Business Briefs

By Harry Keaney

When a company plans to float on the stock exchange, one of the last things it needs is turbulence in the ranks of its top management. But that is exactly what happened toward the end of last month with Telecom Éireann, the Irish semi-state telecommunications company which hopes to float on the New York Stock Exchange this summer.

First came the resignation of board chairman Brian Thompson, 58, a high-profile American telecommunications executive, after he joined McLean, Va.-based company Global TeleSystems Group as its chairman and chief executive. GTS is backed by billionaire George Soros.

The minister for public enterprise, Fianna Fail’s Mary O’Rourke, then appointed Ray MacSharry to succeed Thompson, and this immediately led to questions about MacSharry’s experience in the telecommunications business.

The Irish government then appointed another American, William Ferguson, to Telecom Éireann’s board. Ferguson is a former chairman and chief executive of the NYNEX Corporation, which recently merged with Bell Atlantic. He has also held senior positions with Michigan Bell and New York Telephone.

After MacSharry’s appointment, Telecom Éireann’s deputy chairman, Ron Bolger, also resigned. Bolger had been chairman but had stepped aside to make way for Thompson.

As to assertions that he lacks experience in the telecommunications business, MacSharry pointed out that seven of the 12 members of the board of Telecom Éireann are directly involved in the company’s day-to-day business.

MacSharry was first appointed to the board of Telecom Éireann as a non-executive director. He is one of the country’s most successful politicians, rising from local Fianna Fail politics in his native Sligo to become Ireland’s agriculture minister and, later, finance minister, when he became known as "Mac the Knife" for his pruning of government expenditure.

The culmination of MacSharry’s political career was his appointment as European commissioner for agriculture.

He is now a successful private businessman and is on the boards of several companies, among them Bank of Ireland.

Thompson’s resignation and its fallout are not expected to have a negative affect on the flotation of Telecom Éireann which, analysts say, has a strong management team.

Next up, the Telecom Éireann investor roadshow in the U.S.

Keeping the West awake

Much is made these days about the fact that Ireland’s relatively young workforce is the best educated ever. But, it seems, not all areas of the country are benefiting from this emphasis on education. According to a recent report, only 15 percent of people in the counties Sligo, Leitrim and Donegal have a third-level qualification. This compares to 19 percent in the Republic as a whole and 24 percent in Dublin. Furthermore, the average annual salary in Sligo, Leitrim and Donegal is £11,600, compared with £16,395 in the state and £18,400 in Dublin.

Exports threatened

Up to £13 million worth of Irish exports could be affected by U.S. plans to impose trade sanctions on certain European Union goods in retaliation for an EU ban on hormone-treated beef from the U.S.

Goods on the list will be subject to 100 percent tariffs from May 13 unless a resolution is found. The goods include pork, poultry, ham, bacon, certain types of chocolate and yarn.

Owen Brooks, director of international markets at the Irish Food Board, said the inclusion of pork and bacon in the list put about £3.7 million worth of exports at risk. Including confectionery meant another £1.3 million were threatened.

One of the Irish companies likely to be hit is Dairygold, which exports its Galtee brand of bacon to the U.S. The inclusion of mineral waters could affect businesses such as Ballygowan and Tipperary mineral water. Others that may be affected include Odlums (oats), Cadburys (chocolate), Erin (soups) and Chivers (jam).

Net jobs loss

As many as 60 jobs may be created in Lifford, Co. Donegal, after sporting goods maker O’Neills takes over the former premises of Donegal Shirts.

Donegal Shirt’s parent company, Austin Reed, has said its Lifford plant is to close with the loss of 136 jobs. O’Neills is to advertise to fill the positions.