Re: Re: The Question of Land

PVC King, thanks for that.

I hadn’t thought to make your point of a moratorium (A suspension of an ongoing or planned activity) on once off dwellings. That makes a lot of sense. Your suggestion to look at other areas of the market that might require service also makes sense.

You are all design professionals go off and find some niches in the market where there is a suitable demand for developments that hit what the market wanted in the last phase but couldn’t access; the cycle will turn;

. . . fire Dick Roche for creating the conditions for the Anglo Irish small plot development loan book creating site farmers and an army of developers who gained a small amount of equity to borrow heavily leveraged sums they were uncapable of meeting with their own resources.

I would like to develop upon that if I may.

I knew and worked for individuals during much of the Celtic Tiger years, who had developed quite sensible niches for themselves in the market and were quite expert at working within those nices. But my experience was as follows. The same people who enjoyed a sustainable business model, were constantly looking at what was happening around them. They saw all of these site farmers and small plot developers, who clearly had not got the same skill or experience. But were making orders of magnitude more profit, than the guy who had carved out a sustainable niche, and developed a good business process over many years.

You can guess the rest. The younger construction professionals who were looking to score a better pay check, got very abusive to the senior level construction professionals. Relationships deteriorated to a point to which they couldn’t be fixed. What are we doing standing here on the sidelines? Why not get on the Celtic Tiger team for the big win! Fianna Fail were almost proclaiming as much on their election posters. The logic was quite simple. Gee! If these wingnuts without any expertise can make a killing out there, then really s*** hot professionals like ourselves should do double the money.

So what happened towards the end of the Celtic Tiger in my experience, was a lot of sustainable small construction professional practices were dismantled and re-invented as boom-friendly organisations. Of course, that meant they went out and extended the company credit limit as much as possible. (Often buying up other small construction professional practices to hyper-boost the creation of a larger one) The banks were more than willing to fund these adventures. The banks biggest worry, was that another institution might jump in and grab the business instead. Banks were fighting defensive wars against one another, which didn’t allow them time to evaluate the big picture. The banks facilitated and encouraged the dis-mantle-ment of a lot of good, strong, sustainable business practices in order to give away more credit.

Of course, having broken up the older, less profitable business unit, these guys who re-organised their business to harvest more of the Celtic Tiger profits found themselves hung out to dry when it all collapsed in on them. But you can see why it happened. You can see the continued strain the senior construction professionals were under. Each year that went by, their older and more sustainble ‘niche’ business model appeared to look more pathetic beside the newer, faster and richer fly-by-nights.

It was difficult for senior construction professionals to keep less senior professionals contented. By not giving them large Celtic Tiger sized bonuses each year. (Of course, the less senior professionals wanted to buy houses, and needed those bonuses to sink into property for themselves. After all, what is the point in being a professional, if you cannot even afford your own house?) In many cases what happened was the directors were chucked out altogether and the young turks took over the castle so to speak. This was viewed as ‘progress’. It was viewed as sweeping out old ideas and in with the new. But the young turks were ultimately left with an over-leveraged castle and no Celtic Tiger to support it! Those castles are now up for letting.

I think this has really added to the avalanche of redundancies we have seen, and will continue to see. The only way for construction professionals to make hay while the sun shined on the Celtic tiger, was to develop huge combine harvester grade design teams, that could cut through acres and acres of work available in the larger jobs. The standard of team work and design services generally within those large teams was rubbish! (So people who have worked during the Celtic Tiger have not developed the best of habits often) It was a strange time the Celtic Tiger. The larger your design team and the worse the quality of its output, the more profit you stood to gain. Things were turned on their head, normal logic didn’t apply. That size that was so advantageous in the Celtic Tiger years has now become poison to a lot of businesses out there.

Lastly, I would like to include the following comment. A lot of construction professionals from abroad were encouraged to come to Ireland during the Celtic Tiger, as the requirement for more employees was acute. Often someone who arrived from a distant part of the EU zone, could be hooked up with a job in Ireland before the day was out. I remember at one stage, while working for a small 25-year old niche business, we had to purchase in labour for a job we had. Of course, we went out onto the job market and found we had to compete at Celtic Tiger sort of rates.

In return for paying a huge salary you often got someone who had very little English, was only fresh out of university and had no real clue about working in the real world. Even when you paid the Celtic Tiger going rates, the new employee still managed to complain that wasn’t enough. There was a better deal going down the road and would you match it? Many new arrivals did not feel too committed to a company. You could not attempt to offer training or their faces would pucker up, and they would threaten to leave you.

I need not tell you the impact it had on existing small business. When you realized that the new guy over in the corner with the broken English, was making double the amount that existing long time employees made. It was a horrible situation for small businesses to be in. On the one hand they were forced to purchase labour like this. But inevitably what happened, was for every new arrival you employed, one of your existing employees would lose their temper, quit working for you and decide to take the job down the road. When that happened, 10 years of knowledge capital would walk out the door, and you were left with a bunch of misfits. Of course now, everyone is now on their backside, and none of this matters any more.

The Celtic Tiger years didn’t offer a sensible approach towards the integration of good foreign expertise with existing Irish teams. I am not pleased about that myself. Because we had an opportunity to avail of the best ideas from around the world. To use those ideas to help us to build a country worth living in. The above explains why we need to be careful about the ‘Land Issue’ in Ireland. Learning how to understand land and its problems in Ireland is going to faciltate a much brighter future for Ireland. What more can I say?

Brian O’ Hanlon