensitive information” when he dealt the shares – a defence that will no doubt be very popular in the years ahead.

  The prescience of Flavin’s assessment of Fyffes’ doomed involvement in a venture known as worldoffruit.com – not a domain name that has rocked the world - suggests he should really be sitting on one if not all of the Government’s many technology and innovation boards. I’m sure they could squeeze him in if a few people just shift up a bit.

  “Once City boys make up their mind there’s not a lot you can do,” was how Unite officer Jennie Formby summed up the sale of Cadbury to the American cheesemaker Kraft, a transaction that seemed to offer many short-term cash benefits for the bankers, solicitors and executives involved, but very few for Cadbury’s workers, consumers and the long-term health of the British economy, which eventually emerged from recession. The most common what-if (or counterfactual as what-ifs are known in jargonland) was what if, you know, the government had legislation to prevent such potentially damaging international takeovers – such as France’s “Danone Law”?

  And, so, to personal finance. Want to SELL YOUR UNWANTED GOLD by sticking it in an envelope and posting it off to CASH-4-GOLD et al? Good luck with that – the UK’s Office of Fair Trading, headed by the Ryanair-baiting John Fingleton – began an investigation into whether such services are as consumer-friendly that they claim to be, or simply a spur for more home burglaries.

  And finally… what a turnaround for the global motor industry. It began last year by gifting the world with seas of unnecessarily wheeled metal cuboids, which fanned out from the globe’s seaports in colourful testament to the tragic fluctuations of supply and demand. The last thing anybody wanted was a new car. This year, however, the industry has made a delightful U-turn from over-producing unwanted vehicles to recalling wanted ones. Toyota led the charge by recalling almost 8 million cars due to faulty accelerator pedals and ill-fitting floor mats, Honda chipped in by asking for more than half a million cars back due to a fire risk and Peugeot completed the trinity by recalling around 100,000 vehicles made in a plant co-owned by Toyota.

  Ireland is, of course, technically out of recession - although for some reason I can’t quite put my finger on, I keep forgetting that. In any case, I doubt I’m alone in wanting to step on 2010′s faulty accelerator pedal and speed headlong into less perilous times. Until next month…

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