Print this page
Email this to a friend
Discuss this article (0 Comments)
POST A COMMENT
Mobile
-
Internal Auditor (UAE Nationals/Emirati)
Industry: Finance
Location: Abu Dhabi, UAE -
Treasury Sales (Derivatives)
Industry: Finance
Location: Kuwait, Kuwait
Oiling the wheels
by James Bennett on Sunday, 18 March 2007
What a shocker! The news that major oil and gas service company Halliburton is relocating its HQ to Dubai from its good old-fashioned hickory steakhouse town of Houston, Texas, has been met with a barrage of consternation, criticism and contempt from several leading US business and political figureheads, including Democratic White House hopeful Hillary Clinton.
Is it me or haven’t we seen this ‘leap before we look kinda attitude’ before, partner?
And wasn’t Mrs Clinton leading the same crowd of critics last year when she and other senators decided to attempt to block Dubai Ports World’s bid for UK ferry and ports business P&O? Oh yes siree she was.
The same common misconceptions were lined up 12 months ago and have again been delivered in similar ranting fashion over the last week. Concerns over how a major US company is able to securely operate and make decisions that could influence its population and its military while based in an Arab country is the first mishit volley. What many of these detractors fail to realise is that we live in an international community where business can be done in a split second from anywhere and with anyone on the planet. Then comes the fear of outsourcing as well as potentially shifting human resources from a home-made company to the Middle East, encouraging potential job losses, draining talent and damaging the ever-weakening US economy and its frail greenback — the trouble is, many other countries have been operating in this way for 20 years and they've boomed.
India and the UK are two great examples where companies have relocated to seek a greater talent pool in sectors such as IT as well as seeking a base where they can access other parts of the globe more easily.
Dubai is perfectly positioned for Halliburton's access to Chinese, Indian and Russian customers.
Jeffrey Immelt, chairman of General Electric, told me excitedly a few weeks ago that 50% of both its employees and its business interests are from outside the safe ground of the US. The same goes for Halliburton with a third of its revenues now generated from the Middle East and Asia. He realises times are changing and work patterns are shifting.
It’s called globalisation and he is one of its greatest advocates. Simply put, the slammers should realise just how many US companies have already done the same.
Just look at the likes of Microsoft, IBM, General Motors and Shell. The mega players have all set up regional shop in the emirate and it’s paying off.
Then finally came the combined calls of “tax evasion”, “corporate greed” and “overcharging” the military for ‘no bid’ contracts. Cynics suggest that in relocating to Dubai Halliburton could escape emerging scandals including a possible inquiry into alleged bribery activities between the company and Nigerian officials back in 1995. According to ABC News, Halliburton is also already being investigated by different government agencies for various allegations of improper business dealings, and is being probed by Democrats in Congress for alleged over-billing that could total almost US$3bn.
All this doesn’t look good. It’s only here that, despite the strong words, some of the angry parties may have a point. These accusations will need to be cleared up in ultra quick time if Halliburton’s shaky reputation is not to be damaged any further. Clinton herself, called it “disgraceful that American companies are more than happy to try to get no-bid contracts like Halliburton has, and then turn around and say, ‘You know, we’re not going to stay’.”
These calls require further investigation and this will inevitably come, but in the first instance let’s give it a little time. It will only be when the company, and its chairman, president and CEO David Lesar settles into Dubai, that we will see if these calls can be truly justified.
For now we should concentrate on the bigger picture and what matters most, that one of the largest companies in the world, however controversial, has strategically relocated its decision-making structure to the Emirates — one of the biggest coups the region has ever seen.
The Middle East and Dubai in particular, is building up an incredible portfolio of international companies based within its sand-blown borders.
It has the world’s biggest names in both Western and Islamic banking, private equity companies, management consultants, corporate advisors, investment houses and aims to attract a fifth of the world’s hedge funds.
The attraction is far from on the wane.
If this continues then the US and the rest of the world will have to let go more than just a Texan energy business. The only question that remains is who’s next?
