Hands-On Hanlon

 

MR NOEL Hanlon, the VHI chairman, currently battling against the new competitor in the health insurance industry, BUPA, is no stranger to tough, rough conflicts.

In his home town of Longford the population is said to have split down the middle over Mr Hanlon's voluntary liquidation of his ambulance construction plant in 1988.

The plant employed almost 200 people and was closed down by Mr Hanlon because the workers would not agree to an ultimatum concerning his right to select people for redundancy.

The High Court was told of liabilities of over £1.2 million which the company would not be able to meet. Banks, the Revenue Commissioners, and trade creditors lost out.

The plant's closure was a huge blow to the Longford economy and blame is attributed to the union by some, to Hanlon by others. Either way the strong feelings generated by the affair have lingered.

"It's a bit like the Civil War," said one local source.

Similarly, within the health insurance industry there are those who have strong admiration for Noel Hanlon, his commitment and his ability; and others who criticise him for being rash, and having a tendency to engender conflict.

Born in 1940, he left St Mel's College, Longford, in 1956. He had completed the Intermediate Certificate and was intent on pursuing a career in business. He worked in his father's Longford garage for two years before moving to Detroit, Michigan, where he worked for Ford. In 1960, unimpressed with the US, he returned to Longford to set up his own car-dealing business.

In 1967, having seen an opportunity to build ambulances for the local health services, Noel Hanlon established N. Hanlon (Ireland) Ltd.

He was awarded an IDA grant and expanded and developed the business until the plant was supplying 60 per cent of the British market, as well as selling to countries in the Middle East and Far East.

In 1980 he bought a troubled clothing plant in his parents' home town of Ballymahon. Dubtex had been manufacturing duffel coats but Mr Hanlon renamed the business Manford Clothing, and began producing men's suits and overcoats. The company prospered, and employment rose from around 60 to over 150.

Mr Hanlon sold the company in 1986 to an Irish/Dutch partnership. It went out of business in 1989. Mr Hanlon's income now comes from his property interests, most of which are in Longford though he does own some apartments in Dublin.

In the 1950s, Mr Hanlon began a friendship with Albert Reynolds which persists to the present day. Mr Hanlon and Mr Reynolds became neighbours in Longford alter the former Taoiseach married. Mr Hanlon sold Mr Reynolds his first car, a second-hand Volvo. A framed photograph of Mr Reynolds stands on a shelf in Hanlon's top-floor VHI office, alongside a photograph of the chairman's eight children.

"He's a tough manager always looking to improve results," said Mr Reynolds. "He works very hard and expects everyone else to do the same. His talents have been widely recognised."

In 1980, while Mr Reynolds was the Minister for Transport, Mr Hanlon was appointed chairman of Aer Lingus. He did not draw down the £2,500 per year fee to which he was entitled. He, his wife Fionnuala, and their eight children, used the opportunity to travel extensively, visiting South Africa, Australia, Hawaii and the US.

He sold his private plane when he took up the appointment.

In 1992, he was appointed chairman of the VHI by the Reynolds-led Fianna Fail/Labour coalition government.

In 1995 he was appointed to the chair of Aer Rianta. (He donates the £7,000 per year fee to charity.) At the time the VHI was searching for a new chief executive and, according to a senior source in the government of that time, it was envisaged that Mr Hanlon would resign as chairman of the VHI once that company had filled the vacant position.

However, this is disputed by Mr Hanlon, who said he was to retire from the VHI "at the appropriate time", this being when regulations included in the 1994 legislation covering the VHI were signed into law. This did not happen until last year, and by then the semi-state was once again without a chief executive.

Whatever was the case, when the Reynolds government fell and Labour formed a coalition with Fine Gael and Democratic Left, Mr Hanlon remained on as VHI chairman.

In 1994, Mr Tom Ryan resigned as the VHI's chief executive following an internal review into the respective roles of Messrs Hanlon and Ryan. Following the resignation, and up to the appointment of Mr Brian Duncan in February 1995, Mr Hanlon was the main figure involved in running the VHI.

Last year, following the expansion of the board of the VHI by the Minister for Health, Mr Noonan, a special sub-committee of the board was established to examine difficulties which had arisen between Mr Hanlon and the new chief executive.

Mr Hanlon was not on the sub-committee. Again the finding was in Mr Hanlon's favour and the chief executive resigned.

"I didn't object to the chairman being hands on, I objected to the decisions he made while being hands on, and the lack of consultation," Mr Duncan said.

The VHI is now looking for a new chief executive. The role is expected to be filled by early next month.

The position of chairman of the VHI is a non-executive one with an annual fee of £6,000 (which Mr Hanlon does not collect) and the use of a car. The latter is liable for benefit-in-kind tax.

Mr Hanlon is in his Abbey Street office almost every day, is very knowledgeable about the workings of the company and the health insurance industry generally, and is very engaged in the running of the semi-state.

"I would have gone in with a certain view about him and that view has changed very significantly since," said one of the new directors appointed last year. "I am impressed by his commitment to the VHI and I would say that is true of the majority of the new directors."

Mr Hanlon's blunt, sometimes abrasive manner, hides an impressive intellect, said another director, who has been on the VHI board for several years.

"He's a superb guy. I have the height of respect for the man. He is very straight."

But Mr Hanlon does not suffer fools easily and can be impatient with those he considers are not doing what needs to be done, according to the source.

Others are critical, saying Mr Hanlon came to the VHI when it had been put into good shape by accountant Noel Fox, but has failed to build on that work.

"He has an adversarial style and he is difficult to work with," said one source.

"He needs to dominate," said another. "Situations tend to become power struggles and sites of conflict, and he has a powerful desire to prevail."

During his time as chairman, Mr Hanlon has had conflicts with the Department of Health, with two chief executives, and with the private hospitals, the source said. His undoubted intelligence and energy could have been better employed, said the source.

The arrival of BUPA and the launch of their product range has led to a controversy over whether the community rating rules, under which people are not discriminated against as they grow older, have been breached. Any replacement of community rating by "risk rating", whereby the likelihood of a person becoming ill affects the price they pay for cover, will transform and greatly damage the health insurance industry, Mr Hanlon believes.

He is lobbying very strongly that the BUPA range should be banned as it breaches the legislation. What is at issue is the whole shape of the Irish health system.