'Honestly I don't know' - Aryzta's Gary McGann on whether he would have taken chairman role knowing extent of company problems
Aryzta chairman Gary McGann has said he honestly doesn’t know if he would have taken on the role if he had known just how bad the company’s problems were.
Mr McGann became chairman of the frozen food group in 2016, and recently oversaw the raising of €800m from shareholders. The controversial plan was narrowly approved by Aryzta shareholders last year.
Speaking at day two of the Pendulum Summit in Dublin, Mr McGann said that had he known the extent of difficulty the company was in “I'd like to think I'd be Braveheart and go in, but honestly I don't know.”
On whether it has been the biggest challenge of his career he said it is certainly a big one, “but like most challenges, the challenge is greater if you don’t have the talent, and there is a very talented team.”
“There is still plenty of work to be done, it has been a multi-year problem and it will be a multi-year turnaround, but at least we have the basis for that now,” he told Independent.ie.
“It is a business with a very strong history and there are some great people and some fantastic assets, the raw material is there and we have put a team together that are very committed and driven, but it’s a challenge that is no doubt,” Mr McGann added.
Along with the Aryzta, Mr McGann also sits as chairman of PaddyPower Betfair.
With increasing regulation in the industry he said the company is very clued into the changes that are facing the industry.
“All businesses face challenges, in the world of PaddyPower Betfair the challenge is trying to understand what the regulator is trying to achieve, the context in which the regulation is put in place and to work with it, and certainly PaddyPower Betfair is very clued into that,” Mr McGann said.
“The only way to have a long-term sustainable business is to work within the norms and the standards that are required to be successful, and regulation is part of that,” he added.
He also acknowledged company’s potential for expansion in the United States.
“Certainly for the industry the US has huge potential, it has a sports-mad population… it means it's an enormous business opportunity, but there are a lot of players and a lot of mouths to feed and a lot of complexity.”
Commenting on his time as chief executive of Aer Lingus in the early 1990s he said that he was not anti-trade unions, however “unless people are prepared to sit down and face realities, I have no time for them.”
In addition, McCann said he always believed the Government is a bad shareholder in a company, because from the point-of-view of the business management “you don’t know if they will be around in three, four years”.
He explained that this is too short a time frame for companies, adding that Government’s are regularly held captive by trade unions.
Turning to the Irish economy, and Mr McGann warned that unless the funding model for third level education is addressed, the levels of third level output will decline.
“I find it a total paradox that we have among the best businesses in the world here, Irish indigenous international companies like Smurfit, Kerry, Glanbia, CRH, we have world class arts, music, and sport, and we can’t house people, we can’t put hospital beds in for the ill and the aged, and we haven’t a funding model for third level education.
“And that’s the most serious of all, the levels of third level education output will drop as a result of a lack of sustainable finance, and if we don’t address that we’re in trouble.”
“We are benefitting from having had great output, but if the places are being taken by foreign students to pay the bills that are not being paid by Irish students we’ll have problems,” he added.
On the current problems with housing, Mr McGann said it is not being helped “by all sorts of barriers being put in the way and we have to solve it and solve it urgently.”
“The one bottleneck that will always stop an economy is unavailability of labour, and if you can’t house people or they have to live two hours away and commute, and they have a child minder etc, the economic model breaks down and we have a huge problem and it will get worse,” Mr McGann said.
He added that the biggest barriers are zoned land for building.
“Affordable housing can be built, we have demonstrated that. And I don’t blame politicians, I think we really have to rethink the model.”
“I believe most of these things can be helped by public-private [partnerships] solutions. There is a lot of talk going on but we need to move.”