AMERICAN CHAMBER OF COMMERCE:IRELAND CAN solve its economic problems without outside help, but the Government should nationalise the banks rather than setting up the National Asset Management Agency (Nama), members of the American Chamber of Commerce heard yesterday.
Charles Dumas, a director of London-based analyst firm Lombard Research, told the chamber’s annual spring lunch that the current Nama proposal could ultimately lead to a weakening of the banking sector because it “effectively reduces the banks to shells”.
Mr Dumas said it was not clear that a small country like Ireland would benefit from its banking sector “being so bifurcated in function between real estate and everything else”.
Full nationalisation of the banks, with subsequent carve-out and privatisation of “cleansed” banks would be a better approach, he said: “It permits speed and assured inclusion of all the bad loans, plus the skilled personnel to deal with them,” he said.
Mr Dumas, who is bullish about the chances of a recovery in the US and UK economies later this year, warned that any “uncertainty” about the extent of the banks’ toxic assets could lead to subsequent problems and the renewal of the financial markets’ perception that Ireland’s banking sector is “tainted”.
Dr Paul Duffy, president of the American Chamber of Commerce, said if the Government was going ahead with Nama, it was critical that it do so quickly.
Dr Duffy, a vice-president of the pharmaceutical group Pfizer, said no one should be under any illusions about the severity of the economic test that lies ahead.
“The next budget will have to tackle a range of decisions on the public spending side that will make the cuts made so far look easy,” he said.
“We are being closely watched abroad and cohesion should be an important national objective.”
Lorcan Kavanagh, Symantec
"We're holding up fairly well. There's been some impact, but overall we've been doing relatively well. I think we're starting to see some signs of the recovery. Things are starting to free up a little bit.
"We're going to have to change a few things in terms of our competitiveness for multinationals, and in terms of our skillsets, but ultimately I think we're going to be in a pretty strong position. Really, we need more at the higher end of the technology skillsets.
"Languages are going to be even more important going forward. Ultimately our proximity to Europe will be key. We've roughly maintained our headcount. It's tough enough, but we've managed to kind of weather things."
Bill Doherty, Cook Medical
"The medical device industry in general is holding up relatively well, and given that most of the companies here are exporting their output, it's really the economies globally that affect us in terms of sales.
"Costs here have got out of control over the last 10 years, but now we are seeing some reality coming into the cost side of the equation, and hopefully, going forward, the global economy will start to pick up.
"It's hard to know whether a worldwide recovery is happening or not, at the minute. One minute there seems to be a sign that says, 'yes, there is', and the next week there's a sign that says 'no, there isn't'."
Emma Dillon-Leetch, Radisson SAS
"It's tough, it's tough for everyone at the moment, but I think it will bring us all back to reality and I think it makes us improve our business methods a little bit better.
"In Galway, we're always experiencing hard times, but we have the Volvo Ocean race this week. We're expecting over 200,000 visitors to Galway over the next two weeks, so that's been the highlight of this year – it's getting us through this year.
"Our bookings are coming in for our conference facility. Companies still need to have conferences. They still need to get in touch with the people of Ireland and let them know about their products. Business is looking good for us for 2010."
Derek Whelan, Pitney Bowes (Ireland)
"We're a global company with 32,000 employees worldwide and just over 100 in Ireland. Overall, from a worldwide point of view, we're struggling, but our Irish business is relatively stable. We've seen a downturn obviously.
"We're best known for selling franking machines. We 'engineer the flow of communication' and sell both hardware and software. We did see some increase around March/April, though it's starting to decline a little bit now again. But our hopes are high. I think Ireland will always remain an attractive location for the Americans. The Americans have a great belief that Ireland can deliver the profitability and the people skills that they require to succeed."
