25/01/2017 BBC Business Live


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This is Business Live from BBC News with Rachel Horne and Sally Bundock.


As President Trump tells car makers to build more vehicles in the USA,


Mexico tries to keep the border open for business.


Live from London, that's our top story on Wednesday, 25th January.


Mexico's foreign and economy ministers head to Washington,


but will it be the realities of modern manufacturing that make


Also in the programme, the lowdown on Lego.


It's one of the world's most successful toys,


but with China rife with copycats, can the boss tell the difference?


The European markets are open and they are up. Investors are looking


optimistic. We'll be getting the inside track


on private jets from the man fled Madagascar's civil war as a child,


but soared on to sell planes And, as always, we'd love


to hear from you about any Now Mexico seems to be the most


important foreign country when it comes to Donald Trump's in-tray,


now that he is US President. And in a few hours' time,


Mexico's economy and foreign ministers are set to meet some


of his top trade officials in Washington as they try to keep


border open for trade. And the Mexicans appear to have


conceeded that to do that. There will have to be changes


to the Nafta trade deal NOw President Trump is pushing


to bring more manufacturing He's already met with the heads


of Ford, General Motors and Fiat-Chrysler, telling them


they must make more Now the US is a key


market for Mexico. Taking a look at this graph,


you can see its exports to the US have surged since Nafta came


into force in 1994. Mexico now sells more


than $270 billion worth of goods Now it's thought talks


between Mexico and the US will focus on so-called Rules of Origin,


which limits the proportion of a product which comes


from outside North America. Now if limits were


tightened, it could boost But can this be achieved


in production lines with incredibly complicated supply chains


like the car industry? Dr Jagjit Singh Srai


is head of the Centre for International Manufacturing


at the University of Cambridge. Good to see you this morning. Good


morning. Rachel outlining some of the key issues and there is a lot to


discuss with regards to Mexico and the United States. The car industry


seems to be the centre of it all, doesn't it? Most trade between both


sides are within that industry? Absolutely, manufacturing and the


automotive sector are closely linked and Mexico and the US are closely


interlinked. You will probably know that automotive supply chains is not


just where you assemble the car. That criss-crosses across borders.


Bits of car, components, cross over the border several times before the


final car is finished. It is a really complicated process when you


look at the supply chain. So how simple is it for President Trump


just to say, "Right, tariffs are slapped on here. We want nor jobs in


the US." It is a very complicated picture. Firstly, we have automotive


component manufacturers in the US supplying to Mexican car assembly


plants and indeed, some reports say perhaps 30%, 40% of the cars coming


into the US, from Mexico, have that US component. So they can be very


much impacted if Mexican manufacturing facilities have to


scale back due to the tariffs. If he is successful, President Trump, in


his aim, ie perhaps putting tariffs on, he has not said anything about


that since he became president, I might add, but there are reports


today in the New York Times that there will be an executive order on


the wall going on, the Mexican currency is falling today on that


speculation and he has talked to the car-makers yesterday. If he is


successful, what will the impact be for both Mexico and the United


States and consumers as well? Well, if I pick up Mexico. The


manufacturing facilities that have targeted the US market predominantly


will have a significant trauma. They will have to scale back production.


Some of it may not be economical going forward. So I think that's a


pretty serious situation for those plants. There will be other Mexican


plants however who have a global market agenda and Mexico has free


trade agreements with dozens of countries and they perhaps will be


less impacted. Going back to the US, those component manufacturers


supplying those Mexican factories may actually have a significant


negative impact and if I wrap up with consumers, all these changes


will increase the cost of doing business. The automotive sector


doesn't have margins that can accommodate those increased costs so


we can look forward to prices going up. All right, thank you for your


time this morning. Of course, when we get any news out of the meetings


going on today between Mexico ministers and Donald Trump's team,


we will fill you in. Cisco Systems says it has agreed


to buy business software company The deal is another push by Cisco


which is one of the world's biggest maker of computer networking


hardware to expand its Legacy technology players


like Cisco have been trying to shift their strategy to stay


ahead of technology developments that could threaten


their core businesses. Shares in the Japanese airbag maker


Takata surged 18% on Wednesday after the troubled firm denied it


would enter into a lengthy The company shares reached


the maximum daily increase after a week in which they lost more


than half their value. The company has been plagued


by a massive global recall of its airbags which have seen it


pay a $1 billion fine Rio Tinto is selling most


of its coal assets in Australia It's a deal worth up


to $2.45 billion, and it is part of the mining giant's divestments


designed to boost its bottom line. The agreement is subject


to regulatory approval. When you talk Japan, you talk


economy and you think gloom, but today we have got good news. They


posted their first annual trade surplus since the nuclear disaster.


The first time which is great news for the Japanese economy. It is


because of cheaper oil prices which brought down the import costs, but


this news does come at a sensitive time because US President Donald


Trump, he has been criticising Japan about Japan's trade advantage


against his country. Especially the car industry which makes up about


40% of Japan's exports. Mr Trump has been accusing Tokyo of putting up


non tariff barriers to American companies which Japanese officials


have been denying and saying, "Look at jobs and investments that


Japanese companies have created in the United States." But it is an


uncomfortable reminder of a trade war the two countries had decades


ago. Thank you very much for your time.


Japan's Nikkei up. Their first trade surplus in six years. The Dow Jones


not doing too badly. We will be quizzing Tom Stephenson and why


they're doing well in a moment. Europe, the markets have been open


40 minutes. 2017 really, it is all about delivery. We saw the market


rallies after Trump's election. The markets are waiting to see if he


will follow through in his campaign promises how Brexit will be


delivered, but companies continue to report their results.


Samira Hussain has the details about what's out on Wall Street Today.


Lots of earnings to talk about today. AT will be reporting. It is


on the verge of closing its deal to acquire Time Warner for $85 billion,


but the US President, Donald Trump's opposition and regulatory approval


poses a threat to the deal. We can expect that investors will be asking


about updates. Boeing will also be reporting earnings. You will


remember the company got some attention from the then


president-elect Donald Trump criticising the high cost of


replacing Air Force One, that's the plane used by American presidents.


And finally, we'll be hearing from E-commerce site, eBay. It attracted


more shoppers in the holiday season. EBay has revamped its platform to


offer for products and new brands, all in the hopes of attracting


shoppers away from its rival, Amazon.


Joining us is Tom Stevenson who is Investment Director


So give us your take on what's going on, the Nasdaq hitting record closes


again on Tuesday. Loads of earnings coming out. Samira just rattled


through some of today's news. Your thoughts? The markets have been


strong since the American election. It has been on hope for next year.


2017 is going to be the year when Donald Trump delivers or doesn't


deliver and that's what markets are looking at out for now and that's


why really they've paused for breath now. They've paused for breath at a


new high. The earnings have been fairly good as well on the whole,


haven't they? That's helped too? The earnings have been OK, but they have


to be pretty good because the US market is one of the most highly


valued markets in the world. It's more expensive than most other


markets so unless earnings come through then I think there is a bit


of scope for delivery. So this earnings season is really important.


Now, let's talk about Japan. We saw there from Mariko, the Nikkei is up,


what's going on there? Yes. So, Japan has had two impacts really.


One has been oil. The cheaper oil has really helped because ever since


Fukushima it has been importing oil, but the exports particularly to the


US. This is pertinent given what Donald Trump has been saying about


the motor industry. So I think Japan has been off investors radars for a


long time. I think this is good news. It's good news for the market


because the Japanese market is not that expensive. So if we get more of


this good news and if the dollar strengthens and the yen weakens it


could be a good outlook for the Japanese market. All right. Fingers


crossed for them. Tom will be back in five minutes. More work to do on


this show for Tom! Still to come, from civil


war to civil aviation, we'll meet the man whose incredible


rise means he now sells private planes to some


of the world's richest people. You're with Business Live from BBC


News. Women are experiencing widespread


discrimination when it comes to dress codes at work,


according to a parliamentary report. MPs heard from hundreds


of women who have reported that the dress codes


they were subject to were sexist. They began an inquiry


after a receptionist was sent home Here's our business


correspondent Emma Simpson. Sometimes there's no choice and it's


not always attractive. But what about being ordered


to wear high heels? When Nicola Thorp arrived


for her first day at work, she was told by her employment


agency she must wear shoes When she refused, she was


sent home without pay. What they state is it gives them


a more professional look. Now I'm not entirely sure why adding


two or four inches to my height makes me more professional


or makes me walk in I don't think it affects


how I come across. You can see me now, this is exactly


what I would be wearing and if it's just a matter of a couple of inches,


I can stand tall She then started a petition


which led to an inquiry by MPs, who now want action


from the Government. We've come up with


three recommendations. Firstly, that the Equalities Act


of 2010 obviously isn't quite Secondly, we want to raise awareness


that wearing high heels or make-up may be a health and safety issue


in the workplace. Thirdly, we are going to hopefully


if it doesn't work, then we will be At this company, receptionists can


wear what they like. In its evidence, the Government said


the existing law was clear, and that the dress code imposed


on Nicola was unlawful. But the MPs are calling


on the Government to do more to make the law more effective in protecting


employees from Lots of you have had lots to say.


That's on our website. Also many other stories as well. Tesco shares


down 1% today in London. You may well remember the accountancy


scandal in 2014. The financial Times says the supermarket chain could be


facing a second legal claim as a consequence of that. That is on the


website. Rio Tinto doing well today in London.


Our top story: As President Trump tells carmakers to build more


vehicles in the USA, Mexican leaders head to Washington


as they try to keep the border open for business and concede that might


mean altering the Nafta free trade deal.


A quick look at how the markets are faring.


They are all higher for now. It has been quite a week this week. Up and


down. Today a combination of earnings and a good session in Asia


and the US helping. And now let's get the inside track


on how the world's top We're talking corporate


jets and private planes. They can be the fastest way to get


between back to back meetings But the market is


difficult for some. Jet inventory is rising,


as manufacturers churn out And once it has been bought,


the value of a jet falls rapidly. But aircraft broker Jetcraft


says that the resale market is still strong,


with large, ultra long range aircraft particularly popular among


business jet buyers. These types of large cabin jets


can link nearly any two Joining us now is Jahid Fazal-Karim,


co-owner and chairman Good morning. Good morning. Before


we talk about your business and what it does right now, let's talk about


your story. We have been explaining to viewers that UX -- escape civil


war at the age of eight in Madagascar. What happened next? I


will give you the short story because it could be quite long. In


1974, there was an uprising in Madagascar. I am of Indian origin.


The local population were going after Indians. My father decided to


pack his bags and we just left. We left to the neighbouring island. We


are a French citizens. We escaped a big uprising in Madagascar. I left


to go to school abroad. I love aviation, I love aeroplanes. That is


what brought me to what I did today. You were dead set on that as a


career, weren't you? Aged 18 you worked -- you moved to France and


got on with your career, working in the big corporate sector for quite a


while. And then this company, that is a big shift? Yeah, it is a big


shift. I worked for two big companies, Airbus and Bombardier.


Most of the people I worked with and for are still big friends. The


owners of Bombardier are still friends. At the age of 308I was


running sales and marketing at Bombardier. I come from a family of


entrepreneur to. I had to do something. I was at a crossroads, of


going down the corporate path or going on my own. It was the right


time for me to leave. I quit my job and left. Quite a big risk? Yeah, it


was. But if you are an entrepreneur, you don't think about risk, you


think about reward. It is the way you are required. For me, it was


about trying to set up a business, looking for gaps in the industry.


You obviously found this gap. Who are your clients? What soda prices


are they paying for these planes? My clients are from everywhere. That is


what makes my company unique when you compare Jetcraft to others who


do what we do. The world is global now. Our clients are global. They


are from everywhere. They are diverse. They can be big


corporations, they can be high-end individuals, rich people who


inherited a fortune. You have to cater for all these people. They are


all around the world. We sell in Africa, Asia, Latin America, the US.


I had to create a structure that would cater for all these people. If


you are a Chinese person and you want to buy a private jet, you want


to talk to somebody who speaks your language. We established the


structure. 50% of sales in the US. After that it is Europe and Asia.


Are you a business that is not affected by the global economy? It


costs millions to buy one of these. The super-rich are not affected by a


global slowdown. Or are you really impacted when the global economy


heads south? You are impacted. You have to be impacted. Our business is


well correlated with global economy. If you feel confident and you know


that business is doing well and you have a good future outlook, you make


investments. With billionaire Donald Trump in office, is that good for


you? For our business, Trump is not bad. Everybody has their political


views. As a business, he is a Republican, you will reduce taxes.


He will make the rich richer. And fortunately for us, these are our


clients. Corporations will get wealthier in the US. We will sell


more planes. Thank you for coming in. It has been fascinating.


They are tiny little figures that have made a Danish toy firm


iconic across the world, but could you tell the difference


between a real Lego figure and a copy cat?


It's a question we asked the man in charge of making them


Have a little look at that for me. What do you think of that? It looks


like a mini figure to me. What do you think of him? Two men? Which one


is yours? Have a guess. I would say this is Lego. This is not. OK, this


is Lego. It is not real. It is trying to be Lego. That is my


assessment of it. It has a branding similar to yours.


Tom is back. I do feel really sorry. I feel like we put him in a corner.


I think you did, yes! It's very difficult. Now the whole world has


seen that. Let's talk about the stories in the papers. Dubai airport


records 83.6 million passengers last year. Many more are going through


Dubai. It is a thoroughfare. That was 7% up on 2015. The forecast for


this year is 89 million. That is a similar growth rate. It is going


from strength to strength. It is in the right place. It is at the


crossroads of East West traffic, passenger traffic and cargo traffic.


Year about expansion in Dubai and other places in the world, runways


and airports being built. We are still grappling over a third runway,


possibly at Heathrow? Yes, it is a completely different mentality to


building infrastructure. I was in Dubai a few months ago. Driving down


the road between Dubai and Abu Dhabi, my driver said, this is the


new airport. Seven runways. They have a massive airport and they are


building an even more massive airport. And here we are still


agonising about a third runway at Heathrow. Let's talk about Donald


Trump. He signed yet more executive orders yesterday. This is about oil


pipelines. Give us some background? This is controversial. It is quite


an insight into Donald Trump's thinking. It shows that he is much


more interested about growing the economy than the environment,


because these pipelines are extremely controversial. They run


under native lands. There is a lot of controversy about building them.


The second interesting aspect is that he said they will be only built


if they use American steel in the pipeline. This is a real indication


of what he means by putting America first. This story is in the


Washington post and many other papers. The Guardian was noting that


they would need 28,000 people to make this one pipeline work. But


only 50 long-term jobs. The vast majority are very short-term jobs.


It is 28,000 that Donald Trump out -- can say he has created in a


sense? Absolutely. He is talking about building infrastructure, to


allow the growth in the future. Thank you for coming in. That is it


from business life today. There will be more throughout the day. --


Business Live. See you tomorrow. Hello there. Huge contrast across


the UK this morning. We have got mild and windy conditions in the


north and west. It is cold and frosty across the


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