MOODS can change quickly, whether it be the economy or a party.
Such was the case at Flemington, where news of flagging sales figures, liquidity woes and pending job losses dominated morning discussion in the marquees of the Birdcage on Melbourne Cup day.
At the Saab marquee on millionaires' row, boss Parveen Batish lamented just how much the world had changed in a year.
Twelve months ago he had a waiting list for his Hummer brand, a new model Saab convertible on the horizon and the launch of Cadillac in Australia on the cards. Since then we've had the subprime crisis, global credit crunch and introduction of the luxury car tax. At head office, a merger with Chrysler has been mooted.
"Now we are looking at a very tight market," he told BusinessDay. "Certainly the whole playing field has changed since last year."
Nowhere was the change more evident than the Macquarie Bank tent. Last year it was a steel-framed fortress, where DJs pumped out pop music while cashed-up bankers partied. This year a much more sombre mood prevailed. Gone were the DJs, while black was the prevailing dress code in these dark times. The steel-frame cage was replaced with wide, open windows. Mac Bank may as well have hung an "open for business" shingle at the door.
But not all have done so badly. The mood was still upbeat in the nabCapital marquee. Maybe it had something to do with the Reserve Bank decision that Australian operations boss Ahmed Fahour had tucked in his top pocket.
"We've had our tough times," Fahour said. "In the past four years we've turned this bank into one of the most efficient operations in the country and we now have the opportunity to grow the business. Other companies have been forced to react to the economy. Ours was already running lean."
Little wonder that Fahour backed Efficient in last year's cup, although this year he was on Mad Rush. "That pretty much sums up what some companies are about at the moment," he quipped. "But not us."
Fahour was giving little away on the RBA rate decision, but his smile said it all.
The mood at Flemington changed at 2.30pm, with news that interest rates had been cut by 0.75 percentage points. It was certainly welcomed by the management team at the Emirates tent, including several leading players from Dubai. The airline will have a 33% increase in passenger seats out of Australia by February, including the arrival of the Airbus A380.
Little wonder Emirates' Australia vice-president Stephen Pearse, group vice-president of sponsorship Boutros Boutros and senior vice-president for east Asia and Australasia Richard Vaughan were all smiles by mid-afternoon. "Good news," Pearse said of the rate cut. He was standing on the balcony of the Emirates marquee with federal Infrastructure and Transport Minister Anthony Albanese when the news came through. "But maybe also a reality check about just what state the economy is in. I think there's more pain to come, but this will really help consumers. It's a good message."
Another joining them on the balcony was former Telstra director Steve Vizard, making a return to the corporate A-list after a few years in the wilderness following his insider trading woes. It was also all smiles after the news at Myer's fabulous marquee, where much of the board was entertaining on the big day.
"We had a board meeting last week and I said to the directors that the economy is in for a tough time, that things are going to get worse, that we have to be prepared for this," said Myer executive chairman Bill Wavish. "The Americans thought I was an optimist after all that. No matter how bad things are here, it's much tougher in the US and Europe." Continued…
