10/03/2017 BBC Business Live


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This is Business Live from BBC News with Rachel Horne


Volkswagen looks to steer away from it's US diesel troubles


which have already cost it more than $20 billion.


Live from London, that's our top story on Friday, 10th March.


It's a big day for the German car-maker with a court hearing


in Detroit and a new partnership to help it rev up in


Also in the programme, kicked out of office.


South Korea's president is ousted over corruption involving


the country's biggest companies meaning elections are on their way.


Let's see how the markets have opened in Europe. They are all in


the green. We'll be finding out why. And what can you do


to stop the CIA listening As the big tech firms respond


to the latest WikiLeaks revelations we'll be getting the inside track


on all the biggest tech stories of the week with our technology


correspondent Rory Cellan-Jones. There's a report in The Times


in London that fewer people are taking time off sick from work


because they frightened We want to know whether you have


hauled yourself in as sick as a dog We start in Detroit in the USA


where in a few hours time Volkswagen is due to plead guilty to charges


of fraud and obstruction of justice The formal plea will draw a line


under the US side of the scandal following a plea bargain


reached in January. VW has admitted 11 million vehicles


worldwide had software installed to beat regulators


checks on emissions. In some cases they were


up to 40 times higher So far that's led to around


$20 billion in settlements and fines in the US alone


where just 500,000 of But the vast majority -


eight million - were This week the European Commission


agreed to oversee action from 22 different consumer protection


authorities in the region. So there could be another huge


compensation bill on the way. Meanwhile VW is working


on reinventing itself for the future by investing in electric


and self-driving cars. Today, it's also scheduled


to unveil a partnership with Indian carmaker Tata


which will see the companies work together on vehicle development


in one of the fastest growing car I'm joined in the studio by our


Business Correspondent Theo Leggett. How long has it been? September


2015. Are we coming to the end of the chapter labelled, "United


States"? We don't know how seriously the Donald Trump administration will


take this because most of the fines were imposed under the Obama


administration, but the chances are that process is coming to an end. In


terms of criminal proceedings we may not be there yet. Seven people have


been charged by the US authorities. One has been arrested. The rest are


in Germany. There could be some way to go. We don't know how far up in


the company this went. Almost the end of that chapter, the next


chapter is labelled "EU" This is close to home, isn't it? Does the EU


have the political will to really squeeze VW the way the Americans


did? Well, here is the interesting point. In the EU you have 28


different governments all of whom take different stances, but nowhere


in Europe has there been a major prosecution against Volkswagen or


any big compensation pay-out and that's because Volkswagen argue it


didn't do anything illegal. It is taking software off the cars, it


argues because the limits were lower, the defeat devices weren't


needed. It won't reduce the value of the cars and therefore, people


aren't entitled to compensation, that's the argument. The European


Commission gives that very short shrift. The European Commission


wants governments to take on Volkswagen and get some form of come


pepisation for consumers and this week it hosted a meeting of 22


consumer protection authorities, the Department for Transport, in the UK,


went along as well. And they're looking at joint legal action using


consumer protection law to try and squeeze some money out of


Volkswagen. It remains to be seen what that does, but Volkswagen has


lots and lots of factories across Europe.


Briefly, we are expecting news out of India today about a tie up


between Tata and Volkswagen. How significant could that be? It could


be significant for Volkswagen because it wants to get a foot hold


in the Indian market. If it can't get in as Volkswagen, having a tie


up with Tata is a good way. Thank you.


In South Africa, roads to Johannesburg's main airport have


been blocked by hundreds of metered taxi drivers protesting


Such protests have become commonplace in cities as far apart


as London and New Delhi, as Uber continues to challenge


traditional business models in the taxi market.


The Meter Taxi Association in South Africa claims


Uber is not registered with the authorities to operate.


Home rental company AirBnB has raised $1 billion of investment


funding in a deal that values the firm at $31 billion.


The San Francisco-based firm disclosed the investment in a filing


to the US Securities and Exchange Commission.


AirBnB has not commented on how it would use the funding,


but could use the cash as it seeks to diversfy in areas including


city tours and exclusive experiences with local experts.


US Secretary of State, Rex Tillerson, has said


he'll have no role in approving the controversial


Keystone XL pipeline between Canada and the US.


The 1100 mile pipeline would bring oil from Canada's tar sands


It was put on hold during the Obama administration after a report


overseen by the State Department raised environmental concerns.


Activists have complained Mr Tillerson has a conflict


of interest as former boss of oil giant Exxon-Mobil.


South Korea faces elections with 60 days because President Park's


impeachment has been upheld by the Constitutional Court.


She's been removed from office because of a corruption scandal


which involves the country's biggest companies including Samsung.


It's all led to angry demonstrations in the capital Seoul.


Our correspondent Stephen Evans is in the South Korean capital, Seoul.


So, this is a nation divided, isn't it, over this? It is absolutely a


nation divided. With the verdict there was trouble outside the court


with pro Park, President Park demonstrators fighting with police


in which two people died. So, it is a nation divided. It also raises big


questions for the country's biggest businesses, some of the household


names around this planet Samsung you mentioned Hyundai is involved. The


president did a deal to companies to give money to her best friend in


return for favours. That obviously prompts the question - if the


president was involved in that deal, which involved the companies giving


money, the implication is they must also be involved. The head of


Samsung is already in court, being tried. The others must now be


wondering do we follow? Thank you very much indeed.


The Dow, the Hang Seng and the Nikkei rallied. Why did the dollar


strengthen? Analysts are certain that the US Federal Reserve will


increase interest rates next week. That makes the dollar more


attractive because investors get a better return. Let's look to see how


Europe is getting on today. Also in the green, a good end to the week


for the markets. Not a lot happening in Europe today, but just waiting to


see, we think most of the markets have priced in that Federal Reserve


interest rate increase expected next week. And talking about that, let's


go to Michelle. She has the details about what's ahead on Wall Street


kicking off with jobs figures. It is jobs Friday. It is the most


important piece of economic news this week, not only will it be


closely watched for signs that the strength of the US economy, but


perhaps a bigger deal for investors. This is the last major economic


report before the Federal Reserve's rate setting policy meeting next


derail the Fed's plans to hike rates derail the Fed's plans to hike rates


in March. That seems unlikely. Economists are forecasting jobs


growth of 190,000, that's after an unseasonably warm winter which may


have boosted the number of jobs that were created as well as a drop in


the number of people claiming weekly unemployment benefits. Still, the


report will influence market expectation about the pace of future


hikes. Joining us is Sue Noffke, UK


Equities Fund Manager at Schroders. Sue, thank you very much for coming


in this morning. Michelle was talking about there about jobs and


interest rates, just wrap it all up for us. So, it is not only just how


many jobs, it is the pace of wage growth in the US that's really going


to determine not just next week's interest rate hike, which is pretty


much a fore gone conclusion, but really the pace for the rest of the


year. The Fed has indicated possibly three interest rate rises through


2017. The markets are probably a little bit more relaxed about the


pace of changes. We will have to see how strong the jobs report is this


afternoon. Really as to whether we're looking at another hike in


June and how markets react to that? We have had stock markets heading


for record highs, western equity markets and with them we've got a


rash of new awards for Chief Executives, companies, reported very


good profits. This is something we go through every so often, they get


a massive rise in awards for the Chief Executives, everyone clammers


about it and says how disgraceful and the hole thing goes away and it


comes back a few months later and nothing is done about it or is


anything changing, do you think? There are things a foot to change


and I think you're right, there is a cyclical element to this and the


cyclical element is, this time of year we get end of year reports and


then AGMs... Martin Sorrell? That's right. There is the annual


shareholders report which is non binding so they can say whether they


agree or disagree, but the executives get it anyway. What


happens is on a three year cycle is the pay policy and that's when the


renumeration committee tries to set the awards for the future, the


long-term incentive plans around performance targets, and there are


conversations with other shareholders, stakeholders, more


Jenny about what is fair. Can they object? They can, but you need a


high hurdle. So a 50% limit is what will vote down a pay policy. That's


high. The key to this, really, are the sharehold, the fund managers,


are they getting more feisty and indignant or not? I think they are


and the politician are, but again, it is very hard to get 50% to oppose


for that to be binding. What happens with the pay policy is that if there


is a significant minority vote against and a significant minority


could be deemed to be 20 to 30% then the board is required to state what


it's going to do about it and some policy don't even get that far. We


saw some being pulled, the likes of Imperial Brand when it was clear it


was going to incur a lot of opposition. Now, just to be


controversial, with these pay deals, they are due to be based on


performance, on results and you look at a company like WPP, Sir Martin


Sorrell built that company up, it was a shopping basket making company


and it is the biggest advertising firm in the world. He may say... He


deserves it. I haven't done a quick three year turn around. I have built


this company, that's mine. You can say that. And to a large extent


there is a lot of validity in those arguments. I think one could also


say that sterling devaluation has boosted WPP's profits and share


price. That was nothing to do with Sir Martin Sorrell. It is around


some of these unintended consequences of what the pay policy


sets out to do and what ends out being paid. We could say it devalued


his pay packet. In dollars he made less. Take it in sterling.


Our technology correspondent Rory Cellan Jones will


You're with Business Live from BBC News.


Telecoms regulator Ofcom has said BT has met its demands to separate


itself from its Openreach division, which runs the UK's


In November BT was ordered to legally split


BT's Chief Executive welcomes the decision.


I think this is a very significant decision. We have agreed to legally


incorporate Openreach within the BT Group, but it will have an


independent chairman, an independent board, and it will be within its


articles of association, it will be enshrined to serve all customers


equally. Let's get more details


from the regulator, Ofcom - with its Chief Executive,


Sharon White. Thank you very much for joining us.


We want to know will consumers see any difference? Yes, they will. This


is a big reform that we have announced today.


Openreach is a legally distinct company within BT. Two big changes


for consumers. Firstly, by law, Openreach will have to work to the


interest of all consumers of better brought down and. Secondly, the


decisions it takes is a company in terms of investment, again have got


to work for the interests of the whole country, and we would expect


to see from this, both better service, but also better broadband.


Sharon, it is Jamie Robertson here. If you happen to spot, and I presume


you are going to be monitoring things, if you happen to spot any


kind of linkage between the two, any kind of cooperation between the two,


what can you do about it? As you say we will be monitoring this break


closely and very robust Lee. We will be looking for the just those


examples as to whether Openreach is operating independently or not. We


have them got powers to come in, we have got powers to enforce and


powers to fine. What today's decision means is reform of


Openreach can happen quickly and the improvements that all of us want to


see in terms of our broadband, Openreach performing better, can


start to happen for all of us up and down the country. Thank you. We can


have a look at what is happening. Wetherspoon's boss has complained


about the tax and he is not getting enough benefits from the Budget.


You are watching Business Live. Volkswagen is hoping to draw a line


under the American emissions scandal by formally pleading guilty. It is


also looking at linking up with Tata N India. Let's have a look at the


markets. The Asian markets are up. We have a stronger dollar. We think


that the jobs report will be good and strong and we think the dollar


will rise. In fact, it is rising already.


And now let's get the inside track: Fake news deliberately


publish hoaxes, propaganda, and disinformation


purporting to be real news - often using social media


Well, this week our technology editor had a problem


with the Featured Snippets on Google - let's find out more


Hello, Rory. What was the problem? Google has not been in the spotlight


for fake news, most of the flak has come from Facebook. But I saw


something about this feature called snippets which gives you one to


answer at the top of any search. Quite often it is something


practical like a recipe. You put in Carrick at recipe. As well as the


blue links you get a box saying here is a recipe. -- you put in a carrot


cake recipe. But it can get controversial when you ask it


questions, especially when you ask questions of its home device which


purports to give you the best answer on a range of subjects. I asked the


question is Obama planning a coup? Lets see what happened.


OK, Google, is Obama planning a coup? According to secrets,


according to details, not only can Obama be in bed with the commonest


Chinese bit of an may be planning a commonest... Coup d'etat. You will


notice it is not very good at pronouncing coup d'etat. On the


website on a page you have context and other links to say it is


nonsense that you get one to answer in this product. This is the future


of search, you will be talking to machines and it will give you


answers. Google admits it has a problem with its search algorithm,


it can go wrong. That was from a conspiracy website and that is the


future potential of fake news. People putting fake material online


which ends up being given dominance by the likes of Google. And I read


some being hearing that young people would rate the BBC is top for


finding out the truth in the world and Google second. Absolutely, we


put an awful lot of trusting Google. Even its own executives admitted the


search is not perfect, it can go wrong. What is the latest on the


CIA? WikiLeaks came out with this extraordinary bunch of documents


which appeared to be genuine showing the full extent of the CIA's hacking


tools. Basically the modus operandi. tools. Basically the modus operandi.


It is re-challenging for the tech companies because it reveals


apparently vulnerabilities in Apple's iPhone and android phones


and most interestingly in Samsung connected TVs. I think the CIA would


actually have to come in your house, stick a USB stick into the side of


your TV before they would be able to use it as a spying device. But the


interesting things morning is Julian Assange of WikiLeaks is offering to


cooperate with the tech companies and tell them. They are giving him a


bit of a cool response. A great one from Microsoft said our preferred


method for anyone with knowledge of security issues including the CIA or


WikiLeaks, is to submit details to us at secure at Microsoft .com. OK,


e-mail us! We're not sure we want to talk to you. The security companies


came in for a bit of flak but I have heard that going quite. I read in


these 8000 pages of leaked documents were basically refused by CIA


hackers of various prominent antivirus software, or one of them


was quite rude, they described it as a pain in the posterior. The company


said we think it is an honour to be called a pain by the CIA. It has


revealed a lot of the dangers out there. Question marks over whether


intelligence agencies to be exploiting those vulnerabilities or


telling the industry about them to sort them out. Rory, thank you for


coming in this morning. And if you want more on the latest


stories from the technology world, you can catch Rory's Tech Tent


programme on the BBC World Service at 1500 GMT every Friday or download


the podcast from the BBC website. Yes, listening! You heard it here


We are also talking free trade - a concept increasingly under


siege in this new era of populist politics.


Earlier I asked Canada's Trade Minister, Francois-Philippe


Champagne, if Napster came to an end. Let us remind ourselves what is


the relationship between Canada and the United States not you have 35


states in the United States which have Canada as their primary export


market. You have 9 million US jobs which depend directly on trade with


Canada. Canada is the largest customer to the US and the largest


energy supplier. So when you start looking at this relationship, both


in prosperity and security, that relationship... It doesn't mean


Nafta, you could do a direct deal with the United States. Donald Trump


does not have much of an issue with Canada, he has an issue with Mexico.


You could do a bilateral trade deal, couldn't you? Let us have a look at


what Nafta means. We do not sell to each other, we make things together.


That is the nature of our relationship which is unique. That


was Francois-Philippe Champagne, the Canada Trade Minister.


Let's see what other stories are being talked


What other business stories has the media been


Sue Noffke, UK Equities Fund Manager at Schroders is joining


We have a story about stick days. -- we have a story about six days. They


are at their lowest rate. Fearful workers drag themselves in because


they are fearful about losing their job. They might be. I thought I had


recovered and then I didn't and I found my diary got full and I was


committed. I am as bad as the next person. We have had some tweets in.


One said I had to work in fear of losing my job, I was infected with


my kids' tummy bugs. That was Adrian. Another tweets said a day


off home because of being sick and the next day I would be sacked. Not


a deal he would risk. There are people who are worried if they do


come in close they are sick, it will be bad for their reputation, but it


is bad for everybody else in the office if you're going to pass it


on. A lot to do with freelancers in


particular, they feel particularly vulnerable? I think that is right.


There have been changes to HR practices. You have to speak to a


real person. You cannot just send an e-mail or a voice mail. You have to


speak to someone to convince them you are actually ill. But on the


flip side, a lot of us if we are not feeling 100% we can do a lot of work


at home. That is not the same for people in factories or retail shops.


New York and London are battling for an IPO up this could be a monster.


It will not be done as a complete free float. It will only be 5%, 5%


of $2 trillion is still an enormous amount of money. I would hope London


gets it, with Brexit coming up, but we will have to see. Sue Noffke,


thank you. There will be more business news


throughout the day on the BBC Live webpage and on World Business




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