Ireland has a very taxing battle on its hands
It could be two to three years down the line before it manifests itself as far as foreign direct investment from the US is concerned, according to the newly elected chamber president Gerry Kilcommins. The reality is that most big firms looking to invest overseas have their plans in place two to three years in advance.
So by the time we fell on our collective national sword and bowed to the ignominy of having to be bailed out by the IMF and our European partners, decisions on investment for 2010/ 11 were probably already taken.
Kilcommins has taken over as president of the US Chamber of Commerce in its 50th year but has been around the block with the big multinationals with long experience under his belt of working for that powerful global business sector.
Kilcommins previously worked with Becton Dickinson, a leading global US medical technology company. He currently heads Medtronic’s Galway operation which provides on site jobs for 2,000 people.
In contrast with last year the chamber and Kilcommins put a lot of focus on the damage limitation issue.
Their standard whinge in recent years has been the need to protect the 12.5% corporation tax.
As we face into 2011 Kilcommins believes we have a damage limitation issue on our hands that has to be addressed, given the loss of international standing caused by the banking crisis and more recently the IMF/EU bailout.
Given the new president’s experience of the US multinational sector if he says we have suffered reputational damage in the US then that must be a cause for concern.
It is clear from his travels in the US and his rubbing shoulders with those with an interest in Ireland, that questions are finally being asked about what we have been getting up to in this troubled land of ours. He is of the view that we have to counteract loss of reputation at Government business and semi-state level.
We have to put the message out there that Ireland is still open for business.
If Kilcommins is right, and given the banking crisis has been playing across the globe since September 2008, it is likely potential investors may have already been frightened off investing here, assuming the banking crisis and our fiscal problems would have registered with those in the know long before now.
In that sense it may be even too late for damage limitation and we may just have to suffered the consequences in the short term.
He says there is an issue right now and the government machine needs to kick into action deploying embassy staff and state agencies to get the message out there that this economy hasn’t gone away and that its food and global manufacturing sectors are very much alive and kicking.
The American Chamber as usual raised its concerns about the 12.5% corporation tax and its importance as a core factor in getting US firms to set up here. If we lose the battle on that the damage could be huge.
Foreign direct investment here is hugely significant. Up to 600 businesses from the US have Irish bases and employ 100,000 people. That’s 75% of all overseas generated jobs in this country. Despite the generous tax regime they handed across €3bn in corporation tax to the State last year.
The real worry now is that we could be forced to concede on the corporation tax issue which would be a catastrophe.
