Dublin Euro election outcome taking shape

The TNS/MRBI poll published in The Irish Times on 15^th and 16th May indicates that Fianna Fáil, with an 16% share of the poll (Eoin Ryan 11%, Eibhlin Byrne 5%) in Dublin, is faced with a real struggle to maintain its European Parliament seat in Dublin on June 5th . The party achieved a 23% share of the valid poll in the 2004 Euro election in Dublin. An 11% share of an opinion poll now is 14 percentage points short of quota. Where will transfers come from to fill this deficit?

The satisfaction rating of the Government at 10% is at an all-time historic low, and compares to 14% last February, 18% last November and 46% last June. How will the incandesence of voters find expression on June 5th among those now without a job, or the prospect of a job, or among those who have just seen at the end of May a further chink of their income confiscated in taxation? This government has allowed the Irish economy to behave since 2003 like a high-speed vehicle that had no brakes, no anti-roll bar, an engine with no coolant and no spare wheel. This posture was to suckle the vanity and delusion of a cluster of red-neck property developers, dinasour bankers and other sundry carpetbaggers. This government presided over an economy where citizens were paying up to 15 times their annual income for a very basic home, often in a very remote location. That is the direct consequence of politicians corrupting the planning process - when ten's of thousands of pounds and euro are transmitted in brief cases and brown envelopes. The chickens are coming home to roost. The voters will deliver their brown envelope at the end of a red-hot poker on June 5th and in subsequent elections. The cronies, the brothers', the sons' and daughters', the spouses' and the lovers' have will learn if inbreeding, nepotism and stroke politics is still attracting voter support.

The average satisfaction rating for the government previously in each of the past six years highlights the depth of the collapse in public support of the Government.

Average Annual Satisfaction with Government

2008	36%
2007	45%
2006	46%
2005	45%
2004	37%
2003	28%
	Source:TNS/MRBI

Fine Gael, who have a achieved a 6% gain in its share in indicative first preference support nationally in hypothetical general election have also improved their position in Dublin, no doubt partially attributable to the attraction of George Lee as their candidate in the Dublin South by-election. Gay Mitchell is achieving 26% support in a hypothetical Euro poll - 4% more than accomplished in the 2004 Euro election. Mitchell is considered to have been the most capable of the Irish MEP's

The Labour Party dropped 4 percentage points nationally and it Dublin stand at 21%, which is a 2% gain on 2004.

While Fianna Fáil is more convulsed by nepotism and inbreeding and the consequences from this, the Labour Party have a real challenge with respect to the age profile of their Dáil team. The average age of their current 20 members, today, May 15th 2009, is 57 years+ and this average will be well north of 60 years by the next scheduled date for a general election – May 2012. A colleague commented to me earlier that “all of their people are the same age as my father, or older” and younger voters will not identify with ‘daddy-clones’! Twelve of the curerent 20 deputies will be over 60 years old and the youngest will be 40. Many of the current cohort enjoy considerable personal support but this would not automatically transfer to a successor candidate as has been shown in places such as Cork South-West and Tipperary. de Rossa is 69 years old so he will be like an ancient cardinal if he were to remain an MEP until 2014.

Given the collapse of public confidence in this government, it is likely that that turnout in the European and local elections will be high as voters register their preferences directly. This will mean a quota in the region of 105,000 votes in the Dublin Euro constituency - 21,000 more than the 2004 quota.

Fine Gael support is particularly strong among those aged 50 and over but, reassuringly for FG, it has even support across the demographic spectrum. Fianna Fáil support is especially weak among the 35-49 age cohort – people with young families, but it is also weak among the 18-35 year olds. Fine Gael is strong among the AB social cohort while Fianna Fáil does worst among the ABC1 cohort.

The Green Party is attracting 6% support in Dublin and its support base is strongest among the 18-24 year olds and the ABC1 social cohort but is weakening since the 2007 general election. Their candidate, de Burca, has neither said anything, or done anything, to make a strong enough impact so far to put her into contention. It would be helpful if voters were to know what the party's stance with respect to the next referendum on The Lisbon Treaty before they cast their vote on June 5th. After all, this is an election to populate the European Parliament and the outcome of this referendum will define Ireland's relationship to the EU.

Sinn Fein is attracting 14% support. Its support is lowest among the AB social cohort but rises to 13% nationally among the C1working class category. This level of support is comparable to the share of the 2004 valid poll but is 11% short of quota. McDonald and deRossa were elected on the 6th count.

The Independent candidate, Patricia McKenna, achieved 8% in the TNS/MRBI poll while Joe Higgins, the Socialist achieved 7%. Higgins secured 23,000 votes in the 2004 election but he and his counterparts only obtained 11,500 votes in Dublin in the 2007 general election.

The Libertas candidate, at 1%, does not feature on the voters' radar. This is not surprising as she has said nothing to indicate what her potential competencies as an MEP would be. Her literature makes out of context comments about what she would like the electorate to believe are the vanalities of her rivals but cloaks her own identity in an absolutely opaque shroud. A wise electorate do not throw their support behind ghost candidates or vacuous slogans.

National Trends

	General Election Result 17 May 2002	General Election Result 24 May 2007	National Euro Election Result May 2004	TNS/MRBI Poll Feb 2009	TNS/MRBI Poll May 2009
Fianna Fáil	41.5%	41.5%	29.5%	22%	21%
Fine Gael	22.5%	27.3%	27.8%	32%	36%
Lab	10.8%	10.1%	10.6%	24%	20%
Green	3.8%	4.7%	4.3%	4%	3%
Sinn Féin	6.5%	6.9%	11.1%	9%	9%
Others	14.9%	9.5%	16.8%	9%	9%

This ought to be a fascinating set of elections because the voters will be mobilised and they are greatly distressed by turmoil so much of which is a local political creation. Yesterday, for example, the Fianna Fáil candidate in the Dublin South by-election spoke on radio about the National Management Assets Agency, Ireland’s ‘bad bank’ being “up and running”. This is the entity that is supposed to stabilise the nation’s zombie banks. Hours later, Michael Somers, the Chief Executive of the National Treasury Management Agency, spoke at the Public Accounts Committee and spoke of his concern about staffing and operational issues relating to NAMA. That is the type of stunted political thinking that inbreeding brings about – an absolute inability not just to see the wood from the trees, but to distinguish between a copse and a field of buttercups!

Losses continue, cash is burning, – will Aer Lingus even have a pot to piss in?

There are 3,117 shareholder accounts in Aer Lingus, each of which account for 10,000 shares, or fewer. These comprise 88.35% of the total number of accounts but they only represent 1.86% of the total equity. The Irish public have a particular curiosity about the progress of former state companies and to understand who among, stakeholder really reap the benefit of privatisation. The Aer Lingus experience would suggest that the executive and non-executive directors, as well as professional advisors, achieved first-mover advantage but that the pickings for all other stakeholders have been sparse and will remain so.

The first Irish state enterprise to be privatised was the monopoly telecommunications company, An Bord Telecom Éireann. The Irish public believed that their time to become a prosperous, share-owning democracy had arrived when it was privatised in July 1999. The EU had ruled in 1995 that the European telecom sector was to be opened to full competition. The former state company had a turnover in 1999 of €1.82 billion (+16%), achieved following the introduction of ‘the biggest ever price reduction package of €165 million’. It returned a profit of €84 million that year after interest, tax and €127 million of exceptional costs. There was an air of unrestrained exuberance as 500,000 Irish bounty hunters, trusting their Government, purchased equity in the newly privatised enterprise (Eircom Plc) at £3.90 per share on 8 July 1999. The shares peaked briefly, at £4.80 before the bubble burst. Eircell, the mobile phone business of Eircom was acquired by Vodafone in 27 May 2001. Eircom shares were valued at £2.62, a drop of 32% since the IPO. Its fixed line element of the business for which demand was diminishing, Golden Pages and directory enquiries remained with Eircom. The 1999 dreams of equity holders evaporated along with a large chunk of their wealth as the shares traded for £1.16 in June 2001 – following the demerger. Eircom is now about to be sold for the 5^th time since 1999.

The annual general meeting of Aer Lingus Plc is to take place on 5 June 2009. It is over 2½ years since the airlines IPO in late September 2006. It was the Irish second commercial state enterprise to be privatised and the time is opportune to ask is Aer Lingus rapidly reaching a stage where it may not even have a pot to piss in because it is burning cash, incurring losses, business activity trends are contracting, its share price has collapsed, its historically high level of finance income is reducing, credit availability for everybody is tightening and there is no prospect of dividends. At the end of its first quarter 2009 Aer Lingus announced it iis anticipating a materially larger operating loss in 2009 than in 2008.

Aer Lingus was founded in 1936 and was operating 35 aircraft in 2006. The Government owned 85% of the equity and the balance was owned in trust by Aer Lingus employees prior to the IPO.

The Irish Government received €240,914,000 and retained 28.3% of its shareholding. The proceeds of the share issue amounted to €534 million. A sum of €104 million of this was paid into two supplemental employee pension funds. The balance was to be used to expand and replace the Aer Lingus fleet. The fees associated with the IPO amounted to €29.74 million.

Those who received the fees presented the IPO proposition was presented on the basis of the strengths of Aer Lingus and these ‘strengths’, described in a series of cliches can now be viewed in the context of hindsight:

Strengths 2006 per IPO Prospectus	Comment, May 2009
Returns-focused business model for a competitive market	Net Profit (Loss) 2006 -€69,926,000 2007 €105,265,000 2008 - €107,815,000 Share price + Market cap Float price €2.20, 2 Oct 2006; €1.3 billion 2006, 31 Dec: €2.74, €1.449 billion 2007, 31 Dec: €2.09, €1.11 billion 2008, 31 Dec: €1.53, €816.9 million 2009, 13 May: €0.59, €315 million
Proven track record of financial performance	Net overall (decrease) / increase in cash, at Dec 31 2001: €45,059,000 2002: -€30,078,000 2003 €4,082,000 2004: €289,000 2005: -€1,801,000 2006: -€660,000 2007: -€13,472,000 2008: €8,733,000 Fuel costs increased by 58.4% in 2008 and represented 29.2% of operating costs, compared to 21.2% in 2007. Cumulative cash flow from operations has declined by €118.1 million since 2006. An increase in cash flow from operations of €65 million in 2006 was augmented by €132 million in exception items: provision of €16.2 million towards the defence of the Ryanair 2006 'unsolicited' bid, €121 million relating to the contribution to the Supplemental Pension Fund following the IPO and €17 million being the capitalisation of pay increase foregone.
Strong presence in growing Irish Market	Expanded service base to Belfast in 2008 and located 3 aircraft there. Service from Belfast will be reduced for the 4 winter months of 2009 / 2010. Fleet to be reduced to 2 aircraft. Service to Faro, Barcelona, Milan, Rome and Paris to be stopped in Sep 2009 Service between Shannon and LHR has been resumed recently.
Enhanced service offering
Positive brand recognition	Agreed!
Leading position between Ireland and US	Competitors include Delta, US Airways, Continental, American Airlines. Aer Lingus and United Airlines embarked on a partnership in January 2009 whereby a new service is launched between Washington DC (Dulles Airport) and Virginia with daily service from March 2010 and both carriers will equally share the risk, commercial and operating benefits. A code share arrangement has been in place since October 2008.
Key competitive positions at DUB and LHR	Aer Lingus operate at principal metropolitan airports whereas Ryanair uses secondary airports and has more bargaining power. Airport charges account for 17% of operating costs at Aer Lingus.
Strong capital structure
Experienced management team	The experienced management team presented in 2006 included: Dermot Mannion, Chief Executive Greg O’Sullivan, Finance Director Niall Walsh, Deputy Chief Executive Dick Butler, Ground Operations Director Enda Corneille, Commercial Director Stephen Kavanagh, Planning Director Liz White, PhD Human Resources Director Mannion departed Aer Lingus on 6 April 2009. His remuneration at Aer Lingus doubled in the course of his tenure was €530k (2005) - €982k (2006) - €1.11 million (2008). It reduced to €652k in 2008. O’Sullivan Aer Lingus on 6 June 2008. His remuneration was €154k (2006) - €515k (2007) - €138k (2008) and he received a payment of €443k on retirement plus a special pension contribution of €415k Other changes announced in April 2009 include: Niall Walsh became Chief Operating Officer with responsibility for ground and flight operations, procurement and airport bases. He joined Aer Lingus in 1994. Kavanagh is now Head of Long-Haul Operations which generated revenue of €402 million from 11 routes and flew 1.26 million passengers in 2008 in 9 aircraft. Seán Coyle, Chief Financial Officer, is also Head of the Group’s Short-Haul Operations – 95 routes, 32.6 aircraft and 8.37 million passengers in 2008. He is also in charge of ancillary revenues (€149 million in 2008, up from €108 million), information systems and e-commerce business. Coyle joined Aer Lingus from Ryanair, where he had been employed since 1998, latterly as Director of Scheduled Revenues and formerly Head of Investor Relations and Commercial Director. He was paid €187k between 22 Aug and 31 Dec 2008. Dr White (human resources) and Corneille (media) continue in situ. Fees paid to non-executive directors increased from €18k to €45k per annum following the IPO. One of these, Seán FitzPatrick, resigned as senior independent director, from the board of Aer Lingus on 19 December 2008 when he disclosed that he concealed cumulative loans of €122 million to himself by the bank he founded and of which he was chairman, Anglo Irish Bank, from the shareholders of that bank through makinh short-term deposits at Irish Nationwide Building Society. The building society was established and dominated by Michael Fingleton for almost 40 years until his retirement on 30 April 2009. Investigations by the Garda Fraud Squad and the Office of Director of Corporate Enforcement are ongoing. FitzPatrick has been appointed by the Irish Government to the board of Aer Lingus on 22 March 2004.

Ryanair and Aer Lingus

Ryanair currently own 29.82% of Aer Lingus equity.

October 2006

Ryanair purchased a 16% stake in Aer Lingus on 2 October 2006 and increased its stake to 19.2% on 5 October as a prelude to launching a bid based on a cash offer of €2.80 per share. This valued the business at €1.48 billion, a 27% premium over the float price for the remainder of Aer Lingus. This offer was to have been financed from Ryanair’s cash resources of €2 billion.

Are Lingus spent €24 million defending this ‘unsolicited offer’ – in circumstances where the government, employees, and the two leading Irish banks controlled 47% of the equity

The bid was blocked by the EU on the grounds that it would create a ‘near monopoly’. The Government rejected the bid on grounds of it being anti-competitive, ill-conceived and contradictory.

December 2008
The 2008 bid was a €1.40 cash offer per share valuing Aer Lingus at €748 million. The Irish Government rejected this bid in January 2009 on grounds that it was anti-competitive.

Aer Lingus spent €5.84 million on defence costs and in a letter to shareholders dated 22 December 2009, the Chairman, Colm Barrington, stated:

“Aer Lingus is and will be a profitable company with a clear strategy for growth and with unmatched financial strength – net cash of €803 million”

The Aer Lingus financial year ended 9 days later on 31 December and losses for the year amounted to €107,815,000. Capacity increased by 13.9% in 2008 but the passenger load factor declined from 75.4% to 72.8%. The airline has 7 more aircraft than in 2006. Aer Lingus only had net cash of €653.9 million – 13.6% lower than the previous year and €149.1 million less than was stated in Barrington’s letter. Return on capital in 2008 was 9.5% compared to 19.6% the previous year.

The foregoing was clearly inconsistent with the results reflected in the 2008 Annual Report.

Q1 Jan-Mar 2009

In March 2009, the number of trips abroad by Irish residents declined by 15.4% compared to March 2008. Overseas visits to Ireland declined by 16% compared to March 2008.

	IRISH TRIPS OVERSEAS	TRIPS TO IRELAND	Great Britain	Other Europe	North America	Other
Jan – Mar 2007	1,575,200	1,478,300	771,500	496,400	156,200	54,300
Jan – Mar 2008	1,762,500	1,542,200	849,500	480,200	155,900	56,700
Jan – Mar 2009	1,539,800	1,402,200	772,400	488,700	142,200	48,800
					Source	CSO

The first quarter 2009 commentary on Aer Lingus results disclosed:

	2008	Q1 2009 (v Q1 2008)
Revenue	5.6%	-16.0%
Cash	€653.9 million (€757 m on 31 Dec 2007)	€593.6 million
Passenger Numbers Long-haul Short-haul	7.5% 2.3% 8.3%	-6.5% -5.57% 12.5%
Passenger Load Factor Long-haul Short-haul	-2.6% 5.0% -0.7%	2.4% 1.4% 3.2%
Revenue per passenger	€115.13
Capacity (available seat kilometres) Long-haul Short-haul	14.7% 13.0%	-19.5% -4.5%
Average Fare Long-haul Short-haul	2.6% -6.4%	-1.6% (Jan, Feb); -23.6% (Mar) -14% (Jan, Feb); -25.7% (Mar)

The principal operating costs at Aer Lingus are fuel (29.2%), staff (24.3%), airport charges (17.7%) and maintenance.

It is noteworthy to reflect on who has gained and who has not as a consequence of this IPO.

Chairman

The emoluments of John Sharman, former Chairman of Aer Lingus increased from €57,000 to €86,000 in 2006 to €175,000 in 2007 and €175,000 or the Jan-Oct period 2008 when he resigned. He also received €272,000 in executive compensation in 2005.

Chief Executive

The cumulative net profit at Aer Lingus for the years 2004, 2005 and 2006 was €158.55 million and the former chief executive, Willie Walsh, received cumulative emoluments during these years of €1,572,000.

The cumulative loss at Aer Lingus for the years 2007, 2008 and 2009 was €72,17 million and the now former chief executive, Dermot Mannion received cumulative emoluments of €2.995 million from 8 August 2006 to 31 December 2008. Mannion resigned on 6 April 2009.

Professional Advisors

Fees connected with the IPO were €29.74 million. Fees to defend the first Ryanair bid in 2006 were €24.07 million and fees charged to date in connection with the 2008 Ryanair bid were €5.84 million. The total spent, €59.65 million, would have reduced post-IPO losses to €12 million had this expenditure not been incurred.

Long-haul Customers

1,118,000 customers paid an average fare of €280.90 in 2006. 1,264,000 customers paid an average fare of €304.49 in 2008 but by March 2009 the average fare on long-haul declined by 25.7%

Short-haul Customers

7,513,000 customers paid an average of €90.99 in 2006. 8,737,000 customers paid an average fare of €87.75 in 2008 and by March 2008 average fares on short-haul declined by 23.6%

Employees

Are Lingus employed 6,833 in 2001. The number employed in 2008 was 4,035, having recovered from a low of 3,475 in 2005. The number of aircraft increased from 35 to 42 since the IPO. €117.5 million was spent on early retirement, voluntary severance and migration schemes in 2008. The number employed actually increased by 130 between 21 December 2007 and 31 December 2008. Savings of €52 million are anticipated in return.

Shareholders

Float price €2.20; current price €0.59 (May 2009).

Social Partnership needs an urgent reality check if its legacy is not to be ‘a one-trick pony’

Peter McLoone, General Secretary of IMPACT and chairman of FÁS (2006-2010), warns of an ‘abyss’ as the social partners are “staring failure in the face”. Would this not suggest that it is time to restate the fundamental objective of partnership in the context of prevailing circumstances and a Live Register that has increased by well over 100% in twelve months?

We cannot spend our way out of recession - even if this is a classical economic response to reigniting an economy. We cannot subsidise our way out of difficulty either. The Government faces the prospect of only being able to fund 53% of what in intends to spend in 2009 out of what it is likely to earn in 2009. Personal debt, at €172 billion, is well in excess of what is prudent and a by-product of housing bubble where buyers bought houses at the equivalent of up to 15 times their household income. We cannot tax our way out of difficulty because that aggravates the basic problem rather than ameliorates it.

We are told that when an international recovery becomes evident that we can aspire to an ‘export-led recovery’. But what will the components of this be?

There have been many own-goals that contribute to current difficulties and one of these is the erosion of competitiveness. Many cliché-laden tomes have been published commenting on this but little action has been taken to improve matters.

If social partnership has any real purpose surely that should relate to enhancing national competitiveness.

If the process is to degenerate into a bidding process where each of the social partners are essentially seeking parity of subsidy (€1 billion ++) for their particular constituency, it is hardly worth the cost of the Pledge furniture polish the maintain the talks table.

Can partnership offer anything that will stimulate economic recovery and growth or is it merely a subsidy -dispersing talk-shop with each stakeholder reduced to seeking parity of resources? Is the suggestion that the national Partnership process in its current form maybe faltering really such a bad thing?

Social Partnership has been in existence since 1987 and has accomplished a great deal. It brought the industrial relations process to a more sophisticated and far reaching level and its impact extended beyond bilateral industrial relations matters to encompass the perspective of farmers, construction and the voluntary sector. It reduced the incidence of days lost through strikes (4,179 in 2008, 6,038 in 2007) to provide me and thousands of beneficiaries with a sense of enhanced prosperity that are now illusory as a consequence of the financial crisis and especially that element of it that is attributable to an absence of economic leadership and direction in Ireland. We now realise that a society cannot be economically sustainable on the basis of its citizens buying poorly constructed houses in out-of-the-way locations for 15 times their annual income when they ought to be able to do so for three times their annual income. The fault lines of voodoo economics and its first cousin, leveraged investment, have been brutally exposed.

However, the process has been defined by the stakeholders in the one-dimensional direction of being able to deliver incremental financial benefits to their constituencies. We are in an environment where the Government is intending to spend €63 billion out of a potential income of €34 billion in 2009.

The last time that Ireland operated with the level of tax revenue anticipated this year was in 2003. The following gives a high-level glimpse of how fiscal circumstances 2009 compares with those of 2003:

	2003 € 000	2009 € 000
GDP at current market prices	139,097	Est 168,000
Expenditure Department of Social & Family Affairs Department of Community, Rural and Gaelteacht Affairs Department of Enterprise, Trade and Employment Expenditure % GDP FÁS	5,611 257 1,025 6,893 4.9% 823	21,271 476 1,449 23,196 13.8% 1,080
National Debt Cost to service National Debt	37,610 2,276	Mar 54.245 2,108
Surplus (Deficit) on current account Surplus (Deficit) on capital account Exchequer Balance	3,685 -5,554 -1,869	-6,093 -8,698 -14,791
Live Register Unemployment	166,142 4.6%	384,448 Apr 11.4%

The foregoing does not take into account the implications of redeeming our zombie bank sector. The recent US announcement that tests to of the capacity of leading American banks to survive an economic downturn will require to raise the level of core capital by collectively raising $75 billion in new equity and to maintain a higher ratio of core capital. Irish banks do not have a high level of core capital by international standards. If they are to compete for new equity with American banks they will be judged adversely for the inadequacy of their core capital in the context of these higher norms.

ICTU and IBEC have each advocate spending initiatives costing €1 billion plus to respond to their individual constituencies. Who is going to pay for this against this fiscal background?

A consequence of partnership since 1996 is the erosion of Ireland’s competitiveness and this has resulted in the benefits that recipients thought were assured were in fact unsustainable.

The most recent quarterly report from the Central Bank demonstrates how this has come about:

	1990	1996	2009
Ireland: average hourly earnings	82	100	196
Major trading partners: average hourly earnings	80	100	156

Our labour force in December 2008, 2.28 million was 17,200 lower than a year earlier. Unemployment increased from 101,500 to 170,700 in this period. The participation rate in the workforce dropped from 65.1% in December 2007 to 54.1% in December 2008. The index for modern industrial production at December 2008 was 152.5 compared to 173.8 in December 2007, a downturn of 12.3%.

Many of the multinational businesses operating in Ireland have established positions in developed countries. Some are seeking growth in emerging countries which account for 85% of the world’s population and more than 50% of potential worldwide GDP growth. Can Ireland offer products and services to these markets and be competitive in doing so? When this recession eases and new businesses begin to emerge across the world they will seek lower barriers to entry and affordable technology. Will Ireland have anything to offer them and will the advantages be sustainable?

If economic recovery in Ireland is predicated on exports can partnership contribute to Ireland becoming sufficiently competitive to achieve the earnings and the tax revenue to pay its way, or is it incapable of doing so?

A second issue concerns leadership. McLoone, in his remarks to the IMPACT biennial conference on May 8^th also stated with his chairmanship of FÁS, “when the heat came on”, in relation to the spending controversies, his initial reaction was to walk away. He also stated that trade unions had no influence in the State’s key economic agencies. Power comes to those who seize it and use it. To suggest that the chairman of a State agency with a budget north of €1 billion is disingenuous.

A crisis need stellar leaders, not fair weather friends. Can the social partners provide this or are they merely capable of cheer-leading to the most short-term postures of perceived influence?

To summarize: we cannot subsidize our way to recovery; we cannot tax our way to recovery and we cannot spend our way to recovery. But we can compete our way to recovery and we can only prosper to the extent that we can pay our way. The alternative is that the economic management of the nation is outsourced and the vested interests are rendered truly impotent.

Name recognition in Irish politics

Research published by the ESRI last week has revealed that individuals whose names do not have a traditional Irish identity are twice as unlikely to be called for a job interview when they respond to a job advertisement, even if their qualities and qualifications match in all other respects those of a native respondent.

Name recognition is also an important consideration in politics. Sometimes it is the very uniqueness of a name that is important. Take the US presidency, for example. How many times have you hear the name Eisenhower, Roosevelt, Obama being borne by anyone other than His Excellency, the President of the United States? Mhoosajee Bhamjee was also a mould breaker when he won a Labour seat in Clare in the 1992 landslide election for that party. He is also the only Muslim elected to the national parliament.

Name differentiation can help to differentiate an incumbent from an aspirant in the voters mind but it can also cause political inbreeding, inertia and all of the infertile appalling consequences that ensue from this. “if there is a problem it is attributable to something far away”

It will cost over €137 million to run the Leinster House enterprise in 2009 – 44% more than it did just five years ago borne by the same headcount of politicians. There is no question of our democracy being run on a shoestring but it is important to maintain a sense of perspective and insight.

There are a total of 226 members in the two Houses. The annual overhead is just shy of €607,000 per member, – excellent value when considered as being merely one quarter of the 2008 remuneration of the abundantly superannuated Mr. Michael Fingleton, whose self-indulged, loss-making, speculators’ enterprise the taxpayer is now expected to bail out!

Apart from their own salaries, which cost €22.7 million, a further €18.7 million will be spent on secretarial support. A sum of €6.4 million is spent on travel which works out as an average of almost €44,000 per Dáil Deputy and €31.500 per Senator.

There are no fewer than 92 members of the 30^th Dáil who bear the same surname since the first Dáil met on 19 January 1919 and the first Seaned met on 11 December 1922.

Many are blood relatives or descendants but some bearing the same surname have no direct relationship to each other. There are others who are related to each other but do not share a similar surname.

The surname among the 20 most popular Irish surnames that has had no bearer in the Houses of the Oireachtas is the name Murray.

There have been 20 Ryans’, 16 Lynches, 16 Byrnes’ and 14 O’Sullivans’ who have represented the nation.

There have also been 11 Kennedys’, 10 O’Reilly’s, 10 O’Briens’, 9 Collins, 9 Doyles’, 9 O’Connors’ and 9 Higgins’.

The presence of Bradys’, Burkes’, Hogans’ and Hayes’ was made 8 clan members.

The remaining surnames with multiple appearances in the Oireachtas are:

2	3	4	5	6	7
Bruton Burton Cowen Cregan Cullen D’Arcy Deasy Dempsey Devins Dooley English Enright Fahey Ferris Flanagan Fleming Gogarty Gormley Killeen Naughton O’Dowd Roche Sheehan Sherlock Timmins Tracey Upton Wallace White Woods	Aylward Brennan Calleary Conlon Flynn Hanafin Haughey Kitt Martin McEllistrim McGinley Mitchell Moloney Mulcahy Noonan O’Dea O’Rourke	Allen Ahern Andrews Breen Browne Carey Coughlan Kenny Lenihan McGuinness McHugh Moynihan Nolan O’Donoghue Power Smith Wall	Barrett Costello Fitzpatrick Kelly O’Keeffe O’Mahony	Ahern Healy Quinn	Gallagher McGrath

Dublin by-elections: Is it time to vote NO to nepotism, cronyism and political inbreeding?

 

 

 

 

Is the current economic crisis in Ireland also a demonstration of Irish society being suffocated by political in-breeding? I watched a report on the RTE News last night (Thursday, May 7th) which featured the candidates contesting the by-elections in Dublin South and Dublin North-Central. Fianna Fáil has chosen Maurice Ahern, an outgoing Dublin city councillor and former Lord Mayor of Dublin, as their candidate. He is also the older brother of the local ward healer, Bertie Ahern and is to fight an election apparently to be funded by a €40,000 loan repaid by Bertie’s former lover and national ‘meet and greet’ person, Celia Larkin, who had been provided with a ‘dig-out’ by the constituency party machine, unknown to many of its members until this was disclosed at The Mahon Tribunal.

Maurice is 70 years of age so he has enjoyed the freedom of a bus pass for 4 years. How many 70-year olds could win a Dáil election nomination if they did not enjoy the nepotism of a powerful relative? If this man has grandchildren would he not be better spending his time engaging with them, enriching their lives and enjoying the fitness and wellbeing he enjoys instead of attempting to develop a career in national politics? Surely it is time for a generational change after 31-years of Bertie’s incumbency.

The Fianna Fáil candidate chosen in Dublin South is Shay Brennan, the son of the late TD, Séamus Brennan. Shay works at Anglo Irish Bank and was reared in a family where his father made his mark in national politics at the tender age of 24 when the Jack Lynch selected him in 1973 to be General Secretary of Fianna Fáil. He succeeded deValera’s appointee, Tommy Mullins, one of the old guard who served in this role for 28 years from 1945. Séamus Brennan was charged with executing a generational transformation and modernising Fianna Fáil. He was a Jack Lynch nominee to the 14th Seanad in 1977 but a critical element of the Brennan transformation of Fianna Fáil was securing a Dáil seat for himself in Dublin South in 1981.  He retained this until his death in 2008 and held various ministerial offices since 1987, an era dominated by the Brennan-Kitt franchise and birthright.

If I was in Shay’s shoes, employed in Anglo Irish Bank, coping with the flak and turbulence that prevails there and the enquiries of the Garda Fraud Squad, perhaps I would, too, emulate what he is attempting. After all, the apple doesn’t fall far from the tree, according to the adage and if the people are docile enough to support me why not give it a lash?  If the son of his father’s colleague, the late Brian Lenihan, made it to Minister for Finance and his other son has a cushy, undemanding chauffeured sinecure as Minister of State, he too might feel that air of invincible entitlement that comes with political pedigree. Why would he not feel his future would be more inspiring and rewarding as a potential Minister for Finance, calling the shots and negotiating coalition deals instead of hosing the latrines in St Stephen’s Green and enduring the slings and arrows at Anglo Irish Bank?

There are now 36 members of the current Dáil who have succeeded a parent, spouse or grandparent in national politics and that includes five members of the Cabinet (Cowen, Coughlan, Lenihan, Hanafin, and O’Cuív) and five of the twelve Ministers of State (Andrews, Brady, Calleary, Haughey and Lenihan) – also known as the slimmed-down team. Then there are others who have wives, lovers, sons, daughters and in-laws working for them as administrators or drivers paid for by the taxpayer.  One Minister of State defended this practice on the grounds that the confidentiality of his phone calls when being driven might be vulnerable if he were to be driven by a member of the hoi polloi.  I realise how important it is to protect and defend intellectual property but is this not a bit overweening?

What is wrong with in-breeding and nepotism? Those who enter cats in shows place a huge focus on their pedigree as do people who are involved with thoroughbred racehorses. Pedigree breeds do not evolve randomly as a natural population would. They are developed and nurtured on the basis of particular criteria. The objective is to attempt to reproduce a particular physical characteristic. But there is no guarantee that if two closely related cats, for example,  breed that their kitten will actually inherit the desired characteristics but they could very easily inherit severe disadvantages.

Inbreeding in humans or, indeed, in plants creates a similarity in the DNA sequence that can create a genetic disorder, impair the thought process and reduce the fitness of the specimen concerned. They also have a slower growth rate and achieve a smaller adult size.  Do you see any evidence of this in the body politic?

This country is overwhelmed by economic problems associated with political disorder and dysfunctional behaviour. The economy has been allowed to career out of control like a high-speed vehicle that has no brakes, coolant or spare wheel. The current Taoiseach, Brian Cowen, succeeded Charlie McCreevy as Minister for Finance in September 2004. Many of the current failings are blamed on McCreevy.

It was he, for example, who instituted the office of Financial Regulator that has been shown to be comprehensively ineffective, light-touch and useless, led by a person at that time who, nudge-nudge, is now a board member of several banks, one of whom, Irish Life & Permanent Plc is dependent of the beleaguered taxpayer for support. The same person is also in charge of the CARB, the regulatory body that is supposed to keep the bean-counter antiseptic and fit for purpose. But the CARB is investigating the bank that its chairman is a director of and the individual concerned is going forward for re-election to the board of Irish Life & Permanent Plc at its AGM on May 13^th. The cumulative annual reward for these directors was €934,000 in 2008 - €25,000 more than in 2007 because they were so exceptionally effective.

It was also McCreevy who inaugurated single-handed the Decentalization Programme in the public service whereby those transferring to backwater provincial hamlets would suffer the scourge of local property interests that a bonanza confers.

Cowan is a bright man supported by a delightful close family. But he is also the admiral of the fleet that hit the rocks and is listing aggressively. What could have done to avoid this crisis? A compass would have been handy and a flashlight would not have been out of place either. He could have kept an eagle eye on the escalating level of private sector debt and moderated the increase of this. When he engaged in partnership negotiations he could have flagged the impact of outcomes on our international competitiveness. 

I have heard Sweden being cited as a role model in the context of dealing with our banking debacle. Private sector credit in Sweden grew from 85% to 135% of GDP in the five years prior to the bursting of their construction bubble. Private sector credit in Ireland grew from 136% to 217% of GDP in the five years before our construction bubble burst. The voters would have preferred an economic policy that would provide a sustainable standard of living with modest gains rather than what has actually occurred. Furthermore, this fecklessness was cooked up by a coalition of bankers and builders who saw nothing whatsoever wrong in giving out titanic loans to borrowers who never were in a position to discharge them completely and fully. The spectacle of Boucher, now in charge of Bank of Ireland, is an iconic emblem of what happens when cronies, bankers and political cliques become chronically dependent on each other.  He personally advocated the proposed Dunne development in Ballsbridge with the planning authorities.  He now has to advocate capital for his bank in competition with the leading American banks who are scouring the world for billions of € in new equity.

What is needed in a credible candidate for high political office these days? Eamon Ryan TD, Minister for Communications, Marine and Natural Resources appeared on a recent edition of the Late Late Show and made a perceptive observation about this. He said the system should be representative of the population as a whole, just like a jury. I agree with that but would add that qualities such as communications skills – which means a capacity to speak without cliché or profanity, integrity and intellectual curiosity are also important political talents. Evidence of potential political skills – policy understanding and advocacy and in the case of those charged with policy oversight and execution, an appropriate competency is mandatory.

The surprise decision by George Lee to stick his oar in on behalf of Fine Gael in Dublin South caught many off guard, including, it seems, his employers. He has a fine mind, a capacity to analyse complex problems that impact hugely on the public and communicate with ease.  His arrival has piqued the interest of voters.  But has George learned that when, in shopping centres, he embraces old ladies who are not wearing their false teeth, that he must not bruise their cheeks?

George’s participation in this election really puts it up to the Labour candidate, Alex White. His name has been floating around the periphery of public consciousness for some time but in a background ill-defined sort of way. Alex will need to shed the cloak of anonymity and emerge from opacity if he is to make his mark.

I also noted the Sinn Féin candidate in Dublin South, Shaun Tracey on that RTE News clip. His profile is so low I had to Google him several times to find his name, which was buried in a news story about George Lee. His own party web site doesn’t seem to claim him. Tracey was as inspiring as a random individual who repairs the punctured tyres of motor vehicles and didn’t seem to convey any inspiring wow factor whatsoever to the voters of Dublin South. The charisma and lucidity of Barrack Obama has eluded him.

The Green Party candidate, Elizabeth Davidson, seems to be getting some flak about the party participation in government.  My view is that political parties should be in existence to make an impact not to merely play a marginal, opposing role.  Politics is about achieving power and using power.  I think that notwithstanding the economic difficulties that the Green contribution to this government has been pretty decent.

The collective wisdom of electorates never ceases to amaze me. They rarely make random or unbalanced or primitive judgements. They collectively and seamlessly transfer their mandate from one generation to another, almost unprompted.  One of their considerations from now on maybe whether the birthright conferred by the Irish political parties has run its course and the noblesse oblige might be accordingly relieved of their intended destiny.  I fear Ireland will emulate African tribalism soon if inbreeding and nepotism is not curtailed.  The poverty component is already apparent, not just among the destitute but also among the concealed but overburdened coping classes.

Irish motorcycle sector holds the road!

There are approximately 38,000 motorcycles on the roads of Ireland. The motorcycle market in Ireland has shown more resilience than the private car sector as the country endures a crushing recession with retail sales lower overall by 21% in twelve months.

The total number of motorcycles licensed for the first time in 2008 was 7,511, a slight increase over the 7,420 licensed for the first time in 2007. Over half of these were used imports.

Motorcycling has become more popular in Ireland. The sales of motorcycles were 59,526 units between 2000 and 2008, compared to 22,674 units between 1990 and 1999.

There is evidence of significant change in the make-up of the Irish motorcycle market which is mirroring corresponding changes in the European Union.

Sales in Ireland of motorcycles with an engine capacity of over 251cc were 22% of the total between 2000 and 2004. The Government statistics were broadened in 2004 to provide greater detail of engine size and used motorcycles imported into the country and these show that there has been a definite swing in favour of heavier motorcycles. Between 2004 and 2008 almost 68% of the motorcycles licensed were over 251cc. The following table summarises the total unit sales between 2004 and 2008

cc	New Units Licensed 2000-2008	Used Units Licensed 2000-2008	TOTAL 2000-2008	% Total
0-50	4,036	271	4,307	12.3
51-125	4,179	668	4,847	13.7
126-250	907	1,271	2,178	6.2
251-600	1,671	4,825	6,496	18.5
601-1,000	3,506	6,728	10,234	29.1
1,000+	2,696	4,389	7,085	20.2
TOTAL	16,995	18,152	35,147	100

The following analysis of the brands licensed between 2004 and 2008 gives an insight into buyer preferences

Brand	New Units 2004-2008	Used Units 2004-2008	Total Units 2004-2008	Market Share (% Total Units)
Aprila	586	176	762	2.17%
BMW	1,366	1,360	2,726	7.76%
Ducati	247	0	247	0.70%
Gilera	355	27	382	1.09%
Harley Davidson	705	713	1,418	4.03%
Honda	3,423	7,152	10,575	30.09%
Hyosung	285	2	287	0.82%
Kawasaki	652	1,772	2,424	6.90%
Keeway	141	0	141	0.40%
Lifan	48	0	48	0.14%
MBK	297	4	301	0.86%
Peugeot	688	26	714	2.03%
Piaggio / Vespa	760	93	853	2.43%
Suzuki	3,296	2,614	5,910	16.82%
Triumph	117	233	350	1.00%
Yamaha	2,673	2,851	5,524	15.72%
Other	1,356	1,129	2,485	7.07%
TOTAL	16,995	18,152	35,147

The modern motorcycle industry in Ireland owes its origins to the Honda Super Cub which first saw the light of day in August 1958. The 50^th anniversary of its creation was celebrated last August. It has become the best selling powered two-wheel vehicle of all time achieving lifetime sales of 60 million units.

Developments in the European Motorcycle Market

According to data produced by acem, the representative body of European motorcycling, motorcycle sales in mainland Europe and Britain peaked in 199 when 2.7 million vehicles were sold. Sales slumped to under 2 million between 2000 and 2002 and there has been a modest recovery since then. The important markets are Germany, Spain, Italy and France. They together with the UK and Holland account for 90% of the market. Italy accounts for a 24% share followed by Spain (17%) and France (19%).

The popularity of mopeds and motorcycles has been transposed between 1997 and 2007, a trend that is also obvious in Ireland. Motorcycles now account for 63% of the market and mopeds 37%. There has been a steady decline in the popularity of mopeds although this has been arrested somewhat in 2005 but the drop in moped sales in Italy has been especially dramatic. The top-three countries for mopeds today are France (22%), Spain (20%) and Germany (17%).

The motorcycle segment has been on an upward trajectory since 1997 although the pace of growth moderated in 2001 and 2002. Italy, Spain and France have shown strongest growth while German motorcycle sales have tapered. The five countries which account for 80% of the motorcycle market are Italy (29%), Spain (18%), France (16%), Germany (11%) and the UK (8%). The 125CC segment is that fastest growing but all CC segments have grown strongly. Today there are 30 million motorcyclists throughout the 27 countries of the EU.

The heavy motorcycle segment (651cc+) achieved sales of 393,300 in Europe in 2008, an increase of close to 50,000 over 2007. Harley Davidson has been making steady progress in Europe having steadily increased its market share from 6.1% i(20,471 units) n 1999 to 10.3% (38,900 units) in the heavy sector.

Honda sold 313,000 motorcycles in Europe in 2008 out of a total output of 9.3 million vehicles.

BMW sales of motorcycles dropped from €345 million in 3 months ending 2008 to €290 million in the 3 months ending 31 March 2009. But, unlike its automobile business BMW motorcycles were profitable, earning a return on sales on 9% in this period.

Irish immigrant population hit very hard by slump

The Irish Live Register for April 2009 recorded a record of 384,448 individuals, an increase of 188,850, or 97%, since April 2008, according to data from the Central Statistics Office. All immigrant groups have been hit hard but those who immigrated to Ireland from the states that joined the European Union in May 2004 have been hit especially severely.

There are 349,300 non-Irish nationals in the labour force. They comprise 15% of the 2.2 million Irish labour force. The April Live Register includes 77,850 non-Irish nationals – 22% of the total on the Live Register.

Some 44,727 are from those states that joined the EU in May 2004 – Bulgaria, Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania and Slovakia (collectively known as the Accession states EU15 to EU 27). These immigrants account for a labour force of 167,800, of whom 26.6% are now on the Live Register. They were attracted to Ireland by a minimum wage of €8,65 ($11.57) per hour from 1 July 2007 that is guaranteed under the Irish National Minimum Wage Act 2000. The corresponding figure in the UK is £5.52 (€6.21 or $8.31).

The Live Register is not a direct measure of unemployment. It also includes part-time workers who work up to 3 days each week, seasonal and casual workers eligible for a Job Seekers Allowance or Benefit.

However, overall unemployment in Ireland has also risen sharply from 93,400 in February 2007 to 170,600 November 2008 and 40,500 or these are defined as long-term unemployed. The number of unemployed from the Accession states is 16,900, a rate of over 10% and an increase in the number unemployed of 7,500, of 80% more in twelve months.

It is estimated that 210,000 people from Accession states arrived in Ireland since 2005. Three quarters of those who found work were employed in construction, manufacturing and service sectors, such as retail and hospitality. The total number employed in the public sector, education and health is low in comparison. The largest immigrant cohort is from Poland, but there are significant numbers from Latvia, Lithuania, Czech Republic and Estonia. Lithuania and Latvia are currently recording the highest levels of unemployment in the EU. Unemployment in Lithuania increased from 4.3% to 15.5% in the 12-months to 30 April 2009 while unemployment in Latvia increased from 6.1% to 16.1% over the same period. Unemployment levels in Poland has remained relatively stable moving from 7.4% to 7.7%.

This group comprise people predominantly aged in their twenties and thirties and tend to be male with the gender disparity most pronounced among the younger age group. There are relatively few children, or elderly people, among this immigrant group. Despite their relative youth, 42% are married compared to the 46% marriage rate of the native Irish. But almost 20% of the married non-nationals are not living in Ireland with their spouses. Their spouses have typically remained in their native land and this replicates the emigration pattern from Ireland over the decades before economic self-sufficiency. The majority of the immigrants from the Accession states have a secondary school education and slightly over a quarter have a third-level qualification.

The largest decline in employment in Ireland has been in the construction sector and the professions that serve it –(- 45,900) jobs lost in one year. But there have also been significant job losses in wholesale and retail (-18,200), financial and business services (-11,600), hotels and restaurants (-10,500).

Non-Irish nationals are obliged to be habitually resident in Ireland to qualify for social assistance payments in Ireland. The term ‘habitually resident’ is not defined by either Irish or EU law. However, it is intended to convey a degree of permanence – a regular physical presence enduring for some time beginning at a time usually in the past and intended to continue for a period into the foreseeable future. Length and continuity of residence are vital considerations

Non-Irish nationals resident in Ireland can qualify for social insurance payments (e.g. state pension, jobseekers benefit), means tested payments (e.g. jobseekers allowance) and universal payments (e.g. child benefit). 300 extra staff have been transferred from within the civil service to the Department of Social & Family Affairs to deal with the extra welfare claims.

Research published by the Economic and Social Research Institute indicate that non-Irish nationals are facing discrimination when responding to job advertisements with similar creden tials as an Irish native.

Obama's international tax proposals introduced

President Obama celebrated his first 100 days in office on 30th April and what a breath of fresh air he is to the political process and how enhanced the stature of the United States is throughout the world as a consequence.!

Both he and his wife Michelle are magnificent representatives of the United States. Each has a unique capacity to reach out and really touch the soul of so many people across the globe.

My youngest daughter, Susan, spent last summer working on the Obama Campaign in Santa Barbara California. While Susan is the child and grandchild of people who have a keen interest in the derring-do of politics she never displayed these instincts until last summer. She is thrilled by the humanity and sense of purpose of the President and Mrs Obama

He certainly cannot be accused of being a slouch or neglecting the fundamental interests of the American people. Yesterday he addressed the very complex issue of international taxation with the intention of rectifying aspects of the system he considers need to be rectified. The President did not indicate that he intends seek the abandonment of deferral arrangement but to streamline them and eliminate abuses. The deferral principle means that a company is not liable to 35% US corporate taxes until profits are actually repatriated to the US. If the deferral arrangement was abandoned US companies would be exposed to double taxation of overseas earnings and this would adversely impact their competitiveness.

Three facets merit attention.

• A facility which allows American companies that at present allows the deduction of expenses incurred outside the US to be set against its American tax liability from income that has not been repatriated to the US is likely to be stopped. An example could be interest on debt used outside the US. He wishes to end this mismatch.
  
• A second facet of his proposals concern American companies who can offset taxes paid outside the US against their American tax liability by using foreign tax credits and this is also likely to be curtailed. However, if transnational research is being undertaken that confers benefits on the US an exception maybe allowed.
  
• A third facet concerns what are known as ‘check-the-box’ rules that deal with the way that companies report the movement of funds between group subsidiaries. Subsidiaries maybe treated as discrete entities for tax purposes under the proposals rather than part of the same group as is the case now.
  
• Information sharing will be enhanced as will reporting standards so as to curb personal tax evasion
  
  

Ireland has a keen interest in this agenda because of the large and thriving population of US companies operating here under the auspices of IDA Ireland. Ireland is not, however, a tax haven. The list of American companies who choose Ireland as their European home-from-home are entities with real substance employing in excess of 50,000 people and conferring a host of competitive advantages apart from taxation. Ireland, for example, is the only English-speaking €-zone country. It is an agile and open economy with decades of experience in hosting American businesses making their mark in the 500-million European Union market. It is fair to say that Ireland and the American businesses located here have enjoyed a dynamic, fulfilling and mature relationship over many decades.

The President, in his quest to have a tax code that is appropriate to the needs of America cited an instance of an office building in the Cayman Islands which is headquarters to over 12,000 businesses! He can also be assured that Ireland is not a mail-box economy!

These proposals require Congressional approval. International tax is naturally linked to international trade and trade issues instantly arouse interests, passions and prejudice. America’s role in world trade is no longer isolationist as it between the World Wars. The business community will analyse any proposals and respond in what they believe to be their enlightened self interest. Detailed legislative proposals are not anticipated before 2011.

Dublin Euro election campaign picks up pace.

There are 32 days remaining to the Euro election on June 5th. Opinion polls are beginning to reflect the sentiment of a changing mood among the electorate. There are 9 candidates in contention, the latest being Patricia McKenna the former MEP and Green Party member.


The Redc national poll on 23 April asked:

if there was a European election tomorrow, which party, or independent
candidate, would you vote for?

The result was charted against the national outcome in the 2004 Euro poll and the findings were:


2004 Euro Poll -- Voting Intentions, Apr 2009

Fianna Fáil 29%, 25%
Fine Gael 28% , 32%
Labour 11% , 17%
Sinn Féin 11%, 8%
Greens 4%, 7%
Libertas 0%, 2%
Others 17%, 10%

The Red C 2009 figures actually add to 101% - presumably allowing for statistical rounding.


If the Redc poll national trend on Euro voting intentions was to be applied to Dublin and the opinion swing nationally was to impact in a similar pattern in Dublin an interesting pattern evolves. The quota next month will be 25% of the valid poll because there are just 3 seats instead of the current 4. If the valid poll next month is similar to the valid poll in 2004 there will be about 420,000 votes and a quota of the order of 105,000, an increase of 21,000 over the last Euro election. The following pattern might emerge:


Fianna Fáil


The incumbent MEP, Eoin Ryan and his running mate, Royston Brady, polled 97,750 votes in 2004. The corresponding figure this time maybe closer to 84,000, but will the party pick up sufficient transfers to bridge the gap? Fianna Fáil voters don’t normally transfer to other parties and there might be difficulties for them in securing transfers.



Fine Gael


Gay Mitchell, the sole FG candidate and outgoing MEP, won 90,749 votes in 2004. The opinion polls would suggest that Mitchell, again the sole candidate, could make quota. This would be a formidable accomplishment given the fragmented impact of Fine Gael in Dublin and the absence of Dáil representation in three Dublin Dáil constituencies.



Labour


Labour and the parties that lean towards Labour have polled will in each of the European elections since 1979. deRossa is the sole candidate this time. His running mate, Ivana Bacik, polled 40,707 votes in 2004 eclipsing the incumbent Green MEP, Patricia McKenna. While deRossa is not a familiar figure in many parts of the Dublin constituency, especially in the south-side, the surge in Labour popularity could see him comfortably make quota and become the catalyst in deciding the 3rd seat.



Greens


The Greens are enjoying favourable polls, having won 4% in 2004 and picking up support in 2009 may lay the ground for them to win over 50,000 votes if there candidate, Déirdre de Búrca makes sufficient impact.



Sinn Féin


The 11% of the poll won in 2004 is morphing into 8% national support in the Red C poll. McDonald won 60,395 votes in 2004 which was quite a feat at that time. But the weak performance in the 2007 General Election imply a trend of waning support and current poll trends would imply that next month’s election will yield 40,000+ votes – perhaps in the mid 40’s. If the mood of the electorate becomes more favourably disposed towards The Lisbon Treaty, as Redc poll suggest, this would put McDonald on the losing side and the incumbent MEP to disappear.


Libertas


If they win 2% of the vote in Dublin as the national opinion poll implies that would be equivalent to about 8,500 votes. Their candidate has no profile whatsoever and over the past 20 years the Dublin electorate has been slow to embrace strangers!


Socialist


Joe Higgins polled over 23,000 votes in 2004. He and his running mates polled 11,500 votes in the 2007 General Election. He lost his Dail seat in 2007. As a TD and leader of a parliamentary party he recevied an annual allowance of €64,210 in 2006 but this was reduced to €22,408 in 2007. It is expensive to fund an election campaign and the absence of this allowance will not make it easier.

Others

The former MEP, Patricia McKenna, has announced her intention to run as an independent candidate. Formerly a member of the Green Party, she lent her shrill and strident voice to the No campaign when The Lisbon Treaty was held last year. She was beaten in the 2004 Euro election by Mary Lou McDonald despite securing 40,000 votes after two terms in Europe and would seem intent on at least being a spoiler of McDonald's chances this time. "Hell hath no fury like a woman scorned"! Her emergence may cajole to current Green Party candidate, deBurca, to come out of hiding and make an impression on the voters before it is too late.

Non-aligned candidates polled 6,200 votes in the 2004 election. There are no such candidates in this election. The field of 8 candidates is the smallest since direct Euro elections were inaugurated in 1979. The Progressive Democrats no longer exist. They did not field a candidate in 2004 so their legacy support base will find expression and is likely to scatter across the established parties with Fine Gael and Greens probably being the main beneficiaries.

The Irish motor industry is on Skid Row

The Irish motor industry has somersaulted onto Skid Row ensnared by the barbed wire of constrained credit, high and increasing levels of unemployment, shrinking family income, higher income taxes and fundamentally altered buying patterns. The car buyer is sovereign again and demands value and a high level of customer service.

Sales of new private cars in Ireland in the first quarter of 2009, 27,140 units, were one third lower than in the first quarter of 2007, according to CSO data. But the real twist in this saga is the soaring increase in imported used car. The average annual number of used vehicles licensed for the first time in Ireland between 2000 and 2004 was under 17,500. But the number of used card licensed for the first quarter of 2009 was 15,455 – almost 57% of the number of new cars bought and licensed in the country. A used car, for Revenue assessment purposes, is a vehicle over six months old. Years ago Irish buyers had a penchant for used cars imported directly from Japan but the current trend is underpinned by imports closer to home.

No sector, apart from property, was more central to the thrust of the Celtic Tiger than the motor industry. Sales of private cars between 2000 and 2008 exceeded 1.49 million units, equivalent to an average of 165,000 per year. Sales of prestige and cars with an engine capacity greater than 1600cc increased as a percentage of the total from 21% in 2000 to 32% in 2007. This was quite an accomplishment for a country with a population of 4 million.

Unit sales of private cars for the 9 years to 2000 were 901,700. Average annual sales of private cars in the early 1990’s were under 72,000.

There are obviously value considerations supporting these developments but price is only one aspect of value, service and customer response to this is the other.

Bad Dealer Service in Dublin

Last week I had a conversation with a colleague, Orla, about her recent car buying experience. She and her husband, George, are car buffs and take exceptional care of their vehicles. Orla wanted to buy a new BMW. Her first step was to visit the Dublin-based BMW dealer from whom in 2005 she purchased a new BMW and who serviced it. The patronising attitude of the salesman appalled her. He insinuated that there appeared to be a shading inconsistency on the bonnet, perhaps caused by a collision. The car had never been in a scrape but Orla was quickly coming to the opinion that this salesman was attempting to engineer a proposition which would be more attractive to him than to her. Orla decided that there were no circumstances that she would buy a new car from this dealer.

She travelled to Isaac Agnew Belfast and the outcome of this exploratory visit was that she purchased her new, but 6-month old 2008 BMW, there. The transaction was conducted in a professional, painless and convenient style and there were gestures of goodwill too.
George and Orla travelled by train to Belfast the day they collected the car. They were met at the station by the dealer’s representative and when Orla collected her new car she was also presented with a beautiful bouquet of flowers and a full tank of petrol. Orla is a happy customer driving a car with a higher specification than she could afford in Dublin. But is her approach to buying a BMW isolated?

Frankly, no! BMW sold 2,529 new cars licensed for the first time in Ireland in the first quarter of 2007. The corresponding figure in first quarter of 2009 was 736. Some 1,208 used BMW’s were imported into Ireland in the first quarter of 2008 which means that there were 3,707 drives of BMW’s new to them in the first quarter of 2008. There were 1,889 used BMW’s imported into Ireland in the first quarter of 2009 which means that there are2,625 drivers of BMW’s new to them in Ireland – 29% fewer than a year earlier. But 71% of these purchased their BMW elsewhere.

A similar trend to this prevails in Ireland in the case of Audi, Lexus, Land Rover and Volkswagen, to mention just a few.

The BMW Quarterly Report to 31 March 2009 reveals that its automobile division had a 21% downturn in sales compared to the same period in 2007 and delivered 49,808 fewer vehicles in Europe (169,520 in Q3 2009 compared to 219,328 in Q3 2007). Apart from BMW vehicles, the Group also sell Mini and Rolls Royce cars.

Good Dealer Service in Dublin

I have a friend, John, in Glenageary who is now retired but once worked in an industry allied to the motor business. When John intends to buy a consumer durable the depth of his research beforehand amazes me. His background evaluation is methodical and thorough. He taste in cars varies and he has never been persistently committed to one make. He has driven Triumph, Fiat, Nissan, Mazda, Opel, Volvo and Peugeot over the years.

He now drives the first 2009 registered cars that I noticed this year but it was the third week of January when it appeared. His choice this time is a Skoda Octavia which he purchased from a local main dealer who offered a proposition that pleased him greatly.

Skoda is a minor player on the Irish car market but this brand has maintained its 4% market share this year and last. There were 116 used cars imported in the first quarter of 2008 and 2,220 bought and licensed here. This year there were 257 used Skoda imports and 1,194 sold and licensed here in the first quarter. There are 1,451 driver of Skoda’s in Ireland that are new to them in 2009 and 17% of these bought their Skoda elsewhere, compared to 71% of the 2009 BMW drivers.

Would this not mean that the Skoda dealer is more successful winning the trust and confidence of their buyers than their BMW, Audi, Lexus, Land Rover and Volkswagen counterparts? I don’t know but many of these car manufacturers dumped the local dealers and started to sell directly in Ireland in recent years. Perhaps the Irish car buyer prefers the old dog for the long road!

US Auto Industry meltdown

The Irish Times ‘Business This Week’ section last Friday reported the ‘end of the road’ for Chrysler as it filed for bankruptcy protection. I recall being in Cape Cod Massachusetts on 21 July 1969 at what is now the Highland Museum and Cape Cod Light when Neil Armstrong and Buzz Aldrin landed on the moon. At that time Americans defined themselves by the models of true-blue Michigan manufactured car they drove as well as exulting in the accomplishment of Armstrong and Aldrin. The throaty roar of the Ford Mustang was the icon of aspiration!

It amazes me that the Japanese car manufacturers’ ever gained a foothold in the American market. Toyota made its debut in 1957 and Honda in 1963, while Soichiro Honda, the founder of the famous brand was still active in the business. I lived in Boston between 2000 and 2005. There was not a single car listed in the ten most popular manufactured by one of the top-3 traditional US manufacturers. The big-3 have seen their share of the US vehicle market drop from 85% to 43%.

When Charles Wilson, the president of General Motors appeared before Congress in 1953 in connection with him becoming Secretary for Defence (1953-57) he was asked if there was a conflict of interest. He responded that “what is good for America is good for GM and vice versa”. The market capitalisation of GM in 2000 was €50 billion. The market capitalisation in March 2009 was under €830 million – slightly less than the current market capitalisation of AIB.

The downfall of these titans is attributed to poor strategic decision making. Swaggering, but baseless confidence, hubris, lack of courage, foolish decisions made and critical decisions avoided are features of this. Will the Irish motor industry learn from this or will inertia prevent them from doing so?

The Irish Government is also feeling the pain. Excise duty receipts for the first quarter of 2009 are €450 million lower than the first quarter of 2007 and VAT receipts are €600 million lower for the same period.