Inside The World Of Business
90 jobs at Waterford Crystal better than it might have been
NINETY MANUFACTURING jobs is a far cry from the 700-plus employed at Waterford Crystal when its parent Waterford Wedgwood went into in receivership last year and it’s an even longer way from the company’s heyday, when it employed 3,000 people.
However, it’s better than it might have been. When KPS, which owns Waterford’s new parent, WWRD, bought the assets of the troubled business last year, it purchased only the Waterford brand and its intellectual property; it did not want the manufacturing plant at Kilbarry on the city’s outskirts.
The firm indicated that it might be prepared to buy crystal manufactured in Waterford under licence, at the right price, if the local interests who were fighting to save manufacturing were able to come up with something.
WWRD is now working with those interests to the point where it is spending money on fitting out a new facility, much smaller than Kilbarry, which will manufacture premium crystal products and hopefully generate $20 million (€14 million) in sales. Largescale manufacturing is unlikely to return to Waterford, but WWRD’s proposals at least show that crystal can still generate business and jobs in the city.
The way forward lies in concentrating on manufacturing premium products that require high levels of design and craftsmanship, and equally, if not more important, the sales that can be generated in the visitors’ centre, which has an obvious spin off for the region’s tourist business.
No escaping cost of Nama
THE EUROPEAN Commission is taking plenty of interest in the National Asset Management Agency (Nama). Fine Gael Senator Eugene Regan met four officials from the commission’s competition directorate in Brussels yesterday to outline the party’s complaint about the bad loans’ agency. It said the Department of Finance would be asked to respond to the formal complaint about the “size and scope” of Nama before Brussels makes any decision about the agency and before it can start taking over bank loans. Fine Gael has also agreed to respond within a week to requests from the taskforce for further information on the potential for Nama to distort the Irish property market and the banking system.
No State aid has yet been provided by the Government to the banks under the Nama plan. The first transfer of loans is not expected until mid-February when the loans of the top 10 borrowers will be moved into Nama.
Independent valuations conducted by the banks and Nama over recent months appear to be recalibrating downwards the overall sum the State estimated it would pay for the €80 billion in loans last September. Weekend news reports suggested the Government would pay less than the estimated €54 billion in bonds following valuations of properties backing the loans, meaning the total discount to be applied will be higher than the 30 per cent originally outlined.
This confirms earlier reports and general talk around the valuation process over recent months, though it contradicts the view of Nama chief executive Brendan McDonagh when he spoke publicly on this earlier this month.
Either way, the State is likely to end up paying – the higher the discount, the bigger the capital holes created in the banks by the loan transfers and the more the Government will have to pump in to fill them. The lower the overall discount, the greater the losses faced by Nama working out the loans.
All eyes on US at Davos
It is always a bizarre scene when the world’s most powerful business and political leaders compete with snowboarders and skiers around the streets of the Swiss alpine resort of Davos each year.
While the debates on the state of the world dominate official proceedings at the World Economic Forum’s annual meeting, which kicks off tomorrow, it is the private meetings and after-hours networking parties, or “nightcaps”, that draw many delegates.
The ability to schedule back-to-back meetings with the head of the International Monetary Fund or the European Central Bank and then the vice-premier of China, the prime ministers of Greece and Zimbabwe and the presidents of Mexico and Iceland over just five days is undoubtedly appealing.
Access is everything in Davos as Taoiseach Brian Cowen discovered when he helped IDA Ireland sell the merits of investing in Ireland to a group of multinationals at an evening event last year.
Previous meetings saw former Bank of Ireland chief executive Brian Goggin and former chairman of Allied Irish Banks Dermot Gleeson in attendance, but the banking crisis and the setting up of Nama has left Irish bankers with more pressing business at home this year.
The cost of attending, thought to be in the region of €30,000, must also be a turn-off in these belt-tightening times. The focus of Davos has become more political since the credit crunch of 2007 and the full-blown financial and economic crisis of 2008-09.
Senior US government officials were notable absentees last year amid the early days of the Obama administration. In their absence, the Russians and Chinese absorbed most of the attention at Davos with appearances by Vladimir Putin and Wen Jiabao, the prime ministers of the respective countries.
The scheduled appearance of Larry Summers, economic adviser to US president Barack Obama, this year and the US administration’s plans to take on Wall Street announced last week should make this year’s think-in a livelier affair.
Davos sets itself the challenge of improving the state of the world, but this year expect plenty of differing opinions on how to go about improving it.
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