Another profitable company cutting jobs

norrie rugger

Diageo is letting another 100 people go, in Ireland. Moving people to Budapest and London, and scrapping some roles completely.
Diageo Ireland made €180M in profit, last year

What are your views on companies using the downturn to shed jobs, while still making hundreds of millions, in profit? Should (could) the companies be penalised, during the budget?

Irish_Elect_Eng

It is perfectly acceptable. (Depending on your political/social viewpoint)

Corporations are answerable to their shareholders, nobody else.

Their reason to exist is to make money for those that invest.

They have no social employment remit.

Basic Capitalism 101

Are you suggesting making Ireland a bad place to do business?

Can you explain how that would increase employment?

norrie rugger

Irish_Elect_Eng wrote: »

It is perfectly acceptable. (Depending on your political/social viewpoint)

Corporations are answerable to their shareholders, nobody else.

Their reason to exist is to make money for those that invest.

They have no social employment remit.

Basic Capitalism 101

Are you suggesting making Ireland a bad place to do business?

Can you explain how that would increase employment?

Not at all but we bend over backwards, to facilitate these companies.
I think that tax breaks, grants, government related benefits should be weighted in favour of companies that support the Irish work force

RATM

Irish_Elect_Eng wrote: »

It is perfectly acceptable. (Depending on your political/social viewpoint)

Corporations are answerable to their shareholders, nobody else.

Their reason to exist is to make money for those that invest.

They have no social employment remit.

Basic Capitalism 101

Are you suggesting making Ireland a bad place to do business?

Can you explain how that would increase employment?

That's where the whole thing falls down. Regardless of politics corporations should have greater responsibilities for what economists call 'externalities' i.e. the costs to society in producing their goods that are borne by society and not the corporation. An example would be the pollution of the industrialised world which has a large part to play in global warming. Eventually this has to change, as the road we are on is unsustainable.

To answer the OP, Diageo are perfectly entitled to move jobs to cheaper nations to operate in. The way these things (usually work) is that as economies progress and move away from manufacturing the jobs lost are replaced by higher skilled ones and that by and large has been the case in Ireland over the last 30 years. When Intel first came here in the 1970's they were manufactuing computer chips. Nowadays their operation is mainly R&D which is associated with jobs that pay much much higher than working on an assembly line.

The Diageo thing still stinks for those out of a job though. There a few months ago they got their photo ops with the Queen and Obama, which amounted to free PR for them worth millions, just the same way that surfing the wave of 'Brand Ireland' has made them millions over the years. What stuck in the throat was that less than 24 hours after Obama and the Irish government were providing them with free PR they announced the loss of 80 jobs.

They didn't even have the dignity to wait a week to announce it, I bet the workers there were absolutely sick about the manner in which it was done.

Irish_Elect_Eng

norrie rugger wrote: »

Not at all but we bend over backwards, to facilitate these companies.
I think that tax breaks, grants, government related benefits should be weighted in favour of companies that support the Irish work force

Yes, we give grants to attract companies to Ireland, as do most counties now.

But, most of the companies that have received grants have pumped many multiples of the grants that they have received back into the Irish economy through wages, taxes and the products and services that they pay for from Irish companies.

The Grant-to-Job ratios has the best ROI when the government invests in the large multis. But that is not to say that the government should not be investing more heavily in Irish SMEs, but from an investment point of view our public money is better spent in the larger corporations.

Healthy companies only keep the optimum number of employees on their books, thus creating sustainable businesses. Thankfully we are seeing a trend towards the knowledge economy, with companies increasing their R&D spend here. The government is actually doing a good job in supporting R&D at the moment, there are a lot of highly qualified Irish people in jobs that would not exist except for governmental initiatives. It would be nice to see some more support for Irish start-ups, some sort of incubator package would be very attractive.

kennyb3

The big thing i dont agree with is the 60% rebate of the statutory element of the redundancy payment.

Why give this 60%? It lowers exit costs.

Does anyone know the reasoning behind it?

Monty Burnz

norrie rugger wrote: »

Diageo is letting another 100 people go, in Ireland. Moving people to Budapest and London, and scrapping some roles completely.
Diageo Ireland made €180M in profit, last year

What are your views on companies using the downturn to shed jobs, while still making hundreds of millions, in profit? Should (could) the companies be penalised, during the budget?

Companies have a duty to run themselves as efficiently as possible. If they can run more efficiently with fewer employees, then they will do so. It's as simple as that.

Mrs OBumble

Irish_Elect_Eng wrote: »

Corporations are answerable to their shareholders, nobody else.

Their reason to exist is to make money for those that invest.

They have no social employment remit.

Basic Capitalism 101

Are you suggesting making Ireland a bad place to do business?

Can you explain how that would increase employment?

Ahh, the bold bit isn't strictly true.

In most countries, companies are answerable to the law of the land, via the justice system. They have to pay taxes, maintain health and safety conditions, pay minimum wages, not disciminate based on the country's selected criteria (in most Western countries these include age, gender, ethnicity at least).

That said, I don't believe it's wrong for them to make a profiit (after all, profit is what they pay their tax on), or to make hard decisions that maintain their future profitability. Yes, it's hard on the workers involved. But the opposite (state-run centralised economies, AKA communism) is demonstrably worse.

Dannyg90

the drinks industry in Ireland is falling with the sales of Diageo products like guinness falling every year. Its perfectly ok for Diageo to leave when times get tough here no matter the government incentives it received in the past. Thats the way business works i'm afraid

bbam

As mentioned this is just Capatilism at work..
Make your product where it can be done cheapest.... Make as much money as possible along the way...

We're just making the same griping as the americans who complain about American jobe being based in Ireland rather than the states...

My curiosity is when, down the line when Aisan living standards are up and labour costs are up in aisa... Will the jobs go to Africa ? Then what...?

We can't pealise companies for decisions like that... not one more cent would be invested in Ireland again.

Monty Burnz

bbam wrote: »

My curiosity is when, down the line when Aisan living standards are up and labour costs are up in aisa... Will the jobs go to Africa ? Then what...?

Then capitalism will have dragged the whole planet from poverty to wealth.