The Irish Independent reports that over €50m is to be made available to Irish companies to improve the skills of their workers, as concern mounts about job losses, especially in foreign-owned companies.
Skillnets, the organisation responsible for supporting training networks for business, yesterday announced the extra funding for the period 2007-09.
Enterprise, Trade & Employment Minister Micheál Martin revealed the increased funding to launch the start of a nationwide series of seminars around the country to promote the benefits of employee training and to encourage an increase in workplace training.
It comes amid reports that computer firm Dell, which employs over 4,000 people in Ireland, is planning to cut its global workforce. Most of the recent job losses were part of worldwide cutbacks by firms like Motorola and Pfizer.
Operations
Dell refused to comment on the speculation from US analysts that the company would merge some operations and seek to cut over 13,000 jobs from its total workforce.
Mr Martin said the big issue was whether Ireland would be able to get new jobs to replace the ones it lost. "There were 25,000 job losses last year, but we created many more than that. The IDA had one of its best ever years," he said.
The new funding from Skillnets will pay up to 90pc of training costs by encouraging networks of companies to provide employees with training relevant to the specific needs of the companies.
Since 1999, 10,000 firms and 50,000 staff have taken part in Skillnets programmes and the funding will almost double in the next two years.
"Workers don't always get the access that they should to training programmes, particularly those with lower skills," Mr Martin said.
"We want more companies to provide top-class training to employees and it couldn't be any more straight forward or cost-effective than through the Skillnets programme."
The Irish Independent also reports that Sean Quinn isn't afraid of many things. He made his original money by taking on CRH and not many Irish groups have managed to take on CRH and live to tell about it.
He went on to take on Ardagh and then took on the might of the insurance industry after finding that he could not get a reasonable quote for his own business.
Along the way he has amassed a portfolio of hotels and pubs which others would call an empire, but which to him is merely a sideline.
More of a sideline now than before, as he has sold most of his Irish pubs and many of the hotels claiming that there are too many players in the market and that margins have fallen below a level which makes them viable.
No, Mr Quinn is not afraid of many things, but last Wednesday he was literally running out a side door of his own Slieve Russell hotel after giving a rare speech to a group of about 400 mainly local business people.
He was running because he was pursued by a number of journalists, your columnist included.
As I called his name all I got was a "Sorry Tom" and a wave. It is not as if he has nothing to say.
Shortly before making a bee line for the side exit, Mr Quinn delivered what can only be called a tirade against Vincent Sheridan, accusing the VHI chief executive of deliberately forcing down his profits to make the case for risk equalisation payments.
If this had been said by somebody like Micheal O'Leary it would have been interesting. When it comes from a man who only lifts his head publicly once in a blue moon it is explosive stuff.
Mr Quinn does not like microphones and standing at the podium last Wednesday he seemed to shy away from the two microphones in front of him so that some delegates had to struggle to hear him.
For all that he was in flying form, and clearly annoyed as he listed the ways in which he said VHI had driven down its own profits €136m in 2004 to €36m last year.
He accused VHI of opting for minimal price increases, becoming less efficient, increasing reserves for outstanding claims and introducing loss-making practices. Not surprisingly, VHI has strenuously denied the claims. Mr Quinn is not afraid of many things, and it is obvious that he is not afraid of the VHI. It is difficult to think of last Wednesday's statements as anything other than a declaration of war.
That declaration does not seem to justify his decision to come out into public last week. He has taken on big companies before without upping his public profile.
To my knowledge he has only agreed to two press interviews in the past seven years and I wrote both of them.
It took two years to get him to agree to the first, and a further two to get him to agree to the second. That was about four years ago and I'm still waiting for the third.
So what was it that drove him out in the open last week. The word on the streets of Cavan is that he was furious at the Government's decision to bring in emergency legislation preventing him, as the new owner of Bupa, from availing of an existing three-year derogation from risk equalisation payments.
It seems he feels he was knobbled by Mr Sheridan, whose political contacts would be much better that those of the Fermanagh man.
There's a good chance he is right.
Mr Quinn is not afraid of many things but, as reaction to last Wednesday's speech proved, if really wants to take on VHI he would be well advised to sublimate his aversion to the media.
The Irish Times reports that Ireland can gain an edge on other economies by attracting top managers and workers from abroad and by building a world-leading management school, according to the chief executive of the Irish Management Institute (IMI).
"Our capacity to move ahead of other economies revolves around Ireland being seen as a hub for talent - we have to be seen as a place to migrate to," Tom McCarthy said. "If we achieve this, more industry will move here."
Mr McCarthy gave the example of Google's decision in 2003 to locate its second-largest operation in Ireland, where it services customers in more than 35 countries in their local time zones and languages. The company announced last November that it would add 500 jobs in Dublin, bringing its workforce in the capital to about 1,300.
"This investment was driven by our capacity to get people," Mr McCarthy said.
"There is a Googleplex in California that can support operations in nine languages, whereas in Dublin they can support 25 languages. We have the talent for more of these companies to locate here."
While the IMI chief executive welcomed government investment in fourth-level education, designed to foster research and innovation, the system needs to be commercialised. The IMI, which runs a management programme with Trinity College, believes that developments in the fourth-level sector need to be consolidated by creating a premier management school.
"Through our alliance with Trinity we have put in the groundwork," Mr McCarthy said. "Now we need an executive masters programme that would rank in the world's top 20."
The challenge of attracting talented individuals to Ireland will be one of the issues addressed at the institute's conference on April 26th/27th. Factors which have contributed to the State's economic success and how Ireland could manage in a downturn will be discussed.
"We are picking up a lot of concern at the moment," Mr McCarthy said.
"There is concern among senior managers and executives throughout our network about higher interest rates and associated costs. However, our boom was characterised by shocking growth rates, sometimes 10 per cent year on year. We got to the point where we were a premier league economy and we are now facing the constraints of a normal economy."
Speakers at the conference will include Taoiseach Bertie Ahern and Stockbyte founder Jerry Kennelly, who sold his company last year to Getty Images for $135 million (€103 million). Former Finnish prime minister Esko Aho will explore the role of innovation and how his country transformed itself through innovation and investment in a knowledge-based economy.
Gerry Robinson, former chairman of Allied Domecq, BSkyB and Granada, will offer advice on managing performance and on change in organisations. The management guru became the focus of a BBC TV series after he was set a challenge to reduce waiting lists at an NHS trust in Yorkshire, with no extra funds, in six months.
The Irish Times also reports that Havok, a leading Irish supplier of interactive software and video games, is set to come to the rescue of some workers at the Motorola plant in Cork which is due to close at the end of May with the loss of 330 jobs.
Havok, which has provided the technology for top grossing films such as Lord of the Rings, Harry Potter and Troy, plans to interview a number of engineers from the Mahon plant over the next two weeks.
The interviews arise out of a jobs advertisement last month that Havok aimed at Motorola employees.
Executives at Havok have vowed to open an office in Cork if they can attract over 10 staff from Motorola.
They hope to employ around 30 former Motorola staff, with the potential later for a research and development centre in the city.
It is understood Havok targeted Motorola staff because their mobile phone expertise fits well with gaming technology.
Formed in 1998, Havok is headquartered in Dublin, and has offices in San Francisco, Texas, Tokyo, Munich, Calcutta and Stockholm.
Its international reputation is built on middleware - the essential background technology that controls how games work.
The company has worked on popular video games such as Age of Empires and Halo 2.
Meanwhile, workers at Motorola are set to finalise their exact finish dates this week. A number of staff will leave the plant at the end of this month. It is scheduled to close completely towards the end of May.
Motorola is providing assistance to all affected workers to help them obtain alternative employment as soon as possible.
It is being assisted in this task by the Department of Enterprise, Trade and Employment, Enterprise Ireland, IDA Ireland and Fás.
About 22 companies attended an employment fair organised by Motorola management earlier this month.
The US electronics and mobile company confirmed last week that operations were to cease at the Mahon site with the loss of 330 jobs.
The remaining 20 employees, who are described as senior staff, will continue to work for Motorola from their homes.
The company entered into an "employee consultation process" with workers in January shortly after US head-office announced plants to cut 3,500 jobs or about 5 per cent of its international workforce.
The restructuring plan to cut costs was made after Motorola experienced a disappointing 48 per cent decline in fourth-quarter profits.
The Irish Examiner reports that Irish punters are set to gamble more than €100 million on this week’s Cheltenham racing festival.
Bookies are expecting their turnover to be ahead of last year, which was the first time the festival was held over four days. There was some concern last year that the extra day of racing would dilute turnover but that has not proved to be the case and the betting industry is forecasting a lift this year.
Ivan Yates, owner of the Wexford-based Celtic Bookmakers with 50 shops around the country, told the Irish Examiner that the betting industry will be out to ensure that punters do not walk away with their money this year.
“We’ve a lot of six-figure liabilities but we’ll be taking the punters on. We don’t think the Irish will have as many winners as last year.”
That view is shared by betting exchange Betfair, which expects to process 300 bets per second at peak time this week.
“The smart money says we’re going to struggle though, and nine winners or more is out to 5-2 on Betfair now,” its Irish spokesman Eoin Ryan says.
“The fact that horses like War of Attrition and Celestial Wave haven’t made the Festival has been a bitter pill for Irish punters, many of whom would have backed both of those at big prices ante post.”
Mr Yates said the four-day festival is worth around €6m in betting to Celtic Bookmakers and he stands to lose €500,000 if Brave Inca repeats his success in the Smurfit Champion Hurdle on Tuesday.
The Financial Times reports that the head of the US’s first private equity lobby group has hit out at the “extremely low” understanding of the industry by policymakers as the sector launches its first campaign to head off public criticism of its growing role in the economy.
Douglas Lowenstein, a veteran lobbyist recently named by 10 of the largest buy-out groups to head the Private Equity Council, told the Financial Times the body would set out to prove that the industry’s deal-making benefits the whole economy.
Mr Lowenstein, a former chief lobbyist for the video game industry, said the groups’ strategic priority was to avoid a repeat of the hostile reaction their multibillion-dollar takeovers prompted in Europe.
In his first interview since taking the post, Mr Lowenstein said: “In parts of Europe, there is a lot more overt hostility from certain constituencies. One of the outcomes is to avoid a situation where private equity becomes a political punching bag.”
Politicians and trade unions in Europe have accused private equity firms, which were last year branded “locusts” by Franz Müntefering, Germany’s deputy chancellor, of asset-stripping and savage cost-cutting at the companies they buy.
The backlash recently spread to the UK, where private equity groups are targeting famous high street names such as the retailers J Sainsbury and Alliance Boots.
In the US, opposition has been more muted despite a sharp increase in the size of the funds raised, and deals clinched, by buy-out groups.
However, many in the industry fear that discontent with the large returns reaped by private equity funds and the fortunes amassed by its top executives could prompt politicians and regulators to take action.
Mr Lowenstein said the council, whose members include Kohlberg Kravis Roberts, Blackstone and Texas Pacific Group, would strive to fill the “knowledge gap” of Washington policymakers.
“The level of understanding of private equity in policy circles is extremely low,” he said. “There is both a lack of understanding and a lack of knowledge and either of them is problematic from a public policy standpoint.”
On policy matters, Mr Lowenstein said one of his first tasks would be to fight plans to increase taxes on the industry.
He said the council would lobby specifically against efforts in the Senate Finance Committee to increase the tax rate on the “carried interest” – the gains made by private equity firms on deals. “Yes, there is a proposal . . . obviously we have a stake in that,” he said.
The council is poised to commission research to back the industry’s claim that its deals help make companies leaner and more efficient and add value to the economy as a whole.
However, Mr Lowenstein said the organisation would not lobby on individual deals, such as the $45bn bid by KKR and TPG for the Texas-based utility
The FT reports that Germany is this week building on its reputation as an advocate of environmental causes through an ambitious public education campaign, distributing to schools 6,000 free copies of a prize-winning documentary by Al Gore, the former US vice-president.
The Oscar-winning film, An Inconvenient Truth, will be shown to 5,000 teachers next Sunday in special cinema screenings in 27 German cities.A DVD copy will then be sent to schools to be watched by children aged nine and upwards. The scheme is being run by the environment ministry; WWF, the conservation charity; and a private businessman.
German environmentalists argue the film's message - that urgent global action is needed to manage climate change - is more appropriate in the US than in Germany, where campaigning about global warming has been under way for decades.
Sigmar Gabriel, environment minister and a trained teacher, counters that detailed awareness of the issues is modest in Germany.
"The film is good because it gives both information but also stirs emotions."
The New York Times reports that the Ford Motor Company is expected to sell Aston Martin, maker of the upscale British sports cars favored by James Bond, to a group of investors that includes the racing mogul David Richards and a pair of Kuwaiti companies, people with direct knowledge of the deal said Sunday.
Ford, which put Aston Martin up for sale last August, will retain a 15 percent stake in the marque, according to a person knowledgeable about the terms of the deal.
He asked not to be named because the deal was not yet final.
The sale, which had been expected for several days, will be announced Monday morning, this person said.
The deal is worth about $868 million, a figure first reported by The Financial Times.
Aston Martin is the first nameplate sold by Ford since it announced a revamping plan last year that it calls the Way Forward. Ford, the second-largest American automaker behind General Motors, lost $12.7 billion in 2006.
The deal allows Ford to raise a significant amount of money for its restructuring effort, yet maintain its ties with the brand, this person said. It also returns Aston Martin to British ownership at a time when other famed British car brands have fallen into foreign hands.
Analysts have said an Aston Martin deal could clear the way for Ford to sell its other British brands, like Jaguar and Land Rover, even though Ford, based in Dearborn, Mich., has said it is not interested in doing so.
Officials at Ford and its European Premier Automotive Group division, which includes Aston Martin, declined to comment Sunday.
“They need the cash and they need to invest in their products,” said Brian Moody, senior editor at Edmunds.com, a Web site that gives car-buying advice to consumers. “They need to focus on their core stuff.”
The principal buyer, Mr. Richards, is the chief executive of Prodrive, a motor sport and automotive technology company based in Banbury, England.
Prodrive helped develop Aston Martin’s racing program starting in 2004. Prodrive is scheduled to enter Formula One racing in 2008, and there has been speculation that it could use Aston Martin as a platform for its cars.
Prodrive also is part of a joint venture with Ford called Ford Performance Vehicles, which builds the Ford Falcon car for the Australian and New Zealand markets.
The two Kuwaiti companies that joined Mr. Richards in bidding for Aston Martin are Adeem Investment and the Investment Dar Company, Adeem’s chief executive, Mustafa Ebrahim al-Saleh, told Bloomberg News on Sunday.
Trading of Investment Dar stock was suspended on the Kuwait stock market pending news of an “important investment deal,” Bloomberg reported.
Aston Martin has been one of Ford’s few profitable brands in recent years, although its low sales volume made it more a source of prestige than earnings.
“Compared to their other brands, Aston is just so far out there,” Mr. Moody said. “Even something like Land Rover has a little more relevance to the average consumer than Aston.”
Aston Martin has about 100 dealers worldwide and sells three models: the $110,000 V8 Vantage, the $165,000 DB9 and the $260,000 V12 Vanquish.
It will soon begin production of a fourth model, the $250,000 DBS, which the actor Daniel Craig drove in the latest James Bond thriller, “Casino Royale.” An Aston Martin first appeared in the Bond series of movies in “Goldfinger” in 1964.
Its 2006 sales rose by about 50 percent, to 6,500 vehicles. However, the Premier Automotive Group — made up of Aston Martin, Jaguar, Land Rover and Volvo — lost $327 million.
In soliciting buyers for Aston Martin last August, Ford’s chairman, William Clay Ford Jr., said new ownership would “allow it to reach its full potential, while enabling Ford to efficiently raise capital for its other brands.”
Mr. Ford continued, “Since Aston Martin’s dealer network, product architecture and size are distinctly different from other Ford brands, it is the most logical and capital-smart divestiture choice.”
Aston Martin was founded in London in 1913. Ford bought 75 percent of the brand in 1987 for an undisclosed amount and took full ownership in 1994 as it opened a new factory for the brand in Bloxham, England.
Ford brought in a former Porsche executive, Ulrich Bez, to run Aston Martin.
The Sunday Times in London said that Mr. Bez would keep his position at Aston Martin while Mr. Richards assumed the role of chairman.
The NYT also reports that Halliburton, the big energy services company, said on Sunday that it would open a corporate headquarters in the United Arab Emirates city of Dubai and move its chairman and chief executive, David J. Lesar, there.
The company will maintain its existing corporate office here as well as its legal incorporation in the United States, meaning that it will still be subject to domestic laws and regulations.
Although the announcement of the new Dubai arrangement took many by surprise, Halliburton said that the move was part of a strategy announced in mid-2006 to concentrate its efforts in the Middle East and surrounding areas, where state-owned oil companies represent a growing source of business.
Halliburton, which was led by Vice President Dick Cheney from 1995 to 2000, is currently in the process of spinning off KBR, its military contracting unit, to focus on its business of drilling wells and maintaining fields for oil companies. The company did not say what implications the Dubai development might have for its military contracts. Lea Anne McBride, a spokeswoman for Mr. Cheney, referred questions about the company’s plans to Halliburton.
The Dubai announcement, which Halliburton made at a regional energy conference in Bahrain, comes at a time when the company is being investigated by the Justice Department and the Securities and Exchange Commission over allegations of improper dealings in Iraq, Kuwait and Nigeria. Halliburton has also agreed to pay billions of dollars in settlements in asbestos litigation.
Halliburton would not elaborate on Sunday on what the shift of its top executive might mean for some of the issues it faces. The move seemed to raise questions about whether Halliburton might gain tax advantages or other benefits.
A Halliburton spokeswoman, Melissa Norcross, referred inquiries to the company’s press release, saying in an e-mail message, “The C.E.O.’s job is global by nature. He will continue to remain attentive to our shareholders, clients and employees around the world.”
Ms. Norcross added, “As companies usually refer to the C.E.O.’s office as the corporate headquarters, that’s what we are doing. Basing the C.E.O. in Dubai to focus on our Eastern Hemisphere growth makes good business sense, as it is the center of our Eastern Hemisphere operations and a global business hub. We will maintain our company’s legal registration in the United States and we are not leaving Houston.”
The mayor of Houston, Bill White, was notified by telephone shortly before Halliburton made the announcement, according to a spokesman, Frank Michel.
“We don’t expect it will have a big impact on employment here,” Mr. Michel said. “We point out that Houston continues to be the center for the international oil and gas business.”
“Having a corporate headquarters is different than it used to be,” Mr. Michel added. “Executives spend a lot more time on airplanes, and we understand that.” He noted that Schlumberger, one of Halliburton’s top competitors, maintains offices in both Paris and Houston.
On the face of it, the decision to move Mr. Lesar abroad appears to point mainly to how the epicenters of the energy business are moving from the mature fields of North America to the younger fields of the Middle East and Africa. It also underscores the arrival of Dubai as a center for energy deal-making and commerce, a role once solidly filled by Houston.
“My office will be in Dubai, and I will run our entire worldwide operations from that office,” said Mr. Lesar, who holds the titles of chairman, chief executive and president, at a conference in Manama, Bahrain’s capital. “The Eastern Hemisphere is a market that is more heavily weighted toward oil exploration and production opportunities. Growing our business here will bring more balance to Halliburton’s overall portfolio.”
Halliburton is incorporated in Delaware and its stock is traded on the New York Stock Exchange. Reuters reported that Mr. Lesar said Halliburton would like to list its shares on an exchange in the Middle East, which it could do while maintaining its listing in New York.
Halliburton reported a record $2.3 billion in profit last year and continues to be the dominant oil-field service company in North America, where it generates 60 percent of its operating income.
Over the last several years, an increasing amount of Halliburton’s business has shifted to places like Kuwait, Russia, Libya, Australia, Vietnam, and west and central Africa. And, mirroring trends in the energy business, its customer base is shifting from traditional Western oil companies to national oil companies in developing countries.
Some analysts who follow Halliburton said they did not think the relocation of Mr. Lesar reflected anything more than changes in the energy business.
“They are moving to the center of the Eurasian-African hemisphere and that’s where the bulk of the work is going to be in the future,” said Barbara Struck, an analyst with Energy Intelligence Group, a research firm.
She said she doubted the company was trying to evade laws in the United States. Halliburton has suffered several years of negative headlines, many having to do with its administration of a $16 billion deal to support American military operations in Iraq. Halliburton’s KBR subsidiary has been the subject of a number of investigations for mishandling billions of dollars of housing, food and fuel contracts for American troops and government officials operating in Iraq. Halliburton began spinning off KBR last year.
During Mr. Cheney’s tenure as chief executive, Halliburton bought a company that saddled it with asbestos claims. The company has agreed to pay nearly $5 billion in settlements.
Despite its recent problems, Halliburton posted record revenue, net income and margins last year.
Perhaps the biggest winner could be Dubai itself, one of seven emirates in the United Arab Emirates confederation, which has sought to establish itself as a regional commercial center on par with Singapore and Hong Kong. Most multinational companies, including Halliburton, have made Dubai a regional hub for their Middle Eastern business over the last decade.
