This is mainly due to the protectionist sounds emittaed by president-elect Obama during the marathon election campaign, in which he suggested that he may tax US multinationals on global earnings.
Such a policy could make Ireland a less desirable place to do business, thus reducing the efficacy of our 12.5 per cent corporation tax rate in the process.
With neither Bausch & Lomb nor Genzyme issuing statements following the Obama win, and the undoubted policy specific deficit destined to feature during the transition in Washington, the subsequent void will be inundated with speculation.
While congratulating president-elect Obama, the American Chamber of Commerce in Ireland issued a statement attempting to address elements of that speculation.
“Until such time as the new administration is in place and outlines the detail behind these proposals it would be previous to try to ‘second guess’ how any changes might impact on Foreign Direct Investment (FDI) in Ireland,” it read.
“There is no doubt however that the US is going to focus on getting a greater corporate tax take from its multinational corporations. It would appear that a primary focus is on tackling known tax havens such as Bermuda. Ireland is seen as a low tax jurisdiction – not a tax haven.”
The American Chamber noted that Ireland had not been listed on the ‘Obama Bill’, unlike Luxembourg, Switzerland and Singapore.
“Ireland enjoys a strong tax treaty with the US and the Irish Government’s policy of transparency and full disclosure protects low tax status,” the Chamber statement added.
The Chamber stated that American companies investing overseas “do so for many reasons, not least to be closer to their customers, to access talent and to make profits”.
Read the statement: “Ireland continues to offer many advantages to companies locating here including a stable, consistent and pro-business environment.
“Ireland must ensure that it maintains this environment while at the same time ensuring that our corporation tax rate remains competitive in light of any changes introduced to the tax code in the United States.
“Despite many challenges in the past decades Ireland has succeeded in building and maintaining a reputation as an excellent location for foreign direct investment… “While any job losses are regrettable, it is worth noting that we are still winning more jobs than we are losing.
“As long as we remain competitive, continue to be value driven, are tax competitive and offer a compelling proposition to foreign companies we will continue to attract and retain investment to Ireland.”
Bausch & Lomb, Waterford city’s largest employer, will close three days earlier for the Christmas break on December 18th, with the company also understood to be seeking other cost reduction measures.
Genzyme’s long-term commitment to Waterford looks assured, with president-elect Obama’s win coming just days after engineering firm Jacobs won the contract to extend the Old Kilmeaden Road facility.
Some 170 new jobs are to be created thanks to the biotechnology firm’s €130 million investment, which will see Genzyme’s Waterford-based workforce grow to over 600.
What’s also known is that the meeting of Offaly-linked minds in the Oval Office on Saint Patrick’s Day for the traditional bowl of shamrock pow-wow between President and Taoiseach has been confirmed. Sure we can all breathe a little easier on the back of that news.