06/03/2017 BBC Business Live


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This is Business Live from BBC News with Sally Bundock


A European car colossus in the making.


France's Peugeot-Citroen is buying General Motors' European business,


including the Opel and Vauxhall brands, for $2.3 billion.


Live from London, that's our top story on Monday 6 March.


Two car giants come together but is today's deal


a sign of things to come for the European autos industry?


What does it mean for jobs and the choice of vehicles on the road? We


will be getting an expert view. China's Premier cuts the economic


growth target for this year. We look at the risks to the world's


second largest economy. And the European trading week has


begun. All the main markets are headed south. In Germany, Deutsche


Bank shares are pulling down that market.


We'll speak to the boss of a company bringing the likes of Hozier


and Bastille straight to your living room.


Today we want to know, as more car brands consolidate, does it matter


which badges on the back of your car? Is there enough choice in the


car market? Do get in touch with your thoughts


on this story. Our top story today. General Motors, as was widely


expected is selling Opel and Vauxhall


General Motors will sell Opel


the French company that owns Peugeot and Citroen.


As we speak, both companies are hosting a press


Buying GM's loss-making European operations will make PSA


the continent's second-biggest car maker after Volkswagen and ahead


Last year, PSA and GM Europe sold a combined 4.3 million


vehicles and posted revenues of $75.9 billion.


But the deal has already raised fears in the UK the jobs of 4,500


workers at Vauxhall's plants could be under threat.


In Germany, where two-thirds of Opel's 38,000 staff


are based the Government has been seeking reassurances


Opel had hoped to return to profitability by 2016,


but the slide in the value of sterling following the EU


referendum last June contributed to its 272 million


With me is Jim Holder, Editorial Director of Autocar.


So, is this a good deal for PSA given that GM has been losing money


there are a lot of questions because of the $15 billion loss since 2000.


Most people are realising that PSA seems to have a very good deal on


their hands. If they can leverage the scale they are going to create


through this deal, they could turn the business ran very quickly. It


was on the cusp of making a profit last year and think they can make a


proper bishop was it could turn into a very good deal very quickly. Will


it be a good deal for workers? Could be factories right across Europe


under this group. There have been real concerns about jobs. In the UK


it has been stated jobs might be more safe following a post Brexit


world. There are around 20 factories in all Europe, two in the UK. They


all need to prove their competitiveness. They are all


underperforming and are being underused as they will have to


rationalise what they have. In a hard Brexit situation, where there


to be tariffs on goods, he could gain an advantage by having a


factory here. Certainly the market share of Peugeot, such in and


Vauxhall would be around 400,000 cars and could keep a factory


running very effectively. -- citron. Would there be less choice for


consumers? In all likelihood, probably not. There will be more


choice of engines and body stars because they would utilise the same


parts in different cars. They will have different bodies and different


badges on the cards, much like the Boxall group has done very


successfully for many years. What has happened regarding pensions? GM


has effectively agreed to carry on but burden of the pensions. Those


that transferred to it is agreed to put in 3 billion euros as a payment


to cover them. PSA comes away without any real liability for the


pension transfer. Very briefly, why did GM want to off-load this group


if PSA can see a bright future for it? They are talking very clearly


about agility. Opel was a small part of it. It was constrained. PSA sees


a way of unleashing the potential, investing in and making something of


as a result. Thank you a much for talking to us. It is all about the


timing. The Geneva motor show gets under way in earnest and so these


two companies wanted to make that announcement ahead of that. We saw


live riches of the ongoing press conference in Paris. Let's go onto


other news. Deutsche Bank plans to raise


about $8.5bn by issuing new shares. The share sale by the troubled


German bank is part The bank will partially


float its asset management business and retain Postbank -


the retail banking business it had Deutsche will be reorganised around


three divisions: private banking and wealth management,


asset management, and corporate Germany's biggest bank is trying


to reshape itself after grappling with huge losses and nearly


$16bn in legal fines imposed The US is suspending a fast track


service often used by technology companies to recruit


foreign skilled workers. The H-1B visa is issued to tens


of thousands of highly skilled Currently, companies can pay


extra to get the visas But starting in April,


this process will be That is following some of the


changes made by President Trump. Aberdeen asset management and


standard life have agreed terms for a merger. It will create one of the


UK's largest fund managers with assets of $810 billion. Let's talk


about China. China's national people's congress


convened this weekend in Beijing's Great Hall


of the People. The 3,000-strong event is staged


each year by the party, and is a forum to rubber stamp


legislature for the year ahead. But China's economy is struggling,


and in Premier Li's annual report he gave some clues


about the year ahead. He talked specifically about growth


in China. That is really a key factor that many market watchers are


keen to find out just how well, or not so well, China is performing.


That is right. 6.5% would be the kind of growth rate many economies


elsewhere would die for. You are right. In the Chinese context, it is


another sign of slowing growth. We are a long way from the era of


double digit economic expansion. To some extent this is all planned, all


to be expected. China is supposedly going through this economic


transition, weaning itself of the old, government-sponsored growth


based on investment and exports to one based on a consumer economy,


consumer spending. The real worrying thing is it has not yet shown any


sign of being able to wean itself off the large amount of borrowing


that is still needed to grow this economy. In fact, as the economy


grows by 6% to 7% year, debt is growing by double that amount. That


is very troubling to some observers. In the opening address to the


parliament, we heard the premier talk once again about tackling state


owned enterprises, cutting overcapacity, and we have heard the


finance ministry took that getting on top of local government


borrowing. All of these thorny issues. They have spoken about all


of these things before and they are proving very difficult promises to


fulfil. Thank you indeed. That news out of China was so important for


markets in Asia today. Also what was happening when the smart kits that


is the markets was -- these markets work trading where the missile


tests. We had the chief of the US Federal reserve, the central bank,


talking late yesterday for that many were reading between the lines as to


what it means regarding the Fed meeting next week. Most believe we


are looking at a rate rise in the US next week is all that was going on


in the Asian trading session. Let's have a look at Europe right now put


as I speak, we are watching press conference in Paris. The boss of GM


and PSA group, all talking to the press. The Peugeot shares are up and


up. Deutsche Bank shares are down some 6% of the back of their news. A


lot for investors to die just. We will talk more about these stories


in a moment. And Michelle Fleury has


the details about what's ahead There is expected to be an interest


rate hike in March. Only the third since the height of the recession.


The next meeting is in a week and a half. Between now and then, the big


economic report is non-farm payrolls. It is unlikely to change


the outlook on the economy unless it is really bad. Most expect the


latest snapshot of the labour market to show employers added 186,000 jobs


in February for the given the recent surge in business and consumer


confidence, as well as a rise in inflation, the Fed is accepted to


raise interest rates sooner rather than later. Wall Street is now


wondering how many more rate increases to expect this year. As


for the rest of the calendar, the economic calendar this week, Monday


sees the release of data on factory orders while the earnings front is


relatively quiet. Joining us is David Buik


from Panmure Gordon. Thank you for coming in. Let's first


of all talk about Deutsche Bank. It is going to try and raise billions


through a new rights issue. Do you think these new shares will be


attractive to investors, given the trouble is that Deutsche Bank has


been facing? You would like to think the chief executive has shaken all


the skeletons out of the cupboard. There are plenty of them. If you go


back eight years to 2007, just prior to the financial crisis, Deutsche


Bank shares worth 120 euros each will stop them down now to 17 and a


half after the fall. That is enormous. Deutsche Bank has always


been where it required Morgan Grenfell, after they shared the


asset management business, they were the biggest traders or investment


bank in the world in terms of derivatives. Not like Goldman Sachs.


The trouble is they got too big and forgot what a bank is really four,


which is to have money from deposits and to lend money. As things have


unfolded since the financial crisis, they have had one catastrophic


problem after another. As you alluded to, I cannot remember which


one of you it was, 15 billion euros worth of fines, whether it is for


foreign exchange, gold, cross frontier bond dealing, this is the


problem. He has shaken the trees and is selling the asset management


business. I think that is a mistake. He is going to do what he should do,


which is take the emphasis away from investment banking and more to


domestic. The same is happening with Barclays on a much smaller scale.


Another story which has been out there over the weekend and confirmed


today, standard life Aberdeen asset management teaming up. Quite a bit


of money coming together. Your thoughts? It makes a lot of sense. I


should think Nicola Sturgeon is smiling like a Cheshire cat. That is


the head of the Scottish National party just in case people are not


familiar. The chief executives, a top man and another who is at the


forefront of the media. Putting the two of them together, and their


basic emphasis on where they are strong makes a lot of sense. Both


shows are at between 8% and 10% this morning for the Eid think the market


likes the idea of the merger. A busy day. A lot of news going on. We will


see you again in about five minutes. He will return. Still to come...


We'll speak to the boss of a company bringing the likes of Hozier


and Bastille straight to your living room.


It is relieved to discourage people from using their smartphones and not


giving the respect to bands are used to do. We will have that discussion


in a moment. It's National Apprenticeship Week


and a new report out today says 1.5 million degree level


apprenticeships are needed to boost The Chartered Management Institute


are calling them the "missing middle" and are calling employers


to use higher level apprenticeships to improve gender diversity


Petra Wilton is from the CMI. How should this be done? How do we


encourage more women to achieve those positions? It is a wonderful


coincidence that we have got coincidence that we have got


national apprenticeship week and international women's day.


Apprenticeships go up to the highest levels. There is Masters being


developed and at degree level we see a chartered management degree ablend


tisship which out of the 250 early starts half of those are women which


is really encouraging progress. As you led, we need 1.5 million female


managers at that middle by 2025 if we're going to get a better balanced


workforce and have gender parity. What needs to be done? Companies


need to invest better in promoting women through the ranks in their


organisations. We see a classic pyramid. Women enter the workforce


equal to men, so they're 50/50 so but thee peter out. And single


digits when we look at the number of female Chief Executives at those top


companies. But that's to do with the pregnant pause, isn't it? That's to


do with women having children? That can have an impact, but for many


women they are not taking much time out and apprenticeships which are


all age means it can give women the confidence and the route back into


the workforce. Why should women not have a career after having children


and coming back in? Apprenticeships can be used used an all-age


programme to upskill the women and give them the confidence to rejoin


their organisations and take their careers forward. Petra, thank you


very much. No doubt there will be more information about that National


Apprenticeship Week. We're covering that deal, PSA to buy GM's Opal


business. There is a lot of reaction on the Business Live site. Lots of


speculation about what is going to be happening to jobs. Thousands of


jobs at stake. We will be following that story. You're watching Business


Our top story, General Motors will sell Opel


and Vauxhall to PSA Group, the French company that owns


The deal is worth $2.3 billion and will make PSA the continent's


second biggest car-maker after Volkswagen and ahead


Now let's get the inside track on a business which is hoping


to return music back to its most stripped down form.


In the age of streaming and social media, it's easy


to become disillusioned with the commercial music industry.


One company hoping to change this is Sofar Sounds.


It provides small-scale gigs in secret locations such


as converted warehouses and even people's living rooms.


They're in over 300 cities around the world


The company's co-founder Rafe Offer joins us in the studio now.


Hello there. Thank you for coming in to talk about this. The whole


concept of this was started because you got fed-up with the way people


were disrespecting bands at concerts that you went to. Tell me what


sparked the idea? The co-founder and I were in a bar in London and trying


to listen to music, a band called the Friendly Fires. There was a


moment when we realised that half the room were talking or texting and


you could hear the beer bottles clanging in the background from the


bar. We thought there must be a better way to enjoy music. We said,


"Let's get out of here." Rocky Start is the name of your partner. That's


ironic when you're trying to start a new business. Was it a rocky start?


How did it begin? The two of you were there. You thought this is not


great. We think it is disrespectful. How does it become a company? We


connected with a third person at the beginning who is no longer involved,


but helped us get started called Dave Alexander. Rocky and I can't


play or sing, you wouldn't want to listen to us! But Dave is a good


musician and we went to his front room and we asked people to just


come and listen as you said, shut their phones off and just focus on


the music. Eight people, you could hear, his grandfather clock in the


background ticking and we had never been in an environment that was so


quiet and that was the first one and it has grown since then. You tapped


into a real need for music lovers to go somewhere that they really think


they have no other distractions, but to listen to the music. How have you


managed to grow it so fast because it is big now, what you're offering.


Doesn't that scale present difficulties? Yes, it kept us up


many sleepless nights. How could we scale and keep it small? We went


from London to Paris and New York and Melbourne, Mumbai, but each


place we had the same rules in place which was be quiet, keep it under


100 people in some sort of intimate space or most often a living room


and just ask people to respect the music and that was a way we grew.


The second way was through social media and YouTube and ampifying it


that way. You're in over 60 cities. In seven of those you have got paid


staff. There are so many gigs you need staff. Richard Branson has


invested in your company. How do you take this forward? In many of those


cities it is voluntary people and people approach you to say, "I want


to be the musician on offer in the front room." When Rocky and I


started, it was just one event a month, hobby, easy to do, in cities


like New York and Los Angeles and Oslo, we said could we do more than


one a month? Could we do one a day? That was the divide. That was where


we went from paying someone a full-time salary and getting enough


money to support the artists and pay the people a full-time salary. All


the other cities are that light touch with the hope if they're


interested, in converting from being basically a volunteer hobby to a


full-time job. We've run out of time which is a


real shame. There is so much more to say. Well, you must come, both of


you. Thank you very much. You're not going to be in my living room. I've


got a dog and three boys under the age of 11. It would not go down


well! In a moment we'll take a look


through the Business Pages but first here's a quick reminder of how


to get in touch with us. The Business Live page


is where you can stay ahead of all the day's


breaking business use. ahead of all the day's


breaking business news. We will keep you up-to-date


with all the latest details, with insight and analysis


from the BBC's team of editors Get involved on the BBC business


live web page, bbc.com/business, on Twitter @BBCBusiness


and you can find us on Facebook Business Live on TV and online,


whenever you need to know. We have been talking about the deal


and wondering whether it will lead to a contraction in the number of


brands on offer. Do you really care what badge is on the back of your


car, David? I'm not really a petrolhead I have to be honest with


you. If it has got four wheels and an engine and I can get into it


without crippling myself, I'm happy. I think it will do. This is becoming


a highly competitive business. You've got so much variances with


foreign exchange, the euro value and the drop in the value of sterling


and dollars and managing to equate this means the margins will be


greater and therefore, volumes and making the public accept a smaller


number of ranges seems very sensible. I think that might it is


appoint a viewer, he says, "Of course, it does matter what badge is


on your car. How else can one show off in front of their neighbours?"


Oh dear. Some people it is all about brand! Let's look at the stories in


the papers. In the UK here, Sir Philip Green making it into the


weekend papers. No big surprise. It was a big week last week. This is


for our international viewers, this is the retail tycoon who did own


BHS, sold it for ?1, it then collapse add year after it was sold.


There is a pension deficit issue and all sorts. It has been a very


emotive story. In fairness to Sir Philip, this was never a legal


issue, it was a moral issue and he stepped up to the plate with the


?350 million towards the black hole in BHS which affected 19,000 people.


We've got another thing. Arcadia, he owns companies like Topshop and


Dorothy Perkins, there is supposedly a black hole in that of about


?180,000 and there is a general speculation that rather than being


asked he realises his responsibility and he will actually have 20 to did


it. Sales were down over Christmas by 6.5% which I think nos not the


order of the day at that period of time. A pensions deficit is


across-the-board, isn't it? The deal between General Motors and PSA


Group, PSA Group is not taking on the pensions deficit? It is across


the spectrum. The problem that hasn't helped we have had zero


interest rates for a long period of time which means bond yields are


hopeless. We are living a lot longer, but there is an area of


people sticking their head in the sands like ostriches, it isn't going


away. Even somebody like BT, a well run company, ?5 billion black hole.


Incredible. David Buik, thank you. Thank you for all your information


as usual on the markets. We will see you again tomorrow. Bye-bye.


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