21/04/2016 BBC Business Live

This is Business Live from BBC News, with Ben Thompson and Sally Bundock.

Volkswagen set to announce it's buying back

around half a million diesel cars in the US.

It will also pay over $1 billion in compensation

Live from London, that's our top story today, Thursday 21st April.

VW makes a deal with US authorities after rigging emissions tests,

but who gets what and when is still to be determined.

And other car-maker in the headlines for fiddling its tests, Mitsubishi

officers raided by authorities after admitted falsifying data. Their

shares were not traded at all, they fell so much yesterday. Their shares

have slumped more than 30% since the story first broke. And the science

behind making milk taste better, one firm says it is all about the type

of protein, and with shares up nearly 200%, visit the cat who got

the cream? It is certainly milking the market in China. We will speak

to the boss. And are you fed up with upgrading your phone, tablet or

computer - there is a growing movement of people pitching new

technology and making the old trusty device last longer. Are you an

upgrade junkie or rely on traditional technology? Get in

touch. Volkswagen is trying to draw a line

under the torrid affair that saw it rig emissions tests

around the world, by fitting 11 million diesel cars

with cheat devices. Last year, apologies came thick and

fast after it used a cheat device to flatter test results. The dealers

said to cost the car-maker over $1 billion, although how much each

owner would get is still to be finalised. Volkswagen is expected to

give more details of the deal to a federal judge later today. In March,

the judge gave VW until today to announce concrete proposals for

getting the polluting vehicles off the roads. Sally.

With me is Catherine Hutt, from the automotive and transport

Nice to see you, Catherine Ben outlining the options open, with

regards to VW fixing this situation, reports say they are going for

buying back cars, what's the make of that? I think it is a really

important step for VW to give the consumer choice. Consumers are

really wanting that choice, and it is important for the industry as a

whole that VW reaches an agreement, and we can move on and show a line

under this. We also saw that the markets responded positively in the

US, with the US base to VW shares up 6% on the announcement that they

would reach a settlement, rather than going to a lawsuit. I think it

is a positive step forward. What is also really important is, from an

investor's point of view, uncertainty is the enemy, so it is

not just the figure that is important of how much it will really

cost, but also the time involved, because the longer this drags on,

the more damage and is going to do. I think it is really positive news

that we are hearing, that they will reach a settlement and we will get

some clarity. I know you and said the big number is not necessarily

the issue, we are weighing it up, some are saying it could be about

$30 billion in terms of cost to VW, but overall how costly is this for

Europe's biggest car-maker? A very strong brand in the car industry,

everything, reputation, financials everything, reputation, financials

et cetera? I think the figure we do not know yet, and time will tell, so

we will have to wait and see on that front. In terms of how damaging it

has been, I think that varies across the globe. You can see in the states

that sales have dropped 10% in the last month, in one report, versus

Europe where sales have dropped just 2% in the last month. Compare that

to China, where sales have increased to 3.6% in the last month. And the

impact on Volkswagen is really influenced by those figures, but it

is not a one-to-one correlation, because Asia-Pacific and

particularly China represents about 40% of Volkswagen sales globally, so

that really helps them out and help them weather the storm, which is the

production of sales in Europe, which accounts for about 35% of Volkswagen

sales globally, talking about the Volkswagen Group. Although the 10%

reduction in the US is painful to Volkswagen, actually the US only

accounts for 10% of their global sales. So you can see how, yes, they

are worse off in terms of the reduction in sales, but that growth

in China is really helping them. Catherine, we appreciate your time.

It would seem that VW could be weathering the storm, that is for

sure. Staying with car emissions, Mitsubishi Motors is also in the

spotlight after admitting improper testing of fuel efficiency. Its

shares did not traded a in Japan because so many people wanted to

upload the Mitsubishi Motors Stark, trading did not take place at all.

It is quite complicated, in fact. Karishma Vaswani can explain, the

stairs did not trade but still managed to fall? -- shares. It is

quite a complex mechanism on the Tokyo stock exchange, but as we

understand it, after having spoken to officials, there were so many

sellers for the shares of Mitsubishi Motors, and buyers as well, but the

price did not match up, Ben. Basically, the amount that the

sellers wanted for their shares and the amount that the buyers were

offering, there was no actual deal that was executed, so no shares

traded in Mitsubishi Motors on the Tokyo stock exchange, but they still

fell by 20%. That is as a result of a mechanism within the Tokyo stock

exchange that, every three minutes, when there are no trade is being

executed for this particular stock today, the shares are known to

which is why you have ended up which is why you have ended up

seeing 20% taken of Mitsubishi Motors shares. In total, that is

about $2.5 billion of value from the company's share price, so quite a

dramatic fall as a result of the announcement that we saw yesterday.

Also, we have been hearing about raids at some of its plants, some of

its officers, what is going on? Yes, well, the government has weighed in,

as you would expect, it is the country's sixth largest auto-maker,

so earlier today the transport ministry sent in a team of

investigators to Mitsubishi Motors' plant, research centre in Nagoya to

find out how the employees of the company went about falsifying this

tyre pressure data, which then resulted in its ability to make some

of its models, the mini car models, at the more fuel efficient than they

actually are. The investigation is expected to last a week or so, and

the government says it is a serious breach of trust between Mitsubishi

Motors and consumers, and it is taking it extremely seriously. Watch

this space, lots more comments to come from the government on this in

the next couple of days. Karishma, as always, thank you for explaining

that. Shares in Yum brands -

the firm behind KFC and Pizza Hut - have jumped nearly 4%,

after the company reported better than expected earnings

for the first quarter. Its profits rose 8% in the three

months to March, to $391m. Microsoft has said it is to stop

manufacturing the Xbox 360 games In a blog post, Xbox boss

Phil Spencer said gamers had completed more than 78 billion hours

of play on the devices. Last year the firm enabled Xbox 360

games to work on its successor, Mining firm Newmont

has reported lower earnings blamed on weaker gold

and copper prices. The US-based Newmont is the world's

second-biggest gold miner, but says profit came

in at $182 million, down from a year ago but still

well ahead of expectations. The results were helped by higher

production along with lower costs. Tokyo shares rose yesterday for the

third successive session, but the rise in oil prices was helping.

Mitsubishi fell 20% after admitting falsifying those fuel efficiency

tests. It is Brent crude that is back up, in the early part of the

day, trading down slightly, but nonetheless up on what we saw

earlier in the week. A quick look at how Europe is looking, because in

the UK some disappointment that jobless claims rose in March, but

wage growth came in lower than expected too, but still ahead of

inflation. That is the picture for the UK market, we will talk about

that in more detail in a moment. Michelle Fleury has the details from

Wall Street. The earnings release from General

Motors may be overshadowed by other news in the automobile world,

because this is the deadline for VW and US officials to reach a deal to

get diesel cars that used software to evade US emissions laws off the

road. Reuters is reporting that VW will offer to buy back almost

500,000 diesel cars, while the German newspaper de Buit says that

VW may be ready to pay each affected customer $5,000 each. -- Die Welt.

Two big names in technology turned in their report card, Alphabet, the

parent company of Google, reported its first numbers after the market

close. And investors will want to hear from Microsoft about how its

cloud computing business is doing and whether its third-quarter

results were impacted by a stronger dollar.

Jeremy Cooke is the chief economist at World First,

what is grabbing your attention this morning, oil going up? Yes, whisper

it, but we may be seeing a rise in prices, the meeting in Doha did not

produce much, but we have come back from the lows in short order, and a

lot of people are saying we may have put the bottom in oil prices as

well. The key question is whether the rancour that we saw between

Iran, Saudi Arabia and Russia spills over into supply, if tensions rise

and supply contracts. Let's talk about the data we had in the UK,

jobs and earnings, a surprise rise in an appointment, the first time in

a long time, but earnings versus inflation, still above inflation,

but not hugely. Not hugely impressive, and we talk about

corporate reports, we said that revenue is vanity, profit is

reality. If low unemployment for the UK is vanity, the reality is higher

wages, and we're not seeing that at the moment. It is a seasonal thing,

in February businesses do not pay large bonuses, banks for instance,

so that may have taken the number lower, but it is something the Bank

of England will be worried about if they are talking about high

inflation. The ECB meeting, a nonevent this time? A little bit,

after what Mario Draghi said last month, saying the policy was maybe

at its lowest, the last time he said that, someone stormed the

through glitter at him. Promises, promises! I will tune in, just in

case. We're going to be talking

about a company that's been moooving in on its milk

producing rivals. A2 make a type of milk which thay

say is better for us, and it's been We're going to be joined

by their CEO after the break. You're with Business

Live from BBC News. Heathrow Airport has just announced

a boost in its first-quarter results thanks, it says Komla Dumor

passengers and lower costs. Revenues were up by 3.2%, ?642 million. The

chief executive of Heathrow Airport joins us now, good morning, another

good year, another set of good figures, but still falling down the

international league tables in terms of capacity and passenger numbers.

It is frustrating, to say the least, is it not? We need to make a

decision as quickly as possible about the future of this country. We

are the fifth largest economy in the world, and we're not going to be for

much longer unless we invest in our biggest port, and Heathrow is our

biggest port, we handle over a quarter of UK exports. We are the

only airport that gets business to all the growing airport in the

world, but we are at capacity, and it is frustrating to DD French

moving head, Paris has more long haul destinations than we have, and

we need to make the right decision to secure the long-term future of

this country. And we talked in our release about the capacity issues we

have, it is not just about not enough roots, it is about trading

capacity. Some of our key routes, like Tokyo, Shanghai, Beijing, are

close to capacity, we cannot get more exports on those planes, and

unless we expand Heathrow, that is not going to change. Now is the time

for the Prime Minister to make the right decision to secure the future

of Britain by expanding Heathrow. If they decide not to, what is your

plan for the airport? We will keep on doing what we have been doing the

last few years. We are currently rated the eighth best airport in the

world. I want us to be the best airport in the world, giving

passengers the best airport service. We are going to keep on working on

that, serving Britain well. We will keep doing it at a lower cost as

well, giving better value to passengers. Our job is to serve

Britain. We can serve Britain better if we are a larger Heathrow, getting

more of the cities and the regions of the UK with direct links into

Heathrow, and onto 120 long haul destinations. That keeps Britain on

the map. Thank you. in court in the US later today -

it's thought they'll promise to buy back some of the 600,000

diesel cars which had the emissions-cheating

software installed. Some reports suggest

they could spend over $1 billion Details coming into us about how

that deal may work but no specific detail. How much individual

consumers will get or when it will be paid. We will keep your cross

that. Sure we pause for a little drink of milk?

And now let's get the inside track on milk.

The long held belief that people from Asia are intolerant to milk,

is being slowly eroded as sales of dairy products across the area

New Zealand has been cashing in on the change in tastes and now

ranks as the world's largest dairy producer -

One of the companies involved in the uplift is dairy company

They believe that mass produced milk has, over time,

lost what scientists call the A2 protein.

They say that the milk we get now has got A1 protein, but that it's

the A2 protein that they claim is better for us all.

Demands for the company's infant formula has been particularly strong

in China, where consumers have switched to products made

in Australia or New Zealand after locally produced milk led

the company's shares to rise by 189% since they began trading in Sydney

He's the UK and China Chief Executive for A2 Milk Company,

Good morning. We sort of explained what you would argue is your unique

selling point, the fact that A2 Milk is full of protein? Yes, it is the

only milk available that has the aid to protein. The difference that

makes is that it does not have the A1 protein. That is associated with

issues of digestion, making it difficult to digests. That can

affect as many as 90% of the population in China. A recent trial

announced yesterday has shown that the 90% lactose intolerant people of

China are able to drink A2 Milk. It is the A1 protein causing the issue.

Explain the process? It is the same cows eating the same staff. It is

different what is coming out of their orders? Are you going to a

herd of existing cows and DNA them. We farm the A2 Milk cows. It is

genetics. Forgive my ignorance, but will this taste Andy different? We

are going to try some now. People will not notice any difference. Talk

smack through the change people may see in terms of cost? If your

children have an issue with milk they could try this and they would

not know they are trying a different man. It is fresh cow's milk. In

terms of pricing, this is about ?1 39. -- 1.3 nine. About twice the

price of normal milk. But we argue that milk is on the priced and

undervalued. I am a family of five. We consume a lot of milk. One of my

children had trouble with milk. I looked into other milks. I have

never seen A2 Milk. I do not feel the strength of your presence in the

UK and yet you are taking China by storm. That is presumably pushing up

your profits and share price? We have only been in the UK a couple of

years. We are relatively new. People struggle to find us sometimes. We

are there. In Australia we have got a big share, growing significantly.

The strength of that has gone into China. Chinese consumers have

realised from talking to a friends that there is something out of there

for them. They are buying it and taking from Australia. We have set

up in China and are growing a strong business. Let's talk about the

industry for milk. Here in the UK and many parts of Europe, we see

supermarkets selling milk as a loss leader. Farmers are not getting what

they should. We are also seeing a decline because there is a

health-conscious move away from dairy towards different diets. You

are seeing that correlated upswing in Asia. Does that compensate for a

slowdown in Europe? The growth opportunities in Asia are enormous.

China will overtake Europe next year as the biggest milk exporter. In

Europe, we think a lot of the decline in Derry is due to

misunderstanding. A lot of rumour and non-fact about milk is spread.

-- dairy. People believing they are lactose intolerant means they do not

go for milk in a way they could do. Something like this could enable

them to drink milk again. Thank you for coming in, sharing the milk. I

am treating this like a fine wine! Have you smelted? Yes, it smells

good. There is some going in my coffee.

In a moment, some of the other stories out of there. First, a quick

reminder of how to be across it all. The businesslike pages where you can

stay ahead with the breaking business news. We will keep you

up-to-date with the latest details, with insight and analysis from the

team of editors across the world. And we want to hear from you. Get

involved on the BBC Business Live web page. You can find us on Twitter

and on Facebook. Business Live on TV and online

whenever you need to know. Jeremy has returned. Let's have a

look at some of the stories. Starting with the international New

York Times, which says choosing to skip the upgrade and care for the

graduate -- gadget you have got. It is a PalmPilot he has got in his

hand. Old technology. This is a story about people who, after a

couple of years when their phone plan has, Kraupp renewal, holding

onto what have got. -- coming up for renewal. Clearly this is not

widespread but the problem is that many people now have a phone they

are happy with. They will not upgrade between a five, six or

seven. We are getting past the stage where you can open up a phone --

draw in the kitchen and cross old phones. We have a picture of an old

Bakelite telephone. He says if only my mobile had the stability of this.

Matt says upgrading software can be tiring, especially if it happens

every couple of days. It is sort of a work in progress all the time. You

are constantly having to update and upgrade, rather than trust your

reliable phone. Exactly. You have to be worried about the data charges as

well. Briefly, the Daily Telegraph talking about Tata possibly going

for a crowdfunding to rescue Port Talbot? Crowdfunding may be a

difficult way. It is a management buyout and it is raising money from

employees. Of the ?10,000 each. That seems steep. Whether you would want

to split the ownership that wide within a steel plant among the

employees remains to be seen. But certainly it is a new idea which can

hopefully raise money for an ailing industry. Thank you for coming in.

Some milk for you later. Thank you. We will see you soon. By bye-bye.

Good morning. Some sunshine on offer today. But not for everybody. The

skies are going to turn cloudy in the next 24 hours. We have already

had some rain in south-western