The City is having a busier year than pessimistic observers – including me – might have expected. The biggest deal on the block, the £39 billion bid by Australian giant BHP Billiton for its London-listed South African mining rival Anglo American, has fallen away. But plenty of bankers’ and advisers’ fees have already been clocked up on both sides and BHP may now pursue global domination of the copper market by stalking other London-listed miners such as Antofagasta of Chile.
Meanwhile, the £3.5 billion takeover of International Distribution Services, the parent of Royal Mail, by Czech billionaire Daniel Kretinsky’s private EP Group, is cruising ahead with scant opposition – but with two-thirds of the purchase money coming as debt (rather than equity) provided by banks such as BNP Paribas, Citibank and Société Générale. Again, the City’s in the thick of it, as it also has been in selling blocks of shares for companies and institutions to raise some£9 billion in more than 100 significant transactions this year so far, according to London Stock Exchange (LSE) data.
All to the good, after so much talk of dismal times for new LSE share listings – little more than £100 million raised in the year to date. And if activity stays lively, despite the expected Labour victory, we’ll find out whether Rachel Reeves really meant it when she said she has no intention of bringing back the Brussels-designed cap on bankers’ bonuses that was scrapped by Kwasi Kwarteng. Reeves’s announcement in February provoked left-wing fury, the Momentum group calling it ‘a terrible decision, totally out of touch with Labour’s values’. The richer the City, the sooner we’ll discover the depth of the fissures in Labour’s façade.
Name game
On a similar theme, the most interesting thing about last week’s damp-squib Labour-supporting letter to the Times from 120 ‘business leaders’, almost none of whom turned out to be recognised corporate chiefs, was the prominence the newspaper’s editors were willing to give it as a story while surely realising it had so little substance. Smart spin meets eager-to-please media, you might say, and I’ll award this week’s prize in the latter category to Bloomberg for ‘Labour considers business veterans for roles in UK government’ – offering another rather tentative selection of minor figures. As the name game goes on, perhaps I’ll even find myself listed under ‘Labour mulls veteran columnists for House of Lords’.
Quality escape
Boeing – once a global standard-bearer of American corporate power and still the US’s largest single exporter – is fast becoming a business school case-study in brand destruction. Following the in-flight door blow-out on an Alaska Airlines Boeing 737 Max in January, the Federal Aviation Authority has placed inspectors on the assembly lines, ordered a cap on the number of Max aircraft being built and imposed weekly meetings to monitor progress towards a more robust safety regime.
Chief executive Dave Calhoun is on his way out by the end of the year, having stepped into the hot seat (he was previously Boeing’s chairman) only four years ago when his predecessor Denis Muilenberg departed in the aftermath of two 737 Max crashes that resulted in 346 deaths.
The US National Transportation Safety Board’s initial finding was that the Alaska Airlines plane was delivered from the factory missing four vital bolts that should have held the door in place. Other Boeing watchers such as Sir Tim Clark, a doyen of the sector as president of Emirates airline, believe that for a decade or more before that episode, the company had prioritised profit and cost control over product excellence: ‘Finance is not difficult,’ Clark told the Telegraph. ‘Engineering is.’
What next? If ever there’s a company that’s too big to fail, it must be Boeing. But its next chief faces a formidable competitive challenge from Airbus and a reputational rebuild right down to the bolts. Calhoun’s euphemism for the door blow-out was a ‘quality escape’. That’s exactly what’s happened to the once-mighty Boeing brand: every corporation with laurels to rest on should learn from the cautionary tale.
Tourists, go home
Anti-tourism: what’s that about? From the Canaries and the Costa del Sol to Venice, Amsterdam and faraway Kyoto and Hawaii, local folks have been protesting against foreign holidaymakers. In some places, residents justifiably feel the charm and historic fabric of their home places are being ruined by crowds far beyond reasonable capacity. In beach resorts developed from bare coastline to become mass-tourist cheap-booze-and-sunburn destinations, low-paid indigenous workers are moved to graffiti ‘A tu puta casa’
(very rude Spanish for ‘Go home’).
The upsurge reflects a spectrum of sentiment from serious environmental concern to the populist xenophobia that’s become rampant everywhere, combined with a bitter belief that prosperity only ever flows, in tourism and other sectors, towards the proprietor class and their government cronies. Add to that, in many parts of Europe, a special contempt for British lager louts and hen parties. It’s a deeply negative development for regional economies that pivoted to hospitality as other industries died.
Let’s hope it’s a copycat fad for one summer only; but I fear not. These gloomy thoughts came to mind as I read of anti-tourist protests in Majorca while sitting outside the Ecureil Café in the lovely bastide town of Monpazier (Dordogne), watching English and Dutch tourists – a thin, well-behaved crowd on this occasion – pick over a rain-soaked brocante market. I had just bought, on a whim, a terracotta bust of Charles de Gaulle; he’s staring balefully at me as I write, wondering why the world his cohort saved has sunk into such resentment and dysfunction.
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