25/04/2014 Asia Business Report


25/04/2014

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in court in the morning. Now on BBC News all the latest

:00:00.3:59:59

business news live from Singapore. Ups and downs in the car industry.

:00:00.:00:15.

We go through the latest earning numbers from the US and Japan.

:00:16.:00:20.

What do businesses want from Indonesia's next president? One

:00:21.:00:21.

entrepreneur shares his wish list. Welcome to Asia Business Report. We

:00:22.:00:33.

start off with the automotive sector. Investors have to buckle up

:00:34.:00:39.

for an interesting ride. The US carmaker GM posting a profit of $125

:00:40.:00:42.

million for the first quarter. Its worst financial result in four

:00:43.:00:46.

years. Its image has been dented by much`publicised recalls. Here,

:00:47.:00:52.

things have gone better for Mitsubishi, which shrugged off

:00:53.:00:55.

sluggish sales in some Asian markets to post a significant increase in

:00:56.:01:06.

profits. GM ended last year positively, with

:01:07.:01:09.

a multimillion dollar profit and its fourth straight year in the black.

:01:10.:01:19.

It seemed like a true reversal of fortune for the automotive giant

:01:20.:01:22.

which, a few years earlier, filed for bankruptcy protection and needed

:01:23.:01:25.

a government bailout. This year, it has been far more challenging. GM

:01:26.:01:27.

recalled seven million vehicles over faulty ignition systems that have

:01:28.:01:32.

been linked to over 12 deaths. Now, it is looking to China to secure its

:01:33.:01:41.

fortunes. It will invest $12 billion in the coming years to take on its

:01:42.:01:45.

European rivals, who have more of a foothold in the market there. China

:01:46.:01:48.

was a bright point for Japanese carmaker Mitsubishi in its annual

:01:49.:01:51.

earnings as well. Sales in Asia, its biggest market, dropped by 4% over

:01:52.:01:54.

the past year. China and the Philippines bucked the trend.

:01:55.:02:12.

Overall, the carmaker did well. Its net income was 104.7 billion yen, an

:02:13.:02:15.

increase of 176% over the previous year. Mazda and Honda are hoping for

:02:16.:02:20.

equally positive results when they report later today. Over to Japan.

:02:21.:02:32.

Prices remain static for a second straight month. That suggests the

:02:33.:02:36.

government still has some way to go when it comes to meeting their

:02:37.:02:41.

target of 2% inflation. This morning's data showed the price of

:02:42.:02:50.

things has increased. CPI in Tokyo rose by 2.7% in April, meaning the

:02:51.:02:54.

national CPI gauge could soon follow suit.

:02:55.:03:00.

Tokyo has ordered for bankruptcy proceedings to begin against the

:03:01.:03:03.

bitcoin exchange that collapsed earlier this year. That is expected

:03:04.:03:06.

to lead to a liquidation of the currency exchange. The court

:03:07.:03:11.

appointed trustee will look at how much the company's remaining bitcoin

:03:12.:03:14.

holdings are worth and will sell`off of assets to raise cash. It is

:03:15.:03:17.

unclear at this stage if investors will get back any of their

:03:18.:03:26.

investments. Within a few months, Indonesia will

:03:27.:03:29.

have a new president and many businesses have been hoping that the

:03:30.:03:32.

election will bring to power the government that is in favour of

:03:33.:03:35.

economic reform. So, how much will the election change the business

:03:36.:03:38.

environment and will it be a change for the better? Recently I spoke to

:03:39.:03:51.

an Indonesian entrepreneur. He is the head of a company which

:03:52.:03:55.

holds the franchise for more than 100 711 stores in the country.

:03:56.:03:58.

We are in the mostly food and beverages sales. With 240 million,

:03:59.:04:07.

people will still need to eat and drink. We are optimistic. Indonesia

:04:08.:04:11.

will have a new president by the middle of this year. What are your

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expectations? What will you need from the new president? The most

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important thing is stability. As long as Indonesia is stable and

:04:32.:04:34.

secure, the business and the people will grow. Number two is the

:04:35.:04:38.

policies. Indonesia is growing so fast and the government policy has

:04:39.:04:41.

to catch up with the changing needs of customers, as well as people. And

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businesses. So, more stable, secure and better policies towards the

:04:46.:04:56.

businesses. What are some of the problems of Indonesia that still

:04:57.:04:59.

need to be fixed? Number one is infrastructure. In Jakarta, traffic

:05:00.:05:03.

jams are everywhere. The roads aren't as equipped to accommodate

:05:04.:05:06.

the growth of the automotive is here. So, the infrastructure is

:05:07.:05:15.

clearly the number one priority for the government. In Jakarta, they are

:05:16.:05:31.

building a monorail, busway. Clearly the number one thing for everyone in

:05:32.:05:34.

the business and government sector is to build infrastructure. You have

:05:35.:05:37.

hundreds of stores but only in Jakarta. When do you plan to expand

:05:38.:05:50.

to the other islands? We continue to study the other islands but 70% of

:05:51.:05:57.

the population live in Java. 70%. So, our eyes are currently focusing

:05:58.:06:00.

on Jakarta. In the short distance, it will be in Java. In other

:06:01.:06:16.

business is making headlines, Barclays bank will pay $280 million

:06:17.:06:19.

to US companies to settle claims that it sold them faulty

:06:20.:06:21.

mortgage`backed securities during the housing bubble. Other banks that

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have reached settlements with US regulators include Citigroup and

:06:25.:06:26.

Deutsche bank. Mortgage`backed securities referred to investment

:06:27.:06:29.

products at the centre of the recent global financial crisis. For major

:06:30.:06:36.

technology companies in America, including Apple and Google, have

:06:37.:06:39.

agreed by some to settle a lawsuit that accuses them of conspiring to

:06:40.:06:41.

hold down salaries in Silicon Valley. According to Reuters, the

:06:42.:06:44.

settlement took place just weeks before the trial was scheduled to

:06:45.:06:55.

begin. Tech workers filed a class action suit against misty Apple,

:06:56.:06:57.

Google, Intel and Adobe, alleging they tried to solicit one another's

:06:58.:07:00.

employees in order to avoid a salary war. The jury could amount up to $3

:07:01.:07:04.

billion in damages. The loss could have been tripled to $9 billion, US.

:07:05.:07:12.

For more on that story and other news around the globe, please visit

:07:13.:07:18.

our website. Once the chief executive of Apple and the man

:07:19.:07:24.

thought to be behind the resignation of Steve Jobs in 1985. He now runs

:07:25.:07:30.

the company investing in other IT firms. He was in Singapore recently

:07:31.:07:35.

and spoke with our correspondent about opportunities in Asia and how

:07:36.:07:38.

he has moved on since his time there. This is the right time to be

:07:39.:07:44.

in Asia. The past five decades, the American middle class model has been

:07:45.:07:47.

the aspiration and has been exported around the world that it is no

:07:48.:07:51.

longer affordable for us in the US. In Asia, we have this rapidly

:07:52.:07:54.

growing emerging middle class. With a more frugal model of what that

:07:55.:07:57.

aspiration will be. I believe not only can we learn from that and be

:07:58.:08:00.

able to bring products and services to the Asian market but I think we

:08:01.:08:04.

can bring a lot of new ways of thinking back to the West. You are

:08:05.:08:16.

known as the guy who fired Steve Jobs. It has since emerged that he

:08:17.:08:19.

was pushed out of the company. What would you do differently in

:08:20.:08:22.

hindsight? First of all, Steve Jobs was brilliant. Unquestionably, maybe

:08:23.:08:27.

one of the best entrepreneurs of our generation. But Steve Jobs in his

:08:28.:08:36.

20s was not the same Steve Jobs as we saw in his later years. I think

:08:37.:08:45.

that I didn't understand well enough what it meant to be the founder of a

:08:46.:08:50.

company. As a professional manager who was brought in, I wish I had

:08:51.:08:54.

better coaching, probably from the board. In hindsight, there's no

:08:55.:08:57.

reason why we had to break up. I think the board could have taken a

:08:58.:09:01.

more proactive role. I never wanted to take Apple away from him. His job

:09:02.:09:10.

was to launch the Macintosh. It just so happened he was a few years too

:09:11.:09:13.

early, the technology wasn't ready to do all the things that it was

:09:14.:09:17.

later able to do. Those are problems that could have been solved in other

:09:18.:09:20.

ways. What kind of advice would you give Apple now? They have been

:09:21.:09:26.

embroiled in several legal cases against rivals like Samsung. How

:09:27.:09:29.

would you change the many? ``the company? The management is doing a

:09:30.:09:38.

brilliant job now. It is an extremely well`run company. But I

:09:39.:09:41.

think it probably lacks the creative leap that it had when Steve was

:09:42.:09:44.

alive running the company. Those things only come along once every

:09:45.:09:48.

five or six years. So we will have to wait and see as to whether there

:09:49.:09:52.

is an opportunity for Apple to do another creative leap under the

:09:53.:09:54.

current leadership or whether it will be one of those really

:09:55.:09:57.

well`managed companies, like BMW, that turns out very high`quality

:09:58.:09:59.

products but doesn't necessarily do creative leaps. A former Apple chief

:10:00.:10:22.

executive, John Scully. A volatile session on Wall Street overnight.

:10:23.:10:25.

Investors await the results of more earning numbers. The Nikkei is up by

:10:26.:10:32.

90. Thank you for investing your time with us.

:10:33.:10:41.

The top stories this hour: The American Secretary of State John

:10:42.:10:45.

Kerry has accused Russia of being responsible for the increase of

:10:46.:10:47.

violence in eastern

:10:48.:10:48.

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