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latest headlines from BBC World News. Now for the latest financial | :00:00. | :00:00. | |
news with World Business Report. Tough times for Qantas. The | :00:00. | :00:23. | |
Australian airline slashes jobs and cuts its fleet amid mounting losses. | :00:24. | :00:27. | |
Plus ` from bricks to blockbusters ` why Lego is now the toy world's | :00:28. | :00:28. | |
hottest property. Welcome to World Business Report. | :00:29. | :00:38. | |
I'm Sally Bundock. Also in the programme ` motoring expert Quentin | :00:39. | :00:41. | |
Willson will join us to talk about Tesla's electric dreams. | :00:42. | :00:47. | |
We start with the struggles of Australian airline Qantas. In the | :00:48. | :00:53. | |
last few hours it has announced major job cuts and mounting losses | :00:54. | :00:56. | |
as it battles fierce competition from rivals. Qantas says it will cut | :00:57. | :01:09. | |
5,000 jobs ` that's more than one in seven of its full time staff ` over | :01:10. | :01:12. | |
the next three years ` and it revealed its lost almost 226 million | :01:13. | :01:16. | |
dollars in last the six months of 2013. In a bid to stem the heavy | :01:17. | :01:19. | |
losses Qantas announced it will cut its fleet by 50 planes. Today it | :01:20. | :01:28. | |
says delivery of three new Boeing Dreamliners and eight Airbus A380 | :01:29. | :01:31. | |
superjumbos will go on hold. Here's the BBC's Sydney correspondent Phil | :01:32. | :01:39. | |
Mercer. The news flying kangaroo is facing the most tempestuous times in | :01:40. | :01:43. | |
its recent history. Condemned by trade unions, battling record fuel | :01:44. | :01:49. | |
costs, and unrelenting competition from subsidised rivals, Qantas has | :01:50. | :01:52. | |
embarked on a ruthless make or break plan to revive its fortunes. This | :01:53. | :01:59. | |
performance is unacceptable. The current position is unsustainable. | :02:00. | :02:04. | |
It reflects a substantial change in our circumstances. Taking the $2 | :02:05. | :02:13. | |
billion of costs by the end of the financial year 2017 requires | :02:14. | :02:16. | |
difficult decisions across the whole business. Today, I regret to | :02:17. | :02:23. | |
announce that we will be reducing our employee numbers by 5000 | :02:24. | :02:27. | |
full`time staff of the next three years. Australia's national carrier | :02:28. | :02:33. | |
has been lobbying the government in Canberra. They want to ease limits | :02:34. | :02:41. | |
on foreign investment or provide state intervention. Ministers are | :02:42. | :02:44. | |
drafting new laws to allow foreigners to buy a majority stake | :02:45. | :02:48. | |
in the airline and to strip away restrictions. Qantas are facing a | :02:49. | :02:54. | |
tough and competitive market. We accept that Qantas do have to | :02:55. | :03:00. | |
compete with a ball and chain provided by the Qantas Sale Act. But | :03:01. | :03:05. | |
they do have to get their house in order. Management claims that it is | :03:06. | :03:13. | |
advantaged because its main domestic rival, Virgin, is largely owned by | :03:14. | :03:21. | |
three government backed airlines. Qantas has repeatedly stressed that | :03:22. | :03:25. | |
it is not want handouts but rather a debt guarantee from the government | :03:26. | :03:28. | |
that would allow it to borrow at more favourable interest rates. | :03:29. | :03:34. | |
Dealers under pressure to tame its finances as ministers consider next | :03:35. | :03:35. | |
move. Also on today's business agenda ` | :03:36. | :03:45. | |
tiny bricks and big profits. Danish toymaker Lego reports its full year | :03:46. | :03:48. | |
results this morning. It's expected to confirm it's been another record | :03:49. | :03:51. | |
year for sales. Here's a figure to get your head around. Last year Lego | :03:52. | :04:01. | |
manufactured 45.7 billion bricks. The company itself is hard to value | :04:02. | :04:04. | |
as it's family`owned, but it's now estimated at somewhere over 17 | :04:05. | :04:07. | |
billion dollars ` more than Mattel, the maker of Barbie. That makes this | :04:08. | :04:13. | |
man ` Kjeld Kirk Kristiansen ` the grandson of the company's founder ` | :04:14. | :04:22. | |
a billionaire almost six times over. These days of course it's not just | :04:23. | :04:25. | |
about the bricks. The Lego Movie has topped box offices in the US for the | :04:26. | :04:29. | |
last three weeks. It's the latest move from a company that has | :04:30. | :04:31. | |
constantly re`invented its brand ` as Jeremy Howell reports. | :04:32. | :04:43. | |
In the Lego movie, an unassuming young man has to organise a group of | :04:44. | :04:48. | |
highly creative and argumentative friends to save the world from the | :04:49. | :04:55. | |
machinations of business. Surprisingly anticapitalist coming | :04:56. | :04:56. | |
from a company worth $20 billion. The movie idea was not the part of a | :04:57. | :05:09. | |
corporate business plan. Instead, the company was inspired by small | :05:10. | :05:13. | |
filmmakers who have been using Lego figures to make jerky animated | :05:14. | :05:19. | |
movies. They are streaming on platforms like you Tube. Instead of | :05:20. | :05:22. | |
trying to stop them, it embraced the idea itself. They have been creative | :05:23. | :05:28. | |
about how they have extended their brand that their have always come | :05:29. | :05:32. | |
back to their core attributes. The notion of creativity, play, | :05:33. | :05:38. | |
constructing something together in a shared endeavour. They have stayed | :05:39. | :05:42. | |
true to that and use that to extend into other product formats. The | :05:43. | :05:49. | |
movie is the latest step on its route to recovery. A decade ago the | :05:50. | :05:54. | |
company had debts of $800 million and feared for its future. It has | :05:55. | :05:57. | |
climbed back into profits chiefly through bringing out new game lines | :05:58. | :06:07. | |
linked to popular films and comics. Here we have an example of Lego | :06:08. | :06:10. | |
embracing the Star Wars licence that is very popular. Many, many adult | :06:11. | :06:17. | |
collectors have moved into this market. They have widened the appeal | :06:18. | :06:24. | |
of Lego beyond just children. Lego wants to boost its popularity with | :06:25. | :06:28. | |
girls. It has tried to do so in the movie with the feisty heroine. On | :06:29. | :06:33. | |
the shelves it has brought out its Friends range. And they are the | :06:34. | :06:43. | |
inevitable movie tie ins. But is Lego over extending its brand? | :06:44. | :06:55. | |
Shares in Tesla Motors have been surging after the electric car maker | :06:56. | :07:00. | |
announced plans to build a vast new battery factory in the US. The so | :07:01. | :07:03. | |
called "gigafactory" would be able to make more lithium ion batteries | :07:04. | :07:07. | |
in a year than were made in the whole world in 2013. Battery costs | :07:08. | :07:10. | |
are seen as a major obstacle to widespread electric car adoption in | :07:11. | :07:12. | |
America at the moment. Sales of Tesla's luxury Model S are set to | :07:13. | :07:16. | |
jump more than 50% this year ` but at $89,000 it's only for the well | :07:17. | :07:20. | |
off. Tesla hopes to have a cheaper mass market car on sale within three | :07:21. | :07:27. | |
years. Let's talk to motoring journalist Quentin Willson. | :07:28. | :07:39. | |
Explain why this move by Tesla is a significant shift for electric cars. | :07:40. | :07:44. | |
For the whole industries is massive because it will potentially lower | :07:45. | :07:49. | |
the price of batteries by as much as 30 or 40%. That is the major barrier | :07:50. | :07:54. | |
to entry because of the cost. Electric cars are more expensive | :07:55. | :07:58. | |
than petrol cars. If Tesla can do this, and build these components | :07:59. | :08:04. | |
quicker and cheaper, it will make a huge impact. In the US you can drive | :08:05. | :08:12. | |
and stopped to charge and you can charge for free, can't you? There | :08:13. | :08:19. | |
are a lot of myths about the electric car. Will I run out of | :08:20. | :08:24. | |
electricity? Will get stuck unable to recharge? They have created the | :08:25. | :08:28. | |
supercharging stations all over America. They have 71. Somebody has | :08:29. | :08:33. | |
just driven from one end of the US to the other totally free, driving | :08:34. | :08:38. | |
into these charging stations which take only 30 minutes to fully charge | :08:39. | :08:43. | |
the batteries. That is a incredible development. We have a big | :08:44. | :08:47. | |
resistance in the UK to electric cars because we do not like the | :08:48. | :08:51. | |
people who drive them. We think that they are a liberal left`wing piece | :08:52. | :08:57. | |
of tokenism. But they do work. I have a driving on for three years | :08:58. | :09:01. | |
and it costs me ?2 to do 100 miles of electricity. I have never run | :09:02. | :09:08. | |
out. And all you need is a outlet plug. BMW are joining the market as | :09:09. | :09:16. | |
well. Tesla has done its best quarter ever. The Tesla model S has | :09:17. | :09:23. | |
been voted the best emerging model. The issue of price will be key won't | :09:24. | :09:28. | |
it? If Tesla can fulfil that ambition to have a cheaper vehicle | :09:29. | :09:32. | |
within three years, that will have a big impact. It will send a message | :09:33. | :09:37. | |
out that you can do it and bring competition. China will be very | :09:38. | :09:43. | |
interested in Tesla. Elon musk has said that we will not be able to | :09:44. | :09:51. | |
cope with the demand from China. `` Musk. Tesla will be a game changer | :09:52. | :10:00. | |
which might spill down into domestic electricity production and consumer | :10:01. | :10:14. | |
goods. Keeping you up to date. Royal Bank of Scotland is expected to | :10:15. | :10:17. | |
announce heavy losses for 2013 ` possibly as much as ?8 billion. RBS | :10:18. | :10:20. | |
is reportedly planning to scale back investment banking and international | :10:21. | :10:23. | |
operations and cut thousands of jobs to focus on UK lending. It's under | :10:24. | :10:26. | |
pressure to turn around its fortunes from the UK government which holds a | :10:27. | :10:29. | |
stake of over 80 per cent following its massive state bailout at the | :10:30. | :10:33. | |
height of the financial crisis. Advertising giant WPP reports | :10:34. | :10:35. | |
preliminary full year results shortly. Analysts are expecting a | :10:36. | :10:41. | |
return to strong profits. They are watching for any move by WPP to buy | :10:42. | :10:45. | |
a smaller rival after the merger deal between Publicis and Omnicom | :10:46. | :10:48. | |
which is set to knock it off the number one spot as world's biggest | :10:49. | :10:50. | |
advertising company. A quick look at the financial | :10:51. | :11:04. | |
markets. Qantas shares have been the big loser today in Australia. Qantas | :11:05. | :11:10. | |
shares have been down pretty much over 7% since the announcement of | :11:11. | :11:12. | |
its losses. Oh no, it has gone. The Dow was up | :11:13. | :11:28. | |
by 0.12% at the end of the trading session. I will be back shortly. | :11:29. | :12:01. | |
Stay with us. I'm Naga Munchetty.New measures to tackle | :12:02. | :12:02. |