In the second of a two part series, Gordon Deegan canvasses the views of Clare business leaders on what they believe should be done to arrest the current economic downturn and kick-start the local and national economy.

Kieran MacSweeney -
Chief executive of Avocent International Ltd

THE chief executive of Avocent International Ltd suspects that after the Government’s handling of the Shannon/Heathrow issue last year, the wider business community no longer has the will to come together and address the region’s economic problems.
Kieran MacSweeney said, “The will to fight is not there, because there isn’t the confidence that the political will is there to make the tough decisions in favour of the region.
“The biggest issue at the moment is the lack of any real recognition by the Government of the extent of the problems the region and the country is facing. The Government is behind the curve in acknowledging what is going on. There has been quite a slowdown in the economy in the last three months in financial services, in retail, in the hospitality sector and in construction with a lot of sectors concerned about our lack of competitiveness,” he said.

Well placed to comment on the economic challenges facing the region after announcing the loss of 64 jobs at Avocent’s Shannon plant only six weeks ago, Mr MacSweeney said, “Ireland is continually falling down the competitiveness ratings and we now rank 22nd, whereas four or five years ago, we were ranked fourth and that drop is worth focusing upon.
“Should future national wage agreements and/or salaries for government and higher civil/public servants be linked directly to Ireland’s improvement in the global competitiveness index?” he asked.
“The issue of cost and access is making the region not as business friendly as it was and government and local agencies don’t like to talk about it. There is a need to talk about these problems and recognise them. Otherwise, they won’t be resolved.
“We live in a very open economy and are very exposed to outside factors. The Government should be corralling experts who have been predicting the downturn for the past two years to advise them on what should be done. I’m talking about economists such as Alan Aherne and David McWilliams and others, the guys who called it right over the past two years.
“The greatest announcements of Foreign Direct Investment continues to be on the east coast, south and BMW regions. The mid-west is not as business friendly a location here for foreign direct investment with the loss of the Heathrow service. It is great to have the direct Paris connection and that helps but there should be no illusions that other point-to-point connections to London and the Paris link replace the direct link to Heathrow.
“Having said that, businesses in the region now need to accept the reality of the situation and focus their business model on what can be successful in the region.” 
One of the areas of expertise Mr MacSweeney is building up in Avocent is in the area of pre-acquisition due diligence and post-acquisition integration planning.
He said that Avocent recently acquired a UK firm employing over 200 people in a $45 million deal and that the Shannon management team has taken on the responsibility of integrating the acquisition into the Avocent global business.
“The country and the region has many strengths that can be built upon to improve our global competitiveness and improve our ability in coming out of the current recession successfully. This requires an honest acknowledgement by the Government to the full extent of the downturn, some tough decisions such as wage and recruitment freezes in the public service, leveraging the advice of the economists and international business leaders to develop a recovery plan for the region. We need a political “selfishness” to protect and enhance the biggest engine for growth that we have, Shannon Airport, to accelerate the completion of Galway/Shannon dual carriageway and to ensure big-ticket FDI announcements are directed to the mid-west.”

Chris O’Donovan –
IBEC Regional Director

AS the National Pay Talks reach critical stage, all parties should reflect carefully on the folly of inflation chasing wage increases which can only further weaken employment.
That’s the view of IBEC regional director, Chris O’Donovan who believes that as a small open economy, we have limited international influence and control on the world economy.
“This looming global recession is being fed by several factors including the credit crunch, commodity inflation and a strong euro. However, the Government can only focus on what it can control.”
“IBEC has called on the Government to show leadership amid a worsening outlook for the Irish economy. The situation has deteriorated significantly in the past month and the Government needs to do more to curb public spending. Employers are expressing serious concern at the economic challenges posed by rapidly rising costs, which are putting an intolerable strain on businesses. This is a time for the Government to cut their own cloth to fit.
“There has been quite a decline in the economy even over the last month, in the retail sector, in construction and in financial services. The mood is very negative, with employers worried about the outlook, about our loss of competitiveness and our ability to compete in export markets. It was now evident that a number of previously insulated sectors are facing significant pressure.”
“IBEC has expressed serious concern at the economic challenges posed by rapidly rising energy costs. Energy prices will inevitably rise to reflect current international fuel price increases, nevertheless  the Government and the regulators should ensure the level of price change does not impact our relative competitiveness internationally. Specific IBEC proposals include: supports for energy efficiency, market competition, infrastructure, fuel diversification and the completion of the Corrib field.”
“It is vital that Government commitment to capital investment projects are fulfilled in the interests of achieving balanced regional development. In addition, it is critical that Government commitment to tourism promotion of the mid-west as a competitive and appealing destination in the tourism market continues.”

Frank Cox –
Managing Director Roche Ireland

THE recently appointed managing director of Roche Ireland, Frank Cox believes there are a number of areas that could be targeted to provide a kick-start to the economy in the mid-west.
“Spiralling energy costs are hugely impacting on manufacturing costs while also negatively impacting on the buying power of the individual. Urgent intervention on this burden by the Government is a necessity for both business and the individual.”
Mr Cox, who took over from long-serving managing director, John Liddy at the Clarecastle plant earlier this year, says manufacturing costs continue to spiral, driven by these energy costs and also by employee costs and the cost of services. Fiscal stimulus such as tax cuts would provide a significant kick-start rather that following a model of inflationary chasing wage increase.
“The Government must provide strong leadership and restore business confidence in Ireland as an attractive manufacturing location capable of attracting the necessary inward investment. Demonstrated commitment in research and development and innovation is essential to long term development.
“On a local level, the immediate restoration of the Shannon-Heathrow service and adding further connectivity to key business centres should be a priority. Establishing commercial independence for the Shannon Airport Authority is also critical.
“The provision of an international standard conference facility for the mid-west, the accelerated completion of the Shannon Tunnel and M7 and N18 projects would provide not only a kick-start but a jump start to the local economy,” he concluded.