March 2010 Archives
"The vote is the most powerful instrument ever devised by man for breaking down injustice and destroying the terrible walls which imprison men because they are different from other men."
I admit that the quote doesn't really trip off the tongue and, in these more-politically-correct times, it does tend to suggest that the campaign for women's suffrage has some way to go. But it is genuine, was said by an historical figure of note (former American President, Lyndon B Johnson) and it makes a very, very important point. Democracy really is good for you; or, for the most cynical amongst you, a damn site better than any of the alternatives.
Ford has finally sold off its loss making Volvo subsidiary to Geely in an estimated ÃÂ£1.3 billion deal. It ranks as the biggest purchase of a Western car brand by a Chinese auto firm, as well as one the biggest outward foreign investments by any Chinese firm.
Ford has lost heavily on Volvo, having paid over $6 billion for the firm back in 1999. Volvo has been loss making since 2005.
The Volvo purchase highlights China's emergence in the global car industry, and comes after Nanjing / Shanghai's purchase of MG back in 2005.
China is already the biggest car market in the world (over 13 million cars were sold last year in China) and the Chinese government wants to develop a globally competitive car industry which exports Chinese made cars and which produces in different markets around the world.
This week it was confirmed that Shanghai Auto (SAIC), the owner of MG Motors UK based here in Birmingham at Longbridge, plans to assemble an MG badged version of its newly unveiled Roewe 350 hatchback at Longbridge and to sell the cars in the UK and Europe.
Chen Zhixing, Executive Vice President of SAIC (and boss of SAIC's own brand vehicles) made the announcement last week in Nanjing when celebrating the first Roewe 350 to roll off production lines at the Pukuo plant.
The new car targets the C Segment of the market, and will compete against the likes of the Ford Focus, Vauxhall Astra and VW Golf. The car comes with a 1.5-litre petrol engine, front wheel drive and 5 speed manual gear box.
The budget contained good news for the wind lobby - not only is the new Green Investment Bank to have an early focus on wind farms, but the offshore wind sector is given an additional boost with the announcement of up to ÃÂ£60m to develop port sites. This will be made available to potential site developers on a competitive basis.
A week after its first reading, the government's new Digital Economy Bill is proving as popular as a burning orphanage with Birmingham's digital community.
But the government was never going to win on this one.
We were promised no pre-election gimmicks or giveaways, just a 'sensible and workmanlike' budget. Things didn't get off to a promising start with the widely predicted temporary scrapping of stamp duty for first time buyers on properties up to ÃÂ£250k - funded by a hike in stamp duty for properties above ÃÂ£1m (you'd never guess an election was around the corner).
Anyone listening to this year's Budget could be forgiven for thinking that only wealthy people will be paying increased taxes to rebalance the Budget.
There was much vaunting of the high rates of tax and the reductions in relief to be suffered by the 'better off'.
Darling mentioned the 1p increase in NIC and the fact that it would not affect anybody earning less than ÃÂ£20,000. What he did not say, was that the 1% increase is on both employers and employees, making an effective 2% increase to fill the coffers.
I've highlighted in previous blogs the huge cost of takeovers in terms of the money sucked out of firms involved in such battles by the army of advisors brought in on both sides (see here for example). I have described this as a 'takeover tax' on the rest of the economy.
Now the debate on takeovers is hotting up after Lord Mandelson's Mansion House speech last month when he asked for a re-think on how the system could be reformed in the wake of the Cadbury takeover, and the Association of British Insurers (ABI) has waded in.
The ABI, which is Britain's leading group of institutional shareholders, has written a fascinating open letter to Mandy which can be read here.
What's remarkable is that the ABI is hardly the last bastion of socialist thinking but it has made a critical point on the "enormous" fees paid to investment banks for advising companies on deals which might be skewing the outcome of takeovers.
Following this post, which created some debates among construction professionals - and I've received various positive and negative feedback - we've wondered in the office: How to help the future leaders of the construction industry to be more charismatic? How to help them, especially the few women, to have the confidence to stand out from the crowd and close more deals in the current environment?
After reflexion, we've decided to run a series of 'Lessons in Influence & Persuasion', aimed primary at young construction professionals, but anyone is welcome to attend.
As readers of this blog will be aware, I'm not a big fan of mega takeovers.
They usually fail. Costs often go up not down and the resulting disruption can demotivate workers and lead to an executive brain drain as key top staff jump ship rather than facing being ground down by restructuring and upheaval. That brain drain can last for years, as research has shown, and can undermine firm performance.
Kraft's integration of Cadbury now involves them deciding which top bosses from both firms stay on and in what roles. It's being closely watched as Kraft begins the huge job of putting together two big businesses and screwing out enough in the way of 'synergies' (read cost savings) and extra growth to justify the $19 billion spent on buying Cadbury, much to the chagrin of big Kraft shareholders like Warren Buffet (who by the way never had a say on the takeover).