McDonald’s gets a new ‘image’; Madoff and the slow wheels of justice; Looking for a new financial regulator; No going rate for legal fees
McDonald's chips in to defy recession with new outlets
ANYWHERE YOU don’t need a knife and fork to eat tends to do quite well during a recession, according to one dog-eared old food service truism, and McDonald’s chipped in to the theory yesterday by proving its own recession-resilience.
The Irish Timesdidn't make it out to the opening of its new "Scandinavian"-themed restaurant in Maynooth, but according to the press release, the outlet "incorporates a bright, open plan achieved through the use of natural material such as wood and leather". None of that nasty yellow plastic business for Maynooth's peckish student population – leave that to Ryanair.
The €2 million outlet, which will employ 60 people, will be followed by two further openings in 2009, in Portlaoise and Wexford, plus 14 refurbishments of existing restaurants. McDonald’s Ireland managing director John Atherton calls these “re-imagings”.
Despite the perceived need to rearrange the furniture, McDonald’s conservatism is now paying off. Unprepared to chase escalating rents during the boom, the number of outlets stayed static in the early part of this decade, when there were fewer value-conscious consumers around to devour its Euro-saver menus. The Maynooth opening now takes its Irish chain up to 76.
But while the slump might be making the glow of the golden arches that bit brighter for cheap treat seekers, the rising number of people patronising McDonald’s for the first time is being offset by lower revenues from its regulars.
“We’re not blowing the doors off during the recession,” Atherton says. Turnover hovers at the €190 million mark. Still, there are not many businesses that can say they are actually creating jobs.
Internationally, McDonald’s has been terribly keen to shake off the sneery McJob tag popularised in the early 1990s by the Canadian novelist Douglas Coupland. In Ireland, it has sought to get all of its training programmes accredited. According to Atherton, a McDonald’s veteran with 27 years’ service, the average length of service for one of its restaurant managers is nine years, while kitchen employees – often first-jobbers – stay an average of two years.
So mine’s a double quarter pounder with cheese meal. With a Diet Coke, please.
Time for some ruthless action on Anglo Irish
THE WHEELS of justice turn very slowly indeed. Consider Anglo Irish Bank, whose near-collapse has already done untold reputational damage to Ireland and whose rescue was underwritten by €3 billion from taxpayers this week when Brian Lenihan dipped into cash balances held by the Exchequer in the Central Bank. That’s not half the Exchequer exposure, by the way, for Anglo may ultimately require €7.5 billion.
The rot in the bank started to spill into the open in December when the true extent of what went on at the bank was made public for the first time. First there were the directors loans and then the Irish Life Permanent lodgements and the secret placing of a 10 per cent stake in Anglo to 10 of its clients. The appalling consequences of the Anglo debacle are such that the requirement for those responsible to be held publicly accountable for their actions grows by the day. These matters are variously under investigation by the Garda, corporate enforcer Paul Appleby, the Financial Regulator, the Irish Stock Exchange and a clutch of other regulatory bodies.
Due process and the right to a fair hearing demand nothing less than a thorough-going examination of each issue in its entirety and every last piece of evidence. But maybe the time has come for some ruthless efficiency.
Wanted: financial troubleshooter
IT COULD be interpreted as a signal of the calibre of the person the Government is trying to hire for the role of director of financial supervision at the planned Central Bank of Ireland Commission that the advertisement for the job appeared in the Financial Timesfirst and then in The Irish Times.
The job is the old position of chief executive of the Financial Regulator, held last by Pat Neary. The Government is clearly casting its net widely to find a candidate with a strong international standing. It says the director will be responsible for all regulatory activities, including financial institutions supervision, markets supervision, and regulatory risk, policy and enforcement.
Obvious conflicts could arise between ensuring the stability of a financial institution and the market risks that may arise as a result of such measures.
Take Anglo Irish Bank, which benefited from short-term deposits of €7.5 billion from Irish Life Permanent . The sizeable deposits flattered the bank’s balance sheet at the end of its financial year, but also bolstered the stability of the bank. If such a scenario arose again, the new director could be pulled in opposite directions to protect the stability of the system while at the same time being cognisant of potential breaches of abuse rules.
Raising the bar for legal fees in High Court
THE ECONOMY is banjaxed and the main plank of the Government’s strategy is an international recovery lifting the Irish boat.
Many, if not all, economists are in agreement, however, that in order to effectively benefit from an upturn, the Irish economy needs to lower its prices and make itself more competitive.
While pay cuts are being accepted in some parts of the private sector, and pay cuts and pension levies have been imposed in the public sector, a real difficulty in this scenario is in the sheltered sectors.
Are doctors, lawyers, accountants, consultants, lowering their prices?
There is little by way of anecdotal evidence that they are.
Which brings us to the master’s court in the High Court earlier this week.
When the master, Edmund Honohan SC, was leafing through the documents in one case, he took issue with a reference to “Bar Council rates”.
There was no such thing, he said. There couldn’t be. It would be anti-competitive.
He was quite clear in his view that any such reference had to be a mistake.
The master’s court is usually filled with younger barristers, waiting for their case to be called.
There was a good laugh at the mention of the non-existent Bar Council rates. You couldn’t help but wonder.
Too late for Madoff's victims
THINK AGAIN if you think the sentencing of New York fraudster Bernie Madoff to 150 years in prison for masterminding the biggest financial crime in history smacks of ruthless efficiency on the part of the US justice system.
Madoff’s $65 billion Ponzi scam unravelled with great speed last December when he fell foul of the meltdown in the US economy. Unable to meet a spike in demand for withdrawals as predominantly wealthy investors rushed to protect themselves amid collapsing stock markets, the grey-haired villain simply ran out of money when new “investments” dried up for the very same reason. That was it.
Even after decades of fraud, Madoff wasn’t toppled by America’s regulators.
The Washington Post says a Securities and Exchange Commission investigator warned superiors in 2004 about irregularities in Madoff’s empire but was told to focus on unrelated matters.
And Madoff doesn’t really seem to have resisted apprehension once the game was up. He confessed his astonishing crimes more or less straight away and pleaded guilty in March to 11 counts of fraud.
The judge had a relatively straightforward task in handing down the maximum sentence. Justice done, yes, but much too late for Madoff’s many victims.
