Michael O'Leary's Theories

stepster

A very interesting article in the indo today.

http://www.independent.ie/national-news/oleary-blasts-at-stupidity-in-civil-service-and-dail-1782454.html

I quote from the article:

I fear the whole weight of stupidity in the civil service and within the Department of Finance at the moment, and within a lot of the media commentary which consists of 'let's increase taxation as a way out of a recession'. We tried that in the Seventies and it failed. We tried it in the Eighties and it failed and in the Sixties. It's always failed. "The only way out of the mess this country is in is to radically cut the waste in public expenditure and reduce taxation. Not on rich people like me. Increase taxation on the rich, there's so few of them who are resident, it doesn't f***ing matter anyway. But you must reduce taxation on middle Ireland," he says.
When it comes to finding the money the country so desperately needs, his advice is, as he puts it, "very simple".
"This Government, what they should do, is set out a plan to take about five to 10 billion of spending out of the public sector and face up to hard decisions. But they should then reduce the standard or middle rate of tax for ordinary PAYE workers and say to everybody: 'Look, we are cutting back spending, we are closing quangos, but we're going to give it back to you in the form of lower taxation'. It's very simple," he says.

I can't make my mind up - is the man barking mad, or is he a genius?

Sand

As opposed to the view of increasing taxation to make up the 34 billion short fall in annual spending he is a genius by comparison.

Hes basically talking reality on the rest of it:

P. Breathnach

stepster wrote: »

... I can't make my mind up - is the man barking mad, or is he a genius?

He is very talented in running the type of airline that I prefer not to use.

He is also a master of the soundbite, and in this piece he has stung a few together. But I wouldn't have him as Minister for Finance.

kevteljeur

It's an 'easy suggestion' fix. Personally, I believe that taxes were too low to start with, but what a guy like him doesn't want to see is higher corporate taxes (not a bad idea at all), higher taxes for middle and higher income earners (which causes less disposable income) and then a much more effcient use of State funding, with a very high standard of Public Service. Oh, and a stable, strong government with long-term finance. He really doesn't like that idea at all (everything should be for sale in his ideal world).

Tragically, we got higher taxes in order to avoid a much more efficient use of State funding, and to bail out the banks. I fear that sort of approach is entrenched here.



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silverharp

stepster wrote: »

I can't make my mind up - is the man barking mad, or is he a genius?

A realist at least , anyone running a company knows you cant fudge it for long , if you run at a loss you go broke, its that simple. The gov. on the other hand for no logical reason gets to fudge it for longer but at the risk of a greater failure further down the road.
So far the Irish media or public have no concept of what it will be like trying to raise debt at 6%-8% over the next few years. At some point the gov will have to make a choice of destroying the middle class with higher interest and taxes or cutting back and living within its means.

Mr.Micro

Lets face it he has business experience not like Biffo and Lenihan and Ryanair has been hugely successful. If anybody could trim costs in the public sector its O'Leary.

wylo

I think he is correct regarding the governments inability to make correct decisions or even their inability to run a country at all, but his rants treat the country as if it were a business similar to Ryanair. The whole idea of running a business is to reduce spending as much as possible,that's simply not possible when running a country.

There are services out there that simply have to be paid for. By his way of thinking , we'd be packing 50 kids into a classroom, we'd be paying full third level fees and if we wanted to borrow money for the fees we'd be probably paying interest on that loan, we'd be cutting even more hospitals, we'd be driving on pothole ridden roads, the list goes on.

I believe high taxes and EFFICIENT public spending would put this country on track. Invest a half billion in a team of professionals whose sole purpose is to restructure the way all our services are ran regarding efficiency. This team would be a combination of professionals of the services at hand and professionals who are experts in company spending and LEAN, i.e. doctors , school teachers combined with experienced business experts(like Michael O leary)
Make sure the most is being got out of each service and that no money is being wasted. A complete change in public service culture is needed. Introduce bonuses for certain targets and standards being met. Introduce bonuses also to the team for achieving improvements. This will give them even more incentive to do a proper job.

is_that_so

O'Leary's expertise is in running a very profitable airline and making his "clients" pay every last penny he can extract from them. Not a lot different from the "madness" he claims for the Department of Finance. At least with airlines one can choose not to fly with Ryanair.

This looks like yet another O'Leary publicity stunt and seeing as its wisdom is directed at the new tax of €10 really not worth bothering about. If his arguments hold any water wouldn't we see BA/Lufthansa doing better as they don't have this tax?

Part of the reason numbers are down is because people are not travelling and are either saving their money or spending it on more sensible things and not on a EuroCity break.

Heinrich

P. Breathnach wrote: »

He is very talented in running the type of airline that I prefer not to use.

As distinct from the gombeens Cowen and Lenihan who would be running an economy that most would prefer not to be subject to!

Micko slates the semi states wasteful companies and quite rightly so. He runs a larger, more efficient and profitable airline. When the Aer Lingus lovers come on decrying Ryanair's baggage charges, fuel errors etc. let us reflect on how Aer Lingus ape Ryanair and indeed add on their own "little taxes".


He is correct in his assesment of the gombeen government and how they propose to get us out of the current hole. They ran out of ideas a long time ago. We are paying for the over generous social welfare which was Bert's way of buying elections. When the recipients of SW get stung with deductions they will revise how they vote. RIP FF.

silverharp

wylo wrote: »

There are services out there that simply have to be paid for. By his way of thinking , we'd be packing 50 kids into a classroom, we'd be paying full third level fees and if we wanted to borrow money for the fees we'd be probably paying interest on that loan, we'd be cutting even more hospitals, we'd be driving on pothole ridden roads, the list goes on.

the point you dont get to choose what your expected level of services are and then worry about how to pay for it after. going about it that way will work for a while then something has to give, lower economc activity , higher interest rates etc. If as in your example you want to maintain 30 in a class then you should be looking at the softer areas of gov. spending.

kevteljeur

silverharp wrote: »

A realist at least , anyone running a company knows you cant fudge it for long , if you run at a loss you go broke, its that simple. The gov. on the other hand for no logical reason gets to fudge it for longer but at the risk of a greater failure further down the road.
So far the Irish media or public have no concept of what it will be like trying to raise debt at 6%-8% over the next few years. At some point the gov will have to make a choice of destroying the middle class with higher interest and taxes or cutting back and living within its means.

This issue of being unable to figure out how to stay within a reasonable budget, I guess it's because of the populist approach of the main parties here, the result of which is a congenital inability to make tough decisions. They want to displease no-one, and so avoid making it all work by borrowing.

We never like tax increases (we got too used to year on year tax cuts and rebates here), but we want world-class public services. Efficiencies are required. The model of 10 managers and 1 worker is going to have go.


I've said it before and I'll say it again: Flashy cars on bad roads, the Irish economic model!



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irish_bob

wylo wrote: »

I think he is correct regarding the governments inability to make correct decisions or even their inability to run a country at all, but his rants treat the country as if it were a business similar to Ryanair. The whole idea of running a business is to reduce spending as much as possible,that's simply not possible when running a country.

There are services out there that simply have to be paid for. By his way of thinking , we'd be packing 50 kids into a classroom, we'd be paying full third level fees and if we wanted to borrow money for the fees we'd be probably paying interest on that loan, we'd be cutting even more hospitals, we'd be driving on pothole ridden roads, the list goes on.

I believe high taxes and EFFICIENT public spending would put this country on track. Invest a half billion in a team of professionals whose sole purpose is to restructure the way all our services are ran regarding efficiency. This team would be a combination of professionals of the services at hand and professionals who are experts in company spending and LEAN, i.e. doctors , school teachers combined with experienced business experts(like Michael O leary)
Make sure the most is being got out of each service and that no money is being wasted. A complete change in public service culture is needed. Introduce bonuses for certain targets and standards being met. Introduce bonuses also to the team for achieving improvements. This will give them even more incentive to do a proper job.

reforming the public sector means loosing votes , politicans and especially fianna fail politicians will be slow to do such a thing in this country

BroomBurner

wylo wrote: »

I think he is correct regarding the governments inability to make correct decisions or even their inability to run a country at all, but his rants treat the country as if it were a business similar to Ryanair. The whole idea of running a business is to reduce spending as much as possible,that's simply not possible when running a country.

There are services out there that simply have to be paid for. By his way of thinking , we'd be packing 50 kids into a classroom, we'd be paying full third level fees and if we wanted to borrow money for the fees we'd be probably paying interest on that loan, we'd be cutting even more hospitals, we'd be driving on pothole ridden roads, the list goes on.

I believe high taxes and EFFICIENT public spending would put this country on track. Invest a half billion in a team of professionals whose sole purpose is to restructure the way all our services are ran regarding efficiency. This team would be a combination of professionals of the services at hand and professionals who are experts in company spending and LEAN, i.e. doctors , school teachers combined with experienced business experts(like Michael O leary)
Make sure the most is being got out of each service and that no money is being wasted. A complete change in public service culture is needed. Introduce bonuses for certain targets and standards being met. Introduce bonuses also to the team for achieving improvements. This will give them even more incentive to do a proper job.

I agree with this entire post, in particular the last couple of paragraphs.

In addition, there does need to be a more regulated structure in Irish financial institutions, in particular the insurance sector, in order to keep the cost of living generally lower. With a lower cost of living, we could afford to pay higher taxes for a more efficient public sector.

I also agree with offering bonuses to public sector staff in lieu of increments. If you're good enough, you get a payrise. That's the way it is in the private sector, I see no reason why it shouldn't be the same in the public sector.

As for O'Leary, Ryanair was/is quite successful at the moment, but they are increasingly ostracising their own client base - only allowing one bag makes life difficult for families, women (ok, women can stuff their handbag in a case) and business people who require a laptop. They will be their own demise if they keep it up. Charging for the toilet is the last straw. I was a big fan of Ryanair before but boycotting them now. O'Leary may have some good ideas about trimming the fat, but he should only ever be a cog in the wheel, not the driver. Needs controlling.

97i9y3941

i like o leary,hes straight to the point,im sure he would tell them ministers to take the paycuts and dont start with this legal eagle ****e about signing into contract,thats whats f'cked up about this country in the first place,we cant do anything without legal action,and who are the polictitions gonna sue if they got a cut? the taoiseach?,the country?

j1smithy

To be honest I'm tired of the Sunday Independent treating Micheal 'O'Leary as some sort of godlike businessman/saviour of the nation. Yes, what Micheal suggests in theory would cut the cost of running the country. It also would create outright chaos. If you decide to radically or even modestly reduce the numbers in the public service, you are looking at perlonged national strikes.

He also mentions efficiencies. Now I see lots of people agree with him here, but do you really understand what he means by efficiencies?? Do we really want a no-frills health/education/police service. Aren't people always up in arms when efficiencies are introduced?? Like closing the little used A&E ward, people call that a disgrace. Cancelling your grannys hip replacement because there isn't enough money to pay for it. Having your children in large classes. No Gardai in rural police stations. All the kind of "efficiencies" that would become the reality if Micheals plan was enacted.

I'm tired of reading populist ranting. An awful lot of posters don't seem to understand that spending on services is directly proportional to services provided. Thats why our current government cannot undertake these actions, or any other potential government for that matter. Its too ruthless. Thats why it will always remain a fantasy solution.

Spudmonkey

P. Breathnach wrote: »

He is also a master of the soundbite, and in this piece he has stung a few together. But I wouldn't have him as Minister for Finance.

Why not? He took a very unsuccessful airline and made it more profitable than the national airline! He has a far better track record than anyone in government or anyone in the opposition!

is_that_so wrote: »

O'Leary's expertise is in running a very profitable airline and making his "clients" pay every last penny he can extract from them. Not a lot different from the "madness" he claims for the Department of Finance. At least with airlines one can choose not to fly with Ryanair.

If the state were a private company, they would be bankrupt months ago. It is not possible to keep spending more than whats coming in. Maybe "radical" thinking like O'Learys is whats needed to get this country back on its feet.

Anyway, I for one would second many of O'Leary's ideas as they would corrolate with my own..

Spudmonkey

j1smithy wrote: »

He also mentions efficiencies. Now I see lots of people agree with him here, but do you really understand what he means by efficiencies?? Do we really want a no-frills health/education/police service. Aren't people always up in arms when efficiencies are introduced?? Like closing the little used A&E ward, people call that a disgrace. Cancelling your grannys hip replacement because there isn't enough money to pay for it. Having your children in large classes. No Gardai in rural police stations. All the kind of "efficiencies" that would become the reality if Micheals plan was enacted

I doubt these are the in-efficiencies. Surely it's more the middle management administration posts we keep hearing about in the HSE, the lack of negative benchmarking in the education system, the un-nessacery amount of overtime that certain gardai put in? Don't forget a very generous social welfare system

I'm sure there are so many things that can be reduced before any of the above are touched... Problem is the government lack the bottle to make any of the really hard decisions (because of fear of industrial action), and therefore make cuts to the above points.

P. Breathnach

Spudmonkey wrote: »

Why not? He took a very unsuccessful airline and made it more profitable than the national airline! He has a far better track record than anyone in government or anyone in the opposition! ...

Running an economy is quite different from running an airline. You might as well consider Roy Keane for the job on the basis that he was good at football.

is_that_so

Spudmonkey wrote: »

Why not? He took a very unsuccessful airline and made it more profitable than the national airline! He has a far better track record than anyone in government or anyone in the opposition!



If the state were a private company, they would be bankrupt months ago. It is not possible to keep spending more than whats coming in. Maybe "radical" thinking like O'Learys is whats needed to get this country back on its feet.

Anyway, I for one would second many of O'Leary's ideas as they would corrolate with my own..

And I am all for radical changes myself, but O'Leary's so-called "radical" proposals inevitably revolves around him whining about any extra payment Ryanair have to make, which is hardly radical. As I mentioned you can opt not to fly Ryanair and many do not. Governments do not have that option. I'd hate to see a Government run or influenced by Michael O'Leary. Baby, toys and pram are the only images that spring to mind.

DublinWriter

I hate to say it, but O'Leary's right.

I grew up in the 70's and 80's and the country was paralysed with high-taxation and the 'black' economy.

The current government have failed to introduce any stimulus measures to kick-start the economy. It doesn't take a degree in economics to understand that taking more money away from the people will not stimulate economic growth.

Even the Brits had sense enough to lower VAT. What we have in this country is an irresponsible and incompetent government trying desperately to reign-in the run-away public spending policies that they introduced during the good-times.

Unfortunately, we Irish begrudge individual success. Anything the likes of O'Leary, Bono et al say is usually met with the collective braying of the unhappy.

Permabear

This post has been deleted.

Spudmonkey

P. Breathnach wrote: »

Running an economy is quite different from running an airline. You might as well consider Roy Keane for the job on the basis that he was good at football.

Obviously! And no not because he was a good soccer player, but because he might have been a good manager (which he has subsiquently proved he isn't).

Why is that any different from the current government? There are ministers who have been assigned departments that they have no previous experience at (although probably less so now than before), school teachers in charge of health and the like, surely it would make more sense to have a doctor over health, guard over justice etc?

Spudmonkey

is_that_so wrote: »

And I am all for radical changes myself, but O'Leary's so-called "radical" proposals inevitably revolves around him whining about any extra payment Ryanair have to make, which is hardly radical. As I mentioned you can opt not to fly Ryanair and many do not. Governments do not have that option. I'd hate to see a Government run or influenced by Michael O'Leary. Baby, toys and pram are the only images that spring to mind.

Again.. obviously. But thats because his chief concern is the company he runs, not anything else. This doesn't nullify any of his arguments though.

And about Ryanair, many do fly with them. Possibly even many more than Aer Lingus? Which one is the greater failure?

star.chaser

stepster wrote: »

is the man barking mad, or is he a genius?

His bank account balance should answer that one

irish_bob

j1smithy wrote: »

To be honest I'm tired of the Sunday Independent treating Micheal 'O'Leary as some sort of godlike businessman/saviour of the nation. Yes, what Micheal suggests in theory would cut the cost of running the country. It also would create outright chaos. If you decide to radically or even modestly reduce the numbers in the public service, you are looking at perlonged national strikes.

He also mentions efficiencies. Now I see lots of people agree with him here, but do you really understand what he means by efficiencies?? Do we really want a no-frills health/education/police service. Aren't people always up in arms when efficiencies are introduced?? Like closing the little used A&E ward, people call that a disgrace. Cancelling your grannys hip replacement because there isn't enough money to pay for it. Having your children in large classes. No Gardai in rural police stations. All the kind of "efficiencies" that would become the reality if Micheals plan was enacted.

I'm tired of reading populist ranting. An awful lot of posters don't seem to understand that spending on services is directly proportional to services provided. Thats why our current government cannot undertake these actions, or any other potential government for that matter. Its too ruthless. Thats why it will always remain a fantasy solution.

class sizes are too big because all the money is spent on teachers wages , bring teachers wages back in line with our european counterparts and thier will be more money to be spent on chalk and basketball nets

thier isnt enough money for beds in hospitals because nurses and doctors wages are at least 25% higher than in the rest of the eu and we have an army of surplus to requirement pen pushers who,s only reason for employment is so the local fianna fail td gets enough votes at elections , this is what o leary means when he speaks of public sector reform , services can still be delivered while reducing wages and firing spare pricks , if they want to strike , let them , this is a republic , the public sector have been an aristrocrocy for far too long , their sense of entitlement is beyond a joke at this stage , were it not for the short sighted pettiness of us as a people ( by that i mean , most people even they dont themselves work in the public sector , have relatives who do and irish people do like to keep money in the family ) this issue would have been dealt with long ago

is_that_so

Spudmonkey wrote: »

Again.. obviously. But thats because his chief concern is the company he runs, not anything else. This doesn't nullify any of his arguments though.

And about Ryanair, many do fly with them. Possibly even many more than Aer Lingus? Which one is the greater failure?

Indeed it doesn't but as the vast majority of his arguments state the "bleedin' obvious" about the government, and the rest rail against attacks on Ryanair, I think we reserve the right to ignore him. I don't think he is necessarily wrong but the "vested interests " argument is a bit old and populist. His position makes perfectly good sense to him , the easily aroused Indo readers and anyone else who fancies a populist rant. It's the old "hurler on the ditch" or "philosopher at the bar" line. That said if being "right" gives him another free bit of Ryanair publicity how can he resist it.

I am not dismissing his success but let him loose near a Govt department or budget, I think not. There's a lot more to politics and government than a businessman who thinks he knows better and has a cure for all our ills.

As regards the Ryanair v Aer Lingus comment I think you are missing the point. Governments are supposed to provide services for all of the people, not just, in this analogy, the people who fly Ryanair.

P. Breathnach

star.chaser wrote: »

His bank account balance should answer that one

All that Michael O'Leary's bank balance tells us is that he is good a pursuing his own financial interests.

Spudmonkey

is_that_so wrote: »

I am not dismissing his success but let him loose near a Govt department or budget, I think not. There's a lot more to politics and government than a businessman who thinks he knows better and has a cure for all our ills.

As regards the Ryanair v Aer Lingus comment I think you are missing the point. Governments are supposed to provide services for all of the people, not just, in this analogy, the people who fly Ryanair.

Yes of course its purpose it to provide services and no the government it not a company, it is not intended to make a profit, but it cannot afford to run at a loss either. Before O’Leary took charge of Ryanair the company ran at a loss, it was only after much re-structuring, it became a viable company.

Whats more, the most important thing with regard to Air transport etc is safety and Ryanair have a far better track record in that department than Aer Lingus, which shows that cuts made do not mean a drop in performance. Apologies, I do not want to turn this thread into a Ryanair v Aer Lingus debate.

As regard the politics and government comment, it’s not like teachers who become politicians and then ministers will know more than experts in those areas?

jimmmy

Michael O'Leary speaks common sense, he knows inefficiency and waste where he sees it and fair play to him....he is the man mainly responsible for one of Europes most successful airlines....no mean achievement. He and his company pay a lot of tax in Ireland. I agree with him, like many others do, that " five to 10 billion of spending should be taken out of the public sector and the government should face up to hard decisions."

irish_bob

is_that_so wrote: »

Indeed it doesn't but as the vast majority of his arguments state the "bleedin' obvious" about the government, and the rest rail against attacks on Ryanair, I think we reserve the right to ignore him. I don't think he is necessarily wrong but the "vested interests " argument is a bit old and populist. His position makes perfectly good sense to him , the easily aroused Indo readers and anyone else who fancies a populist rant. It's the old "hurler on the ditch" or "philosopher at the bar" line. That said if being "right" gives him another free bit of Ryanair publicity how can he resist it.

I am not dismissing his success but let him loose near a Govt department or budget, I think not. There's a lot more to politics and government than a businessman who thinks he knows better and has a cure for all our ills.

As regards the Ryanair v Aer Lingus comment I think you are missing the point. Governments are supposed to provide services for all of the people, not just, in this analogy, the people who fly Ryanair.

since when is calling a spade a spade when it comes to the public sector in ireland populist , its not a popular thing to say at all , eamon gilmore is the most popular leader in the country for keeping stum about the public sector , bertie aherne ( the gift that kept on giving to the public sector ) was the most popular politician in this country in the last 30 years

irish_bob

jimmmy wrote: »

Michael O'Leary speaks common sense, he knows inefficiency and waste where he sees it and fair play to him....he is the man mainly responsible for one of Europes most successful airlines....no mean achievement. He and his company pay a lot of tax in Ireland. I agree with him, like many others do, that " five to 10 billion of spending should be taken out of the public sector and the government should face up to hard decisions."

but they wont , not while the goverment is led by the gutless cowen and any alternative involving labour wont do what needs to be done either which is why the only vote for change is a vote for fine gael