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American Chamber of Commerce at it again
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19-01-2010 1:10amhttp://www.rte.ie/business/2010/0118/american.html
Just came across this, what do people think, should we be bending over backwards for these guys or should we accept that they will probably leave eventually anyway. In summary they want wages and costs such as energy to come down, more emphasis on maths & science in schools and our corporation tax rate of 12.5% to remain untouched. We all know and accept that costs are too high but wages will be a big issue for people with financial commitments taken out over the past few years, although it is fair to say the gov is already working hard on this side of things by cutting PS pay. i suppose in the medium term they are vital but should we be letting them call the shots, as they seem to think they can.0
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Well they are only reiterating government policy. What we need to do is devalue, but short of leaving the EMU, we cant do that so alternatively we have to go through the slow and painful process of deflation to make ourselves more competitive. They are right in pretty much everything they say as you acknowledge, so whats the problem?0
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Well they are only reiterating government policy. What we need to do is devalue, but short of leaving the EMU, we cant do that so alternatively we have to go through the slow and painful process of deflation to make ourselves more competitive. They are right in pretty much everything they say as you acknowledge, so whats the problem?0
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No problem as such just wanted to know what people think, are you happy to earn less to please these companies, many people aren't, especially those with mortgages, it is easy to see why. You obviously regard the deflation process as necessary and i do too. I have just noticed that they have been very vocal in telling the gov what to do lately and should they have a say in what policy is. I havent however noticed a government policy to reduce the costs that they themselves control.
really? wage cuts? pension levies? capital project cost cuts? local authority budget cuts? social welfare cuts?
The fact is it doesnt matter whether we want them to have a say, the reality is that they do have a say. They can leave and go somewhere cheaper at any point. They want to stay however, and it is our responsibility to create an environment that is positive for them to do so.0 -
really? wage cuts? pension levies? capital project cost cuts? local authority budget cuts? social welfare cuts?
The fact is it doesnt matter whether we want them to have a say, the reality is that they do have a say. They can leave and go somewhere cheaper at any point. They want to stay however, and it is our responsibility to create an environment that is positive for them to do so.0 -
As I mentioned before the rally cry of 'competitiveness' rang from the boardrooms of IBEC and now echoes throughout the corridors of power. Same old nonsense.
Competitiveness? With who. The Chinese? India? Germany?
Are they producing the same as Ireland? Who exactly are or competitors and in what area - exactly. Is Irish butter competing with French butter? Ask any French chef - ans. no its not. Irish exports are increasing. Increasing. Not because they are cheaper than an exact competitor, but bec they are differentiated in the market.Some of these crazies should start looking at commercial definition of competitors.
Does reducing a wage bill make product more competitive or a company richer? Is it possible for Ireland to undercut Indian wages?
Just a lot of meaningless soundbites - nonsense.
And the tourist crowd on Frontline tonight. Who is Ireland competing against re tourist? Spain? I think not. France? Switzerland? Ditto. Those who come here know what they're coming for and it aint sun or good wine or yodelling lessons. As for home market, that will inevitable grow as we cant afford to go abroad.
Hoteliers - If you cant pay decent wages - get the hell out of the game!0 -
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Lemondrop kid wrote: »As I mentioned before the rally cry of 'competitiveness' rang from the boardrooms of IBEC and now echoes throughout the corridors of power. Same old nonsense.
Competitiveness? With who. The Chinese? India? Germany?
Are they producing the same as Ireland? Who exactly are or competitors and in what area - exactly. Is Irish butter competing with French butter? Ask any French chef - ans. no its not. Irish exports are increasing. Increasing. Not because they are cheaper than an exact competitor, but bec they are differentiated in the market.Some of these crazies should start looking at commercial definition of competitors.
Does reducing a wage bill make product more competitive or a company richer? Is it possible for Ireland to undercut Indian wages?
Just a lot of meaningless soundbites - nonsense.
And the tourist crowd on Frontline tonight. Who is Ireland competing against re tourist? Spain? I think not. France? Switzerland? Ditto. Those who come here know what they're coming for and it aint sun or good food. As for home market, that will inevitable grow as we cant afford to go abroad.
Hoteliers - If you cant pay decent wages - get the hell out of the game!
Alot of our exports are from FDI companys that chose to locate here for a variety of reasons, they are very mobile as we saw with Dell, and can leave if they are offered a better deal elsewhere, so we are competing with other countries to 1. Keep the ones we have here and 2. Attract new ones which provide jobs. I believe the main reason our exports increased was down to the big Pharma companies which are nearly all FDI, indigenous Irish exports are not increasing as far as I know.0 -
Are these the same guys that were complaining about our education system a couple of weeks ago?0
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Hmm didnt see the Frontline must watch it on RTE Player. Surely it is in our interest to be able to offer reasonably priced holidays here though? When people come back from overseas hols they are always commenting on how we are being ripped off here and how everything is cheaper abroad and that is very true.
There is no doubt we should offer reasonably priced hols here. Look at what happened over the last twelve years - hotels became owned by syndicates, who responded ruthlessly and in short term vision to the market even city B&B's got into the fray. (Not all and smaller family run hotels much less so) Some hotels were built to avoid tax and become cash cows - seen as a win win situation. Now these large companies, and that's what most of them are, target the employees as a way back to an unsustainable level of profit created with bad business practice (unjustified pricing). As for cheaper abroad , very true part of the overall cost of living, but again Ireland is not competing with other countries - is Spain etc Ireland? No. The falloff is due to world wide recession, not bec they can get a cheaper Ireland in another place. Competitiveness is not only measured in wages but in quality and USP of product. These megahotels brought in cheap labour before and in spite of min wage legislation - they are the very ones who weaken the Irish product - ie visitors were lucky to meet an Irish person anywhere in the hotel complex. (the is not a rant against foreign labour, but a critique of the quality of the product ie selling Ireland or Irishness, which these hotels undermined, under the 'we cant get labour' banner instead of the truer 'we cant get cheap labour which wont complain about pay and conditions)
Alot of our exports are from FDI companys that chose to locate here for a variety of reasons, they are very mobile as we saw with Dell, and can leave if they are offered a better deal elsewhere, so we are competing with other countries to 1. Keep the ones we have here and 2. Attract new ones which provide jobs. I believe the main reason our exports increased was down to the big Pharma companies which are nearly all FDI, indigenous Irish exports are not increasing as far as I know.
My dear Mikey, the FDI companies are here for the following reasons 1/ 12.5% tax (80% reason) 2/ Access to European mkt from an ENGLISH speaking base.(20% reason.
Wages drop only means sexier quarterly reports, nothing else. Please understand, Dell moved because they were bought by the Polish (encouraged shall we say) No decrease in wages will deter these companies from moving if the dollars add in favour of moving - we have to have a 95% decrease for any difference to be significant. Long as we speak English, have a strong Euro presence and take on 12.5 ,they'll stay. All exports from Ireland are indigenous by definition, FDI or otherwise. If they're increasing at current wages levels which they are then our competitiveness is robust as is.
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Anyone who thinks that wages have no impact on the competitiveness of a country are living in the clouds.
Anyone who thinks that a minimum wage (and therefore the wage at which a lot of others are pegged) standing at 8.65 an hour is competitive is also having a laugh.
The entire cost in the economy, from wages to rents, needs to come down.
We can choose to have a lot of less, or nothing of more.0 -
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This post has been deleted.0
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Lemondrop kid wrote: »My dear Mikey, the FDI companies are here for the following reasons 1/ 12.5% tax (80% reason) 2/ Access to European mkt from an ENGLISH speaking base.(20% reason.
Wages drop only means sexier quarterly reports, nothing else. Please understand, Dell moved because they were bought by the Polish got (encourages shall we say) No decrease in wages will deter these companies from moving if the dollars add in favour of moving - we have to have a 95% decrease for any difference to be significant. Long as we spaek English, have a strong Euro presence and take on 12.5 they'll stay. All exports from Ireland are indigenous by definition, FDI or otherwise. If they're increasing at current wages levels which they are then our competitiveness is robust as is.
Energy costs area a massive issue for some of these companies by the way, more so than wages in some cases.
Exports are indigenous when profits are kept in Ireland and not repatriated to the U.S. or wherever the parent company is from IMO0 -
donegalfella wrote: »This post has been deleted.0
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Lemondrop kid wrote: »As I mentioned before the rally cry of 'competitiveness' rang from the boardrooms of IBEC and now echoes throughout the corridors of power. Same old nonsense.
Competitiveness? With who. The Chinese? India? Germany?
Are they producing the same as Ireland? Who exactly are or competitors and in what area - exactly. Is Irish butter competing with French butter? Ask any French chef - ans. no its not. Irish exports are increasing. Increasing. Not because they are cheaper than an exact competitor, but bec they are differentiated in the market.Some of these crazies should start looking at commercial definition of competitors.
Does reducing a wage bill make product more competitive or a company richer? Is it possible for Ireland to undercut Indian wages?
Just a lot of meaningless soundbites - nonsense.
And the tourist crowd on Frontline tonight. Who is Ireland competing against re tourist? Spain? I think not. France? Switzerland? Ditto. Those who come here know what they're coming for and it aint sun or good wine or yodelling lessons. As for home market, that will inevitable grow as we cant afford to go abroad.
Hoteliers - If you cant pay decent wages - get the hell out of the game!
I think this is a very narrow viewpoint. Obviously differentiation between products is important, but price is probably the most important, especially when there is a recession. Also, most exports won't be of final consumer products like butter or a tourist coming to stay, but to be used as inputs by other businesses. And I would think that businesses are on the whole pay much more attention to price than consumers. Consumers are often unpredictable, impulse buy etc, whereas businesses are constantly analysing and forecasting price changes.0 -
Dont really understand why you are preaching to me we are basically saying the same thing,
Sorry if I came across a bit preachy, just annoyed at the IBEC ISME crowd and the Govt at the mo.:)
I said they are here for a variety of reasons and i am well aware of what they are, do you not agree that we are competing with other countries to keep them and attract new ones?
Not unless the rest do a 12.5% rate and speak English
Energy costs area a massive issue for some of these companies by the way, more so than wages in some cases.
Exports are indigenous when profits are kept in Ireland and not repatriated to the U.S. or wherever the parent company is from IMO0 -
Anyone who thinks that wages have no impact on the competitiveness of a country are living in the clouds.
Anyone who thinks that a minimum wage (and therefore the wage at which a lot of others are pegged) standing at 8.65 an hour is competitive is also having a laugh.
The entire cost in the economy, from wages to rents, needs to come down.
We can choose to have a lot of less, or nothing of more.
'Money makes the world go round' - a very true statement. Same as a country - choke its flow of money too quickly ie by reducing wages - and it will accelerate our recession spiral. ALL costs need to be addressed and in realist ,balanced, measured way over an appropiate timescale. Too fast (economic shock therapy) and you'll have bugger all left - cept the very rich and the very poor.
PS: Our place in the international markets across a wide variety of areas is not going to evaporate because of pricing. Pricing is but one ingredient. In comparing goods, price is one factor - a bigger one for some (more elastic,) less for others. This recession will shake out the less business savvy, which is fine. But decimating the populace without rock hard analysis of consequence and validity is panic talking.0 -
donegalfella wrote: »This post has been deleted.
Agree with most esp education, well stated. It is a multi-layered response we need, not some psycho 'cut wages' rant0 -
Hmm didnt see the Frontline must watch it on RTE Player. Surely it is in our interest to be able to offer reasonably priced holidays here though? When people come back from overseas hols they are always commenting on how we are being ripped off here and how everything is cheaper abroad and that is very true.
There is no doubt we should offer reasonably priced hols here. Look at what happened over the last twelve years - hotels became owned by syndicates, who responded ruthlessly and in short term vision to the market even city B&B's got into the fray. (Not all and smaller family run hotels much less so) Some hotels were built to avoid tax and become cash cows - seen as a win win situation. Now these large companies, and that's what most of them are, target the employees as a way back to an unsustainable level of profit created with bad business practice (unjustified pricing). As for cheaper abroad , very true part of the overall cost of living, but again Ireland is not competing with other countries - is Spain etc Ireland? No. The falloff is due to world wide recession, not bec they can get a cheaper Ireland in another place. Competitiveness is not only measured in wages but in quality and USP of product. These megahotels brought in cheap labour before and in spite of min wage legislation - they are the very ones who weaken the Irish product - ie visitors were lucky to meet an Irish person anywhere in the hotel complex. (the is not a rant against foreign labour, but a critique of the quality of the product ie selling Ireland or Irishness, which these hotels undermined, under the 'we cant get labour' banner instead of the truer 'we cant get cheap labour which wont complain about pay and conditions)
Alot of our exports are from FDI companys that chose to locate here for a variety of reasons, they are very mobile as we saw with Dell, and can leave if they are offered a better deal elsewhere, so we are competing with other countries to 1. Keep the ones we have here and 2. Attract new ones which provide jobs. I believe the main reason our exports increased was down to the big Pharma companies which are nearly all FDI, indigenous Irish exports are not increasing as far as I know.Lemondrop kid wrote: »My dear Mikey, the FDI companies are here for the following reasons 1/ 12.5% tax (80% reason) 2/ Access to European mkt from an ENGLISH speaking base.(20% reason.
Wages drop only means sexier quarterly reports, nothing else. Please understand, Dell moved because they were bought by the Polish (encouraged shall we say) No decrease in wages will deter these companies from moving if the dollars add in favour of moving - we have to have a 95% decrease for any difference to be significant. Long as we speak English, have a strong Euro presence and take on 12.5 ,they'll stay. All exports from Ireland are indigenous by definition, FDI or otherwise. If they're increasing at current wages levels which they are then our competitiveness is robust as is.
I'm sorry, but your whole post smacks of a rant against capitalism. Prices don't matter, no need to drive down wage costs as they don't matter, and I find the following arguement little strange:Now these large companies, and that's what most of them are, target the employees as a way back to an unsustainable level of profit created with bad business practice (unjustified pricing). As for cheaper abroad , very true part of the overall cost of living, but again Ireland is not competing with other countries - is Spain etc Ireland? No. The falloff is due to world wide recession, not bec they can get a cheaper Ireland in another place.
First of all, is there anything inherently wrong about being a large company? Because it sounds like you have something against large companies in how you phrase that sentence.
How exactly have companies "targeted" their employees? If you are talking about businesses trying to reduce staff costs, I would think that is fair enough. If the business can't afford to pay its staff on the current levels of trading, it has to look at ways of reducing costs through reduced hours, or reduced wages (something many companies in many industries have done since the recession started - it is an aspect of the market economy). But your choice of language suggests that businesses have taken to underhand or illegal means.
"Ireland is not competing with other countries". Then who are we competing against?? We may not be competing against Spain for the holiday maker who wants to go on a package holiday, but we are competing against them. For example, a tourist from the states wishing to visit Europe will decide what countries to visit, and price will be an important factor in that decision.
"The falloff in demand is due to the worldwide recession". Yes it is true that this has had an impact. But we have also shot ourselves in the foot by becoming such an expensive place to visit. Some of this is outside our control, the strength of the euro versus the dollar and sterling. A lot of it is within our control. Inflation was running at 6% a few years ago. This spiraled out of control as employees then demanded cost of living increases. Our whole economy become more expensive and less competitive as a result. And we need to undo the damage that has been done.0 -
Lemondrop kid wrote: »As I mentioned before the rally cry of 'competitiveness' rang from the boardrooms of IBEC and now echoes throughout the corridors of power. Same old nonsense.
Competitiveness? With who. The Chinese? India? Germany?
Are they producing the same as Ireland? Who exactly are or competitors and in what area - exactly. Is Irish butter competing with French butter? Ask any French chef - ans. no its not. Irish exports are increasing. Increasing. Not because they are cheaper than an exact competitor, but bec they are differentiated in the market.Some of these crazies should start looking at commercial definition of competitors.
Does reducing a wage bill make product more competitive or a company richer? Is it possible for Ireland to undercut Indian wages?
Just a lot of meaningless soundbites - nonsense.
And the tourist crowd on Frontline tonight. Who is Ireland competing against re tourist? Spain? I think not. France? Switzerland? Ditto. Those who come here know what they're coming for and it aint sun or good wine or yodelling lessons. As for home market, that will inevitable grow as we cant afford to go abroad.
Hoteliers - If you cant pay decent wages - get the hell out of the game!
Irish butter does compete with German and Czech butter on the shelves in my local Lidl by the way. It's twice the price for Kerrygold as for German butter and it tastes the same. Most germans know full well it's a rip off and avoid it, some expats buy it by the looks of it.
As for tourism....more nonsense. We're booking a holiday at the moment, normal 2 weeks in the sun in July sort of thing. We have all the brochures, do you think price is not affecting our decision? Tourism is a product like any other, going by your logic, we could increase the prices of all hotels in Ireland and all would be well, because Ireland is not Switzerland
Ireland must be particularly competitive these days as we rely heavily on the North American tourist, probably disproportionately so, yet the Euro's strength means they get poor value before even stepping onto the plane, nevermind before they get ripped off by an irish B&B etc...0 -
Well I'm not gonna give a crash course in economics. I would suggest a look at
Porter's five forces which affect profitability
Price elasticity. Product differentiation. The effect of marketing mix on sales.Business model/structure and product type/placement.
Then maybe a glance at wage deflation and its impact on economic growth.
If everything was down to price or labour costs, life would be a lot simpler.
No, I'm not anti capitalism, just reckless capitalism geared towards the rich. Friedman's dead. Let him rest.0 -
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I have a masters degree in business economics, so I don't think I need a "crash course in economics". Thanks all the same.
Any business will ignore high costs at their peril. In the real world, it doesn't happen. Of course being competitive involves more than just being cheaper, and we should be trying to differentiate ourselves from our competitors, but you cannot ignore the facts of how rapidly wages in Ireland have risen over the past decade, thereby making ourselves uncompetitive. Ireland is seen as an expensive place to do business, and that is why we are not seeing as much FDI as we have done in the past.
Aside from that, I also agree with what they were saying about our education system. In the leaving cert, people who take maths at higher level are certainly in the minority, as are those who achieve an A1. Irish people are also notoriously poor at learning foreign languages. If we can't even teach maths or science subjects well at second level, nevermind third level, where are the skills going to come from that will allow companies to be innovative?0 -
Lemondrop kid wrote: »Well I'm not gonna give a crash course in economics. I would suggest a look at
Porter's five forces which affect profitability
Price elasticity. Product differentiation. The effect of marketing mix on sales.Business model/structure and product type/placement.
Then maybe a glance at wage deflation and its impact on economic growth.
If everything was down to price or costs, life would be a lot simpler.
No, I'm not anti capitialism, just reckless capitialism geared towards the rich. Friedman's dead. Let him rest.
Common sense goes out the window in favour of this economics pseudo science (How many leading economists predicted Ireland's current predicament? I'm a lowly engineer and I saw it coming as did thousands of others)
Do you maintain that a US tourist who wants to visit "Europe" will not look at the price of accomodation and meals, hire cars etc. in Ireland and elsewhere and make their choices at least partly based on these costs? Ireland has totally priced itself out of the game in almost every area. I would sooner set up a firm in Germany FFS.0 -
Lemondrop kid wrote: »'Money makes the world go round' - a very true statement. Same as a country - choke its flow of money too quickly ie by reducing wages - and it will accelerate our recession spiral. ALL costs need to be addressed and in realist ,balanced, measured way over an appropiate timescale. Too fast (economic shock therapy) and you'll have bugger all left - cept the very rich and the very poor.
PS: Our place in the international markets across a wide variety of areas is not going to evaporate because of pricing. Pricing is but one ingredient. In comparing goods, price is one factor - a bigger one for some (more elastic,) less for others. This recession will shake out the less business savvy, which is fine. But decimating the populace without rock hard analysis of consequence and validity is panic talking.
Dublin is in the mid-20's position of 'most expensive city to live in', whereas Berlin - capital of a big socialist state - is something like 47th. Go figure.
The price of a cup of coffee is affected by the wage of the person who hands it to you, who drives the truck of supplies to the shop, etc etc etc.0 -
I have a masters degree in business economics, so I don't think I need a "crash course in economics". Thanks all the same.
Any business will ignore high costs at their peril. In the real world, it doesn't happen. Of course being competitive involves more than just being cheaper, and we should be trying to differentiate ourselves from our competitors, but you cannot ignore the facts of how rapidly wages in Ireland have risen over the past decade, thereby making ourselves uncompetitive. Ireland is seen as an expensive place to do business, and that is why we are not seeing as much FDI as we have done in the past.
The origin of my point was a Frontline prog with mem.s of the business 'community' giving the usual knee jerk 'down with wages' read 'i didn't plan effectively enough'.
My point, as you seem to agree upon is that WAGES ALONE ARE NOT THE ISSUE. Not only are other costs a significant factor, but there any many factors which effect competitiveness and profitability. Of course wages have risen, but any rapid dismantling of wages has as much likelihood to do harm to a recovering economy than to help. It truth,I believe it's a smokescreen to facilitate the dismantling of a variety of employee rights.
Aside from that, I also agree with what they were saying about our education system. In the leaving cert, people who take maths at higher level are certainly in the minority, as are those who achieve an A1. Irish people are also notoriously poor at learning foreign languages. If we can't even teach maths or science subjects well at second level, nevermind third level, where are the skills going to come from that will allow companies to be innovative?
PS I left out the word labour in the sentence regarding costs, now rectified.0 -
Less of the sarcasm pulleaase. I'm an engineer but I had to do my business modules too, including Porter's 5 forces and SWOT analysis and all that other mumbo jumbo. A lot of it is pseudo science at best.
Common sense goes out the window in favour of this economics pseudo science (How many leading economists predicted Ireland's current predicament? I'm a lowly engineer and I saw it coming as did thousands of others)
Do you maintain that a US tourist who wants to visit "Europe" will not look at the price of accomodation and meals, hire cars etc. in Ireland and elsewhere and make their choices at least partly based on these costs? Ireland has totally priced itself out of the game in almost every area. I would sooner set up a firm in Germany FFS.
If you want an apple, a green fresh round apple, rather than a pear (both fruit) would you pay 20% more for it?0 -
Lemondrop kid wrote: »If you want an apple, a green fresh round apple, rather than a pear (both fruit) would you pay 20% more for it?
In any case, 20% of an apple is a small increase in absolute terms, but a 20% more expensive holiday is a large increse in absloute terms0 -
Maybe, would I pay 50% more for it, or 100% more for it though? Ireland is a lot less competitive than you seem to believe.
In any case, 20% of an apple is a small increase in absolute terms, but a 20% more expensive holiday is a large increse in absloute terms
Absolutely.
Sorry, could resist. Will leave it at that0 -
Less of the sarcasm pulleaase. I'm an engineer but I had to do my business modules too, including Porter's 5 forces and SWOT analysis and all that other mumbo jumbo. A lot of it is pseudo science at best.
Common sense goes out the window in favour of this economics pseudo science (How many leading economists predicted Ireland's current predicament? I'm a lowly engineer and I saw it coming as did thousands of others)
Ugh...0
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