Browse content similar to 11/08/2014. Check below for episodes and series from the same categories and more!
Line | From | To | |
---|---|---|---|
heavy rainfall and strong winds continue over the coming days. Let's | :00:00. | :00:09. | |
go to Singapore for all the latest business news. Malaysia Airlines is | :00:10. | :00:15. | |
set to receive a radical overhaul. Can its financial fortunes be fixed? | :00:16. | :00:20. | |
India's new government is changing its outdated labour laws to help | :00:21. | :00:22. | |
boost economic growth. Hello and welcome to Asia Business | :00:23. | :00:32. | |
Report. I am Sharanjit Leyl in Singapore. | :00:33. | :00:39. | |
Malaysia Airlines joins the unenviable list of national carriers | :00:40. | :00:45. | |
forced into painful restructuring. The government investment fund looks | :00:46. | :00:48. | |
to take total control. It will soon be delisted from the stock exchange. | :00:49. | :00:50. | |
Does it change how travellers feel about the company? We took to the | :00:51. | :00:57. | |
streets of Singapore to find out. If the government is taking over | :00:58. | :01:00. | |
Malaysia Airlines, I will be more confident. From a consumer point of | :01:01. | :01:03. | |
view, it makes no difference to me. As long as the service level is | :01:04. | :01:08. | |
maintained. It doesn't make a difference for the safety of flying | :01:09. | :01:11. | |
with Malaysia Airlines. It doesn't matter if it is privately owned or | :01:12. | :01:15. | |
owned by the government. I told a friend of mine not to fly. | :01:16. | :01:25. | |
Avoid the airline. I wouldn't fly. Even if the government decides to | :01:26. | :01:27. | |
change the airline, bring change within the airline. I would wait | :01:28. | :01:30. | |
three or four years. I don't know. It depends if they | :01:31. | :01:36. | |
have the best price or not. What has been the fate of others who have | :01:37. | :01:39. | |
been down this route? History is peppered with those who did not pull | :01:40. | :01:52. | |
through. Pan Am in the 1990s, Sabena, Swiss Air after 9/11 and | :01:53. | :01:57. | |
Indonesia 's Airlines. Malaysia might also look at the experience of | :01:58. | :02:00. | |
Japan Airlines, which filed for bankruptcy and delisted in 2010. | :02:01. | :02:03. | |
$3.3 billion of public money kept it operating while it restructured. | :02:04. | :02:19. | |
And, 2.5 years later, it relisted. Earlier, I spoke with an aviation | :02:20. | :02:21. | |
lawyer, Paul nanograms. It requires the approval of minority | :02:22. | :02:24. | |
shareholders up to 50%. Restructuring is absolutely | :02:25. | :02:28. | |
necessary. To distinguish them from their list of other legacy carriers, | :02:29. | :02:31. | |
they have gone to delist because of insolvency, Malaysia Airlines isn't | :02:32. | :02:35. | |
insolvent at the moment. They still have cash. But they are burning it | :02:36. | :02:40. | |
at around $5 million per day, which isn't sustainable going into 2015. | :02:41. | :02:48. | |
Are they anticipating or correcting any of those issues coming up? You | :02:49. | :02:56. | |
described it earlier as a pre` bankruptcy move. Malaysia Airlines | :02:57. | :03:00. | |
isn't unfamiliar with restructuring. They have tried it three times in 15 | :03:01. | :03:14. | |
years. They had one reasonably successful restructure with the move | :03:15. | :03:17. | |
of assets from the airline, selling it to a leasing company set up by | :03:18. | :03:20. | |
the government. There is the possibility of success, obviously. | :03:21. | :03:26. | |
But their fortunes have been unprecedented in the aviation | :03:27. | :03:28. | |
annuls, having lost a number of lives, equivalent to the last five | :03:29. | :03:33. | |
years. What does it need to do in terms of restructuring? Some | :03:34. | :03:43. | |
elements have been highlighted earlier this year. But what needs to | :03:44. | :03:48. | |
be done specifically? It needs to be more competitive. There is a big gap | :03:49. | :03:51. | |
between them and their competitors. Comparing with other legacy carriers | :03:52. | :04:00. | |
like Singapore Airlines. On the short haul routes comparing with | :04:01. | :04:02. | |
domestic carriers including Air Asia. How do you do that? | :04:03. | :04:05. | |
Controlling cost, managing labour, finding cheaper financing. There are | :04:06. | :04:15. | |
many things they can do and will probably have to do. A US energy | :04:16. | :04:24. | |
giant is combining all it is publicly traded units into a company | :04:25. | :04:31. | |
that is worth $70 billion. It follows concerns that the company | :04:32. | :04:33. | |
was unable to grow under its current structure. Australia's wine estates | :04:34. | :04:45. | |
have received a second takeover offer worth more than $3 billion | :04:46. | :04:48. | |
from an unnamed private equity firm. The offer comes after KKR, another | :04:49. | :04:51. | |
equity company, raised the bid for the winemaker that owns brands like | :04:52. | :05:13. | |
Penfold 's and Lindemanss. I spoke to a market strategist at IAG | :05:14. | :05:15. | |
markets. Since wine estates was established, it was part of Foster's | :05:16. | :05:19. | |
Group. It has been under a huge amount of scrutiny from private | :05:20. | :05:22. | |
equity for a while because of the diversification of assets. It has a | :05:23. | :05:25. | |
huge amount of assets in Australia and New Zealand and there are three | :05:26. | :05:28. | |
major assets in the US, all of them are very lucrative from the point of | :05:29. | :05:32. | |
view that US equity firms on the list look at using it as a way to | :05:33. | :05:36. | |
diversify in the US. If you can provide wine and beer, spirits | :05:37. | :05:38. | |
particular into someone like TPG, the second takeover player, to move | :05:39. | :05:41. | |
into their casinos and other private equity firms. The second part of the | :05:42. | :05:45. | |
question is also interesting. The wine industry in Australia is very | :05:46. | :05:48. | |
strong despite global downward pressure. Domestically, it generates | :05:49. | :05:52. | |
most earnings in Australia and New Zealand, which is why you see good | :05:53. | :05:55. | |
upside and reasonable premiums might have been a number of challenges, | :05:56. | :05:57. | |
including China's austerity drive and competitors with other | :05:58. | :06:00. | |
winemakers. There are challenges ahead in this industry, surely? | :06:01. | :06:12. | |
There is an austerity drive. There is and that is why China is key. The | :06:13. | :06:15. | |
Australian wine industry is pushing into the Asia region. They get most | :06:16. | :06:19. | |
of their income from Asia out of Japan, South Korea and south`east | :06:20. | :06:22. | |
Asia. That is where they see their dry. `` drive. The other thing is | :06:23. | :06:29. | |
offering the Australian wine industry as a premium. Their | :06:30. | :06:38. | |
products are seen like that. Most providers are independent and | :06:39. | :06:40. | |
privately owned, rather than Treasury Wine Estates which is | :06:41. | :06:43. | |
obviously publicly listed. The brands are higher in terms of | :06:44. | :06:47. | |
value. That is why they tend to do OK, because the margins are slightly | :06:48. | :06:50. | |
higher. It is a downward treasure market and spending in liquor is | :06:51. | :06:53. | |
changing. That is why we see downward pressure. Now, last week | :06:54. | :07:00. | |
brought news which has people wondering, could China take | :07:01. | :07:02. | |
advantage of changes announced by its neighbour, Moscow? They have | :07:03. | :07:08. | |
slapped import bans on items from the EU and the US and others in the | :07:09. | :07:12. | |
sanctions battle over the crisis in Ukraine. Could China plug the | :07:13. | :07:14. | |
trillion`dollar gap in trade? I posed the question to an economist, | :07:15. | :07:17. | |
Tony Nash. China is Russia's largest import | :07:18. | :07:21. | |
partner. Given that relationship, China will likely benefit. If you | :07:22. | :07:31. | |
look at the goods that Russia sanctioned in the EU and US, it is | :07:32. | :07:35. | |
only about $2 billion worth of goods on the food side. Even if China | :07:36. | :07:40. | |
absorbed all of that, it isn't a massive amount that will impact | :07:41. | :07:46. | |
China's exports. It is the first major reform of the | :07:47. | :07:50. | |
Narendra Modi government in India, revamping the labour laws. Something | :07:51. | :07:52. | |
foreign companies and domestic companies have demanded. It is a | :07:53. | :07:55. | |
plan to revive the economy, boost manufacturing and create jobs. Not | :07:56. | :07:58. | |
everyone thinks it is a great idea. Our correspondent reports from the | :07:59. | :08:08. | |
state of Haryana. Manufacturing here only makes up | :08:09. | :08:11. | |
about 15% of the economy. India wants this to reach 25% within a | :08:12. | :08:19. | |
decade. And forcing companies to grow their skilled workforce by | :08:20. | :08:21. | |
training apprentices is just one change in labour laws aimed at | :08:22. | :08:27. | |
kickstarting the sector. India wants to encourage factories like this one | :08:28. | :08:30. | |
to increase their contribution of manufacturing to the economy. While | :08:31. | :08:33. | |
businesses like banks and IT companies can lay off employees | :08:34. | :08:36. | |
pretty easily, manufacturers face different laws. Labour laws make it | :08:37. | :08:42. | |
tough for them to hire or fire employees or even close down a | :08:43. | :08:51. | |
factory when they want to. This car parts maker says at the moment it | :08:52. | :08:54. | |
cannot adjust the size of its workforce to match the ebbs and | :08:55. | :09:01. | |
flows in the business. And so it is welcoming another change in the law | :09:02. | :09:04. | |
to make it easier to hire fewer permanent staff and more | :09:05. | :09:06. | |
subcontractors, making it more competitive. | :09:07. | :09:11. | |
As a businessman, I am looking for flexibility. If businesses are | :09:12. | :09:20. | |
fluctuating at 5`10%, it is hard. `` it is easy to handle. But there are | :09:21. | :09:29. | |
some segments where you can have a fluctuation of up to 15%. | :09:30. | :09:36. | |
Might the prospect of having more casual workers who don't have the | :09:37. | :09:39. | |
same legal protection, wages or job conditions cause problems? This is | :09:40. | :09:42. | |
the aftermath of violent clashes between workers and management at | :09:43. | :09:44. | |
this Suzuki factory in Haryana. Months of strikes cost it more than | :09:45. | :09:48. | |
$500 million. Workers' rights were at the heart of the dispute. The | :09:49. | :09:54. | |
types of stand`offs some expect to increase as the number of temporary | :09:55. | :10:01. | |
workers rises. Some question if factory floors really are the | :10:02. | :10:03. | |
long`term answer to more employment in India anyway. In a world ever | :10:04. | :10:16. | |
more driven by technology. But in an economic climate changing fast, most | :10:17. | :10:19. | |
expect these changes to be the beginning of an overhaul of India's | :10:20. | :10:34. | |
industrial landscape. That is the end of this edition of Asia Business | :10:35. | :10:36. |