RSVP Business November'09

Executive Editor’s Note

In the Celtic Tiger decade we lost the run of ourselves and we all got immersed in the frenzy of spending.  Not just the inflated earnings and released equity from surging property values but we also committed to long-term loans with attractive low interest costs.  We demolished our parent’s rule of “you can’t spend what you haven’t got” and we went and spent our future in taking on borrowings.  All borrowings have to be repaid and most business operations have seen a collapse in revenues of between 20% for average retailers to 70% for those in seriously hit business like motorcars and construction.  Indeed, even those at the lower end of the turnover drop graph have to grasp the nettle of profit margin reduction.  This restructured business model gives the consumers value for money bargains and low prices, but the pressure of loan repayments for operations in a world of collapsed profitability spells disaster.  Thousands of retailers have their backs to the wall and need short term working capital loans to survive. The banks don’t have capacity for lending into this turmoil until NAMA gets underway and the banks are recapitalised.  Meantime, it’s a fight for survival using cost reductions, revitalised innovations, revised selling skills, and working harder and smarter than your competitors.

It’s difficult to admit it but it’s fair to say that the Government have the biggest problem of the lot in their efforts to keep the country afloat.  Yes we can blame them for letting all this happen but blame won’t solve anything.  They have to make the expenditure cuts that are screaming for attention. The millions of waste in our Government officials’ lavish expenses would have paid for the protective injection plan for the young girls of our nation.  The shenanigans in our state run institutions with the latest revelations of the scams in CIE beg the question about accountability of the senior management teams.  The Minister of Transport should be in control but he is up to his oxters in a battle to get drink-driving laws down from two drinks to one drink.  We all realise that 400 people are killed every year on Irish roads but 20,000 people die every year from smoking cigarettes.  You can only do so much to make people take responsibility for their actions.  The early morning car crashes are usually young people speeding on our roads after a night of carousing and legislation won’t change their bad behaviour.  Right now I believe that we have won the battle of responsible drinking to the extent that we should be focusing on the economic saving of Ireland Inc., as a whole.

We have a black hole of €25 billion in our annual income and expenditure account and the public sector still got their 3½% annual incremental pay increase.  In protest against any pay cuts they are now planning strikes and public protests.  Isn’t it time the union leaders showed some inspirational leadership and took some responsibility for getting the country back on its feet? David Begg and Jack O’Connor are men of experience with an astute understanding of our economic difficulties and I hope they will see the need for temperate co-operation in these tough times!

When it comes to the judiciary restraints needed I was astonished to read that the Irish Government is giving €900 million in charity aid to overseas third world countries.  It’s time we realised that our current resources can only stretch so far and our first responsibility is to take care of our own.

Dr. Bill’s Tip For Today

Take time out next weekend to relax and enjoy yourself.  Leave any stress and anxiety in a black sack with all the other negativity.  Just unwind, take a mountain-hill walk and focus on the positive side of your life.  With patience and perseverance you will come through all this as a winner!!