17/08/2016 BBC Business Live


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This is business life. Driving with no hands, steering wheel, pedals, an


ambitious plan to have self driving cars on the road in five years. That


is scary. Oh yeah, the big boss of Ford tells


us the BBC the future of automobiles is driverless. Also on the


programme, Cathay Pacific, Hong Kong's national carrier bets against


the drop in oil and gets wrong, loses big time. Its profits plunge


82%. And we will take a look at the markets, its August, give us a


break. And staying with aviation -


Latin America's biggest carrier has had a bumpy ride in Brazil we ask


the Chief Executive if the Rio Olympics will give


the company a boost? And later on we'll look at how


savers and banks are hoarding cash because interest rates are so low -


are you tempted to put your money What are you doing with your cash


now that rates are at all time Comments already coming in, and we


appreciate them. US car maker Ford has promised it


will have a mass-produced self-driving car on the road by 2021


- one that won't even Google has been leading this


particular technological revolution - and has been road testing cars


in the United States for years. Tesla is of course


another key player - but its self-driving project has had


some road blocks. The project has come under scrutiny


after a driver was killed in a driver-assisted


vehicle earlier this year. But Ford is joining the race


and has put it's money where its mouth is -


investing $75 million in a sensor Tesla's Elon Musk doesn't believe


it's the future of driverless cars. Our North America technology


reporter Dave Lee spoke to Ford's president and asked him


if LiDAR is a gamble. I cannot speak to what is going on


in Elon Musk's head, but we believe cloud is very important. One of the


goals is that eventually there will not be drivers. What about those


millions of people that make their living from driving taxis, driving


trucks. Clearly, as you think about the societal benefits around fully


autonomous vehicles, benefits around safety, mobility for elderly or


disabled folks, benefits for the environment because there is less


congestion, clearly those are really huge benefits. At the same time a


lot of economies including the US are very resilient. As we see


situations like this, the economies situations like this, the economies


will be resilient and there will be new sources of opportunity for


people to work, whether in the automotive industry as drivers or


not. head of autos analysis


at BMI Research. What do you make of this? It is


certainly a statement of intent, putting a timeline on it. From their


side that they have control over, the technology is certainly


possible. Many car-makers already have this underdevelopment, they


have been working on it for a few years. I think it's other issues


that might derail this. Things like connectivity, having the right level


of connectivity in cities where you want these cars to work. Consumer


perception, do people actually want them? Will they want to give up


control of driving? Can I just ask, surely the regulation of this in


five years is going to be one of the largest hurdles, jumps. And the


insurance, right? You've got to have the regulation to have the insurer


because one of them crashes into a car, who is it for? This is the big


question. Absolutely, this is something we have highlighted as a


biggest hurdle. And that's why we think it could be ten to 15 years


before you see them in operation fully. All of the regulation and


insurance regulation we have is all around the fact you have a driving


charge of the car. You take that away, who's at fault? The car-maker,


the software provider? There are still many questions to be answered.


In the meantime Ford and many rivals are just ploughing plenty of money


into this technology. Just tell us about the rivals. We know about


Google, we know about Tesla, but many others are in the frame. Yes,


and a lot at the premium end. BMW, Mercedes. They are concentrating on


the premium eventual ride sharing. What about Apple? A lot of talk


about them, they are heavily predicted to be making a car. I


think it's highly likely they will be in there as well. I was wondering


about, we said in the introduction they were putting their money where


their mouth is, but $75 million in the grand scheme of things doesn't


sound like a lot. Hang on, we have been corrected. $175 million, that


sounds a bit better. Elon Musk's against it, isn't he, saying the


technology was expensive? I think the aim of Ford is to get involved


in the development and build up economies of scale so that it can be


made more cost effective, particularly because they're looking


and the mass-market end of this, that's obviously very important for


them, to be more affordable for a big fleet. That's their thinking


behind this. I know LiDAR is generally looked on to be better for


3-D mapping which is vital for, make. Extremely vital. You'd be in


the wrong place at the wrong time with the wrong person. Or no person.


Thanks for coming in, we appreciate it. Much more to squeeze in, go for


it. A former head of Goldman Sach's


mortgage trading unit has been barred from the industry


by US regulators. Edward Chin, former head


of residential mortgage-backed securities, was accused by the US


Securities and Exchange Commission of misleading customers, causing


them to pay more. In addition to the ban,


he has agreed to pay $400,000. China's state council has approved


a new link between its tech heavy Shenzhen and Hong Kong stock


exchanges in a move to open Under the initiative limits


on how much foreigners can invest in Chinese


stocks will be scrapped. But there will be a daily cap


of $2 billion dollars on the amount Online news site Gawker Media has


been sold to media firm Univision The firm outbid media rival


Ziff Davis to seal the deal, which still hinges on approval


from a bankruptcy judge. The sale comes after Gawker filed


for bankruptcy protection in June to avoid paying damages after it


lost a $140m invasion of privacy lawsuit bought by former


wrestler Hulk Hogan. Now, Hong Kong's national carrier -


Cathay Pacific- has taken an almighty hit to its profits.Net


profit for the first half of the year fell 82.% compared


to the same period last year, Karishma Vaswani is


in Singapore for us. At a time when oil prices are low, I


think this story has something to do with oil, it bet against oil prices


and lost that bed, basically? You are absolutely right. They bet that


oil prices, to protect itself from the volatility it is seeing in oil


prices, it bet that it would be higher than it currently is. It's a


bet that many airlines make on occasion. Cathe is said to be more


conservative than most, and that is what you are seeing reflected in the


earnings being released. It's a staggering figure. If you compared


to how regional airlines are doing, Cathay really isn't doing very well.


Now, the big of a problem of course for this airline at at one point was


all one of Asia's finest is that the main market it has been serving,


China, has been seeing a slowdown. That's not all, it's also because of


competition. Chinese carriers are now becoming far more competitive


and becoming very good passengers from the mainland to international


destinations. People don't necessarily need to go through Hong


Kong any more. And that's really starting to hurt Cathay's


bottom-line. I guess you'd call it as a hub, an important hub, if


passengers don't need to go through it, they are in trouble. Great stuff


as always, see you soon. Just a quick flash of the markets -


because it's very The Asian markets pulled back a bit


from their one year high. The price of a barrel


of oil dropped a bit. The pullback also


happening in Europe. But the best market comment has


to come from one of the men who vote on whether to raise


or lower US interest rates. Yesterday he hinted that the cost


of borrowing in the world's biggest Today we get the US FED minutes


from their last meeting and should give us a clue as to what's


going on in the heads And talking of the US -


let's find out what'll be making the biz headlines on that


side of the Atlantic. On Wednesday we'll get a closer look


into the thinking of the Federal reserve policymakers when the


minutes of their July meeting are published. Now, the US central bank


said at its last meeting that the economy stands on a better footing.


Economists will be scouring the notes, looking for true hints on how


likely an interest rate will be. In other business News a few companies


reporting earnings including network equipment maker Cisco. Now, Cisco


has been beefing up its wireless, security and data centre businesses


to really offset the impact of sluggish spending by telecom


carriers and enterprises on its main business of making network switches.


Also reporting, retail giant target and office supplies retailer


Staples. Pretty busy day shaping up on Wall Street. The business editor


from Telegraph media group is with us, good morning James. We are


seeing who is not on holiday, they are on business life. Talking about


the Fed, we get the minutes later, could be quite interesting, couple


of those on the policy-making team, as it were, making hints, saying get


ready for rates going up again in the states. Yes, basically said


growth is it's a rating, the boss of the New York Fed coming out


yesterday and saying called your horses, a rate cut will not happen.


A lot of money has been on a rate hike. But some of the money now


moving to thinking about the December rate. He is an important


chat, he's a permanent voter, one of the people who sit around this big


table and vote whether up or down. And we got more indication later


with the minutes coming out tonight at about 70 GMT. The business life


page is consumed with UK data. Unemployment data coming out today,


consumer sentiment data tomorrow. Some survey today saying we are at a


two-year low. Just talk us through what's happening and what we are


learning this week. Basically everybody is grasping, trying to


find out in the post-Brexit vote environment how the UK economy is


doing. Inflation data yesterday showed inflation increasing up at


1.9%. Quite a bit. Employment data out later is for June, we are


expecting that at 9:30am. We are expecting unemployment down a 4.9%.


But that is just the June, only takes in seven days after the Brexit


vote. So still a bit early to tell. Going to be very hard to compare


anyway. Exactly. Very seasonal. We'll see you again later. Still to


come, it could be hard times for Brazil's airline has the countries


economy installing, seats are left empty. We'll be talking to the boss


about how she plans to turn around the company 's fortunes.


Banks and accountancy firms that help their clients bend the rules


to unlawfully avoid tax could face huge fines under new proposals


Ministers have published plans which would give courts


the power to impose fines of up to 100 percent of the tax avoided -


Andrew Walker is in our Business Newsroom.


How big a step is this? Up till now it is the individual who would get


into trouble, but never the accountants. It is very striking, it


has been welcomed by a lot of tax campaigners, that the position now


is basically, if you take advantage of a tax avoidance scheme that is


subsequently found to be unlawful, you get landed with the financial


consequences. Hitherto there has been no real disincentive for


accountants and lawyers to offer these schemes, it will be required


to has to deal with the consequences. So it is potentially a


major change in approach and other way in which government deals with


the problem of tax avoidance, and we're talking about billions of


pounds a year lost with these type of schemes. The hope is that the


prospect of facing these penalties potentially covering a large number


of clients, may help to choke off the supply of these schemes in the


first place. Briefly, it has not been announced yet but when we


expected to come from the Treasury, with a new government led by Theresa


May? These are consultation proposals, but it is striking,


Theresa May has said that paying your tax as a company is part of the


price, the benefits you get from living in a free, nor for society.


Thank you. We will see you again soon. Balfour Beatty, managing to


narrow its losses, pre-tax losses coming in at ?21 million, a lot


better than the previous year, ?150 million in losses. Its order book is


looking strong as well. Nearly 12.5 million. What about the story with


the job cuts? Unemployment data we're getting out later but also


Cisco. Our top story, forward, the motor


car announces ambitious plans to have a driverless car on the road in


just five years. So no steering wheels, no pedal, no driver! Let's


have a look at the markets. One of the comments from the US Fed,


one of the voting members who decide whether rates go up or down in the


world's biggest economy said, there could be a rate rise, be prepared.


Our next guest has one of the toughest jobs


in Latin America right now - keeping South America's


LATAM is the fusion of two giant companies: Brazil's TAM airlines


and Chile's LAN and it started operating flights under a joint


It operates flights to 140 destinations in 29 countries -


But it has not been an easy start for the joint venture.


Brazil's recession has hit the airline sector hard,


with a 6% contraction in the number of passengers this year.


Chief Executive Claudia Sender took over the helm of the company


A chemical engineer with an MBA from Harvard and is one of very few


women leading a major company in Latin America.


The BBC's Daniel Gallas spoke to her at the Latam's Sao Paulo


headquarters and asked her if sponsoring Rio was a wise move.


I am absolutely convinced it was the right decision, the go-ahead to toe


into the Olympic Games in Brazil. First because Brazil is the largest


market for LATAM airlines group, and it's a way in which we reinforce our


commitment to Brazil and our presence here. It was also an


important moment for the launch of our new brand. Until the beginning


of the Olympic process we were still LAN and TAM and our first LATAM


flight was the one which brought the Olympic flame from Geneva to Brazil,


so it was a beautiful way of marking the introduction of our new brand.


Since then we have been recognised as the second most remembered brand


attached to the Olympic Games service has been very good in terms


of brand recognition. The travel arm of your company offered big


discounts to tourists in the run-up to the Games, has the number of


tourists been disappointing in these Olympics? Before the Games started


there was a lot of concern, whether the Brazilians would be able to pull


this out or not and since the opening ceremony, I think people


were very impressed by the capacity of Brazilians to do the


extraordinary. So as a country, we always surprised when the time comes


to deliver the extraordinary, the same thing happened during the World


Cup, we are now seeing history being repeated during the Olympic Games.


So we have seen more and more people getting excited about coming and we


have seen Brazilians showing their best and not their worst. So all the


concerns about the car, violins, the logistics and whether the Games


would work or not, I think they have diminished significantly. --


violence. I think this has increased the traffic. Latin America saw a


boom in the number of passengers flying in the last decade but now


it's going to a very severe recession, what happened to that


room? The consumption class really grew in Brazil and people who before


could only afford travelling by bus were all of a sudden able to afford


travelling by plane, this is how the market tripled in only ten years. It


made Brazil the third largest airline market in the world. What we


have seen in the past two years is as the recession hit our economy and


people became more cautious in how they spend their money, the leisure


clients are thinking twice before taking another vacation or flying.


But more than anything, the corporate clients, who makes the


bulk of our demand and sales, got a lot more cautious, we have seen


significant reductions in trouble. We do expect that to pick up after


Brazil retakes its growth and start growing its economy again. This


should happen in the next year or two, and with believe Brazil can


start to retake growth, maybe not at the seven speed as before. I wonder


if she has ever heard of the joke, how do you become a millionaire


running an airline? Let's go, quickly! James is back. The


Financial Times has a story which we asked you to comment on. Thanks look


for cheap ways to store cash piles as rates go negative, where are they


putting the cash? They are looking at putting it in storage. In belts.


Rather than, the whole purpose of lowering rates, the irony really is


to get them to lend money, distillate economy but instead a lot


of banks are looking at storing it under the ground in secret faults.


How much can you store under a double bed? $106 million,


apparently. A suitcase can hold $2.5 million! It's also harder because


from later in the year, your notes are going out of circulation -- 500


euros notes. Hayley says she's keeping her money in the highest


paying bank account from now but looking at shares, gold, biotech,


solar companies. My favourite tweet is this person, no name, I have got


a grand, in a shortbread tin, shortbread eaten! Another one says,


regular savings account for highest monthly payments. Another says if I


had any money I would look for options. Sorry to hear that. Let's


talk about this story, which is interesting. The shins and stuck


index licking up with Hong Kong exchange, and opening up more


opportunities -- linking up. The latest move from the Chinese


authorities to open up companies listed to global investors, clearly


very limited, 2 billion every day in terms of money coming in, it is the


next step for China awakening to the well. If you listen to the comments,


people are talking about biotech and solar, people are desperately trying


to find ways of making money, it's definitely risky because who knows


how these companies are regulated, you just need to look at the scare


stories coming out of China but people are looking for new ways of


high interest. What is interesting as well is the type of companies you


can invest in, until now it has only been banks and state-run


enterprises. China is taking baby steps. I wanted to talk about the


satellite, we only have 22nd! Quantum physics again! After the


programme, I will take you through quantum physics! Look forward to it.


You lie! That is it from us. See you tomorrow.


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