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Live from London, that's our top story on Wednesday 5th July.
General Motors is hoping to get the all-clear for the sale of Opel
and Vauxhall today, but workers fear for their future,
as the new buyers talk of "speedy" cost savings.
And Narendra Modi has become the first
Indian Prime Minister to visit Israel ever, with new military
and cyber security deals at the top of the agenda.
And we have the latest from the markets.
All of them down, but the FTSE only a touch, just .03 of a percent. More
on that later. And we'll be getting
the inside track on on a business that's been milking big profits
around the globe, we're going to be speaking
to the boss of Arla, one of the world's
biggest dairy companies. Also, as Volvo calls time
on the internal combustion engine, are you ready to give
up your gas guzzler? Get in touch, just use
the hashtag #BBCBizLive. whether or not to give the green
light to General Motors for the $2.5bn sale
of its European operations. GM is hoping to off-load Vauxhall
and Opel to the PSA group, that's the French company,
which owns Peugeot and Citroen. It's easy to see why
General Motors wants to sell - their European operation,
which is dominated by Opel, has lost If successful,
the deal would make PSA the continent's second-biggest car
maker, after Volkswagen, and ahead Opel employs 38,000
people across Europe, and it's feared the sale could put
thousands of those jobs under threat, with workers in the UK and
Germany considered to be most at With me is Ozgur Tohumcu, Chief
Executive of Tantalum Corporation - who specialise in analysing
automotive data. Ozgur, thank you so much for joining
us in the studio. Do you think this deal will go ahead? I think it will
go ahead, because if you look at all the data and the money just
presented, it will be the second largest auto-maker in Europe. I
don't necessarily think it will be a moniker listed position for the new
company, so it will be cleared in my opinion -- a monopoly. Given that GM
have lost $9.1 billion through Opal, why do PSA want to buy the company?
To your point, the European operation for GM has not made a
profit since 1999, and PSA once it probably for two reasons, one is
that you will have access to the second largest market in Europe,
which is the UK, and then it allows them to distribute their cars across
a larger scale. Will they use it to get out of Europe at all, because
PSA is notoriously European continent based? Will they go to
China, export to the States, anything like that? Towards emerging
markets may be, I doubt towards the US because PSA tried to enter the
American market for many years and has not been successful, but
ultimately I think it is a play for the European market. There is
concern this merger could bring job cuts for workers. There must be a
lot of overlaps. There has been a lot of good communication between GM
and the PSA group, Opel and Vauxhall, as far as I can look at
the media following the press releases, the German work
councillors and the UK unions were given a lot of assurances about now
job cuts, but history says in the long-term if you want to achieve the
types of savings they are looking for, you have to do some reductions.
What is interesting about the timing of this, the timing in the
development of Holkar industry is that we all know in ten years' time
the car industry will completely different from whatever it is like
at the moment. So how does this move really play -- the Hoff car injures
three. -- the Holkar industry. Yes, some of the emerging trends. You
highlighted one of them around a electric vehicles, you have the
drive towards autonomous vehicles. There is not much talk about how the
new entity will be embracing these new trends. So it is all up in the
air? For addressing these trends, think it is a lot in the air and we
have to realise all of these companies to be successful in the
long-term, they have to embrace of these big shifts in the car
industry. OK, thank you very much for your time.
Let's take a look at some of the other stories making the news...
Volvo has announced that it is the first traditional
car-maker to shift to pure electric and hybrid production -
signalling the end of the internal combustion engine.
Every model made from 2019 onwards will have an electric motor.
The company said it will also offer hybrid options on every model.
London remains Europe's number one hub for technology
The Mayor of London's agency, London Partners, say that
in the first half of 2017, private equity investment
in the capital's tech sector totalled a record $5.8bn.
During the same period, Berlin was the next most popular
Emirates has said the cabin ban on laptops no longer applies
In March, the US banned cabin laptops and other large electronic
devices to and from eight mostly Muslim nations, fearing bombs may
Just a quick look at this story coming out of India on our live
page, posted by Simon Atkinson, saying snapped deal rejects flip
card offer. This was a long awaited merger, India's two biggest
home-grown online retailers. It looks like talks have hit the rocks.
Snapped deal rejected a takeover. Amazon is making big inroads into
India so it is thought that negotiations might get back on
track. Nobody has said anything officially yet on that one.
Nahendra Modi is in Israel on the first ever official
Sameer Hashmi is in Mumbai - what's on the agenda?
A lot, if it is the first visit ever. That's right, it is a
significant and historic trip, the first Indian Prime Minister to visit
Israel in 70 years, since India got independence. A lot is on the menu,
especially deals, I want to talk about the fence first, that is the
big area where deals are expected. India is Israel's biggest market for
arms -- want to talk about defence first. India is expected to order
8000 spike anti-tank missiles, which would cost about $500 million. That
deal could be signed on this trip. India could also signed MoUss for
buying more weapons in the future. Last year India signed deals worth
$2 billion alone when it comes to defence. Israel and India space
agencies could sign a deal where they could collaborate on some
projects, and Israel could look at buying or using India space research
Organisation's lunches to launch its own satellites. In addition to that,
water and agriculture are the other two sectors where deals are expected
to be announced. So yes, multi-billion dollars of deals could
be announced at the end of this trip and we are expected to hear
something by this evening. Good to hear from you, thank you. A quick
look at markets. Completely unfazed, then OK, by the missile tests in
North Korea. All of the markets a little bit of looking reasonably
healthy. On the European markets, this is where they have started. The
FTSE hovering around 73.50, 73.60. Read tax is down a touch. Remember,
later in the week we have the jobs figures coming out of the US. We are
slightly holding our breath for that but we would talk about that a bit
in a second. Meanwhile, looking ahead to what is going on in the US
later today, remember we had a holiday yesterday.
People will be rubbing their eyes as they get back to business on
Wednesday after the July four holiday. Markets and businesses were
closed in observance, so Wednesday will really be back at it for most
people. The Federal Reserve, America's central bank, will release
the minutes from their last committee meeting back in June. At
that meeting, they decided to raise interest rates, and it was the
fourth time they have done so since the end of the recession. The Fed
also revealed plans to reduce its monster sized bond portfolio but
during the financial crisis. -- bought during the financial crisis.
The minutes will be interesting because policy members have
expressed concerns about inflation, that it is quite tepid, so investors
will be looking to see if any of that anxiety might put the brakes on
further increases to interest rates. Joining us is Mike Amey,
Managing Director and Portfolio Manager at investment
management firm, PIMCO. We will start with the Asian
markets, something you might have expected to see a big reaction on
the markets with a North Korean missile test, but it hasn't really
happened. If you look back to the last six to nine months, one of the
things we were worried about with a change in the US presidency was some
more aggressive foreign policy, and potentially that could create some
volatility is in the markets. You have had all of these nuclear tests,
these ballistic tests, rather, and a very muted response, effectively
just moving on. Because they just anything it is going to come to
anything, for...? I think there is no clarity. I thought markets hate
uncertainty? But nothing has changed. We have seen this before,
one way or another. I do think it is quite interesting that the markets
are just not interested, which is potentially a little bit complacent,
frankly. I have written down in my notes here, missiles and money. The
second question is about money, world pay, this great transaction
processor. People are chasing it. It will go for a lot of money. WorldPay
is a transaction system, when you pay through your mobile phone
banking app or through contactless, these are the people who do the
transactions, and they are doing very well at it. The company has
been valued at eight to nine Ilion pounds. It rose by ?2 billion
yesterday alone. Which ironically is what RBS sold at four in 2010. Poor
RBS. A tough one to look back on. Unfortunately the time they had to
sell it, they had no choice was that RBS a British state-owned bank that
had to be bailed out in 2008 and then had to sell off its assets, and
this was one of them. Enda yes, sold the two billion and now it is worth
eight to nine. We will be talking about Bravo getting rid of the
internal combustion engine, do you have a hybrid car? We do have an
electric car actually. Head of the curve, I am still on a diesel. So am
I. Still to come, we will be getting the inside track on a business that
has been milking big profits around the globe.
You are with Business Live, from BBC News.
Food prices at the supermarket are continuing to rise,
according to the latest shop price index from the British
ambient food up 1.5% - over prices were down 0.3% in june
ambient food up 1.5% - over prices were down 0.3% in June
helped by non food products falling 1.4% in price.
Rachel Lund is Head of Retail Insight Analytics
I suppose what surprises me about these figures is in some respects of
them are still going down, even though we have got inflation at
2.9%. You are absolutely right. Year-on-year, some of these prices
are going down, although what we have seen the last six months as
they are edging up, it is just that at the back end of last year there
were some big falls in prices, so quite a lot of ground to recover,
particularly in non-food prices. So what is actually reversing the sort
of devolutionary trend in food prices? Is it to do with the weaker
pound or what? It has a big part to play. The currency has fell 12%
since the referendum last year, which has a big impact on input
costs, but also to monitor prices as well first we have been through a
period of low and falling commodity prices, which has reversed over the
past year, so we have seen some big gains in underlying commodity
prices. Looking forward, where do you think prices will go in the
supermarkets? Prices will continue to head upwards. We have probably
seen the lion's share of increases in food prices, they will almost
certainly had up a little bit but we have still got a little bit more to
come, particularly in the non-food area. We expect to see the shop
price index, which we report on, heading to inflationary territory in
the next few months. What you think is the major factor in the moment in
terms of determining where prices go? I think it very much is the
currency movement. That takes some time to feed through, because of
hedging contracts and also because of stock cycles as well, and we
haven't seen all of those impacts play out. Thank you very much for
joining us. We will look at another food related item on our live page.
Food and cars and missiles today, isn't it? Do you do your grocery
shopping online? Sometimes but very rarely. What do you think the
average weekly Ocado costs? 50 quid. ?108 and that has gone down. More
details on that on our live page. You're watching Business Live -
our top story The EU Commission will decide today whether or not
to give the green light to General Motors sale
of its European Vauxhall and Opel A quick look at how
markets are faring.... We have moved upwards. A little bit
undecided, the FT-SE up one quarter of a percent.
Now let's get the inside track on the big business
Our next guest, Arla Foods, is one of the world's
biggest dairy companies - that's been going since
the 1880's and now turns over in excess of $10bn.
The brand does not have an enormous profile.
Based in Denmark, Arla is an international
It's major brands include Lurpak butter and Castello cheese.
Peder Tuborgh is the Chief Executive of Arla...
Welcome to the studio. The company has a long and deepest to read.
Telus when it started, and how it is led by cooperatives? The company is
much older than us. Since the 1880s. We are owned by farmers in seven
different countries. Including 2500 farmers in the UK. We have a big
base of farmers that own the company this because it is owned by the
farmers, what difference does that make? Why are you different from an
ordinary milk company? We're different, every penny we make our
profits go right back to the farmers. I have employed by farmers
to make sure the milk price is as high as it can be in any given
situation. Let's talk about the milk price. About one year ago in the
headlines in the UK. Unsustainable, farmers getting less than it was
costing them to produce it. Where is it now? We have been through a
recession, global recession, millions of farmers can echo that.
It has recovered. We are on an upward slope. We heard from your
previous interview there is inflation, but nothing to do with
the pound, it is a global thing. Do your farmers make more from their
milk than other farmers? We strive to be in a position. That is not a
yes. At the moment yes, but you can find times when we are just average.
Why is it so difficult to get a high price for milk, it is such a natural
food, something we will need. The world's population is growing. Why
is the milk price so volatile? It is Wallace are because of the supply
side. Farmers all over the world react to milk prices. When it is
down this stop producing. Which they have done in the last year. Then
there is a lack of milk, guess what, but very short at Christmas time. We
have a desperate need for butter. By your Christmas but now. Where will
milk come from in the future? The big mass intensive farms in the huge
acres of them. Or will it come from organic food and farms? We are the
world's biggest producer of organics food. 1 billion litres of milk. Our
organic farmers are amongst the biggest one. It is having bigger
farms, that is a trend for 125 years, but doing it in a sustainable
way. That is why we are unique, doing it without farmers, to make
sure as they become more efficient they are doing it in a sustainable
way. What new markets are opening up? More sales in China? Yes
certainly, we have partnerships and co-owner ships in China. I'm very
focused on Africa and sub Sahara, we have open the facility in Nigeria.
What concerns do have, compared to the UK? It is new consumption. Plays
out in a different way. The Chinese do not eat a lot of cheesier. How
that cheese market will play up is a wonder. What is your contribution to
greenhouse gas? Your methane production is massive. Actually a
serious problem. It is, that is how the carriers. A force of nature.
Well, you can do a lot of things to research, how you feed the cows. We
have great programmes around. On the supply side, we have the biggest
fresh milk dairy outside London, carbon neutral. 80%. That is how
you're going to feed an enormous market coming in China. Increasingly
using dairy products, which 20 years ago they did not. Still the per
capita consumption is much lower than Europe. That will drive the
excitement in the future of the dairy industry. Thank you so much
for coming in. 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 pages where you
can stay ahead of all the day's breaking business news. We keep you
up to the latest details with insight and analysis from the BBC's
team of editors right around the world. We want to hear from you, get
involved on the BBC Business Live page. We aren't Twitter. And you can
find us on Facebook. -- we are on. What other business
stories has the media been Joining us again is Mike Amey,
Managing Director and We will start with his Volvo story.
Explain what this is about. The end of the combustion engine? Volvo
announcing that by 2019 all of their cars, they will not have a
combustion engine in any car from 2019 onwards. The first classic car
company. They will have an option of combustion in the Highbury. Name one
is developing in internal combustion engine now, he would? You have the
transition going on. The key question for the car industry, where
the focus is. Whether the incumbents will be the dominant force, or the
newer companies coming through. Volvo trying to be one of the newer
companies, making the move early. You are a convert? We have an
electric car. It is great. Really enjoyed it. What about the range?
About to edge and 50, 200 six miles. What happens if you want to go 500
miles. We have a diesel car. We thought that when we were told the
authority by diesel cars this would you give up your gas guzzler? Andy
says electric cars are not the future. Hydrogen fuel cells will be
the only way forward. Wolfgang says he would go for it for the right
place. Jim says why have a car when you can have a new
Uber. Story in the US about people employed in carp production going
down. What Mr Trump promised, to keep industries like this employing
people. There is a question as to whether the demand is not there.
Everyone has their new car. There are some issues there. The
workforces down a of percent. Of course the US is supposed to be one
of the stronger economies. Couple of warning signs we should all be aware
of. If there is a slowdown in the car industry, does that mean we will
get the broader slowdown in the consumer sector. A story about the
Green Day concert due to take place in Scotland, cancelled at the last
minute. A staff turning up to do a 12 hour shift did not get paid. You
many reasons. I was lucky enough, many reasons. I was lucky enough,
they are touring Europe, I was lucky enough to go to the London gig on
Saturday. We might have a photo of that. Team photo. That is a Lions
topped . People working at the gig, 200
people not paid for this turning up to do the 12 hour shift. Zero hours
contract, the gig was cancelled, they got nothing. A good example of
how tough it is if you are on those contracts. What can you do about
that? Any legislation? Everybody would love to bring in laws and
regulations? You could say there has to be a role if you are there, this
was half an hour before the thing was supposed to start, one thing you
could say, if you are there X hours beforehand. People would pay for
childcare. They have to get there and get back. The workers can
dictate the terms of the contract. You can start to turn things around.
Let us know what gave you are going to next. All we have time for an
business. More business news through the day on the BBC website.
We will see a few contrasts in the weather across the UK in the next
few days. For many parts of England and Wales it will turn very warm, if