The weekend’s Scunthorpe drama was a distraction from endless chatter about Donald Trump and his tariffs. Perhaps Downing Street’s spinners stage-managed it with that in mind. Or perhaps the heroic tale of shop stewards confronting villainous Chinese managers while rescue teams scoured the horizon for emergency shipments of iron ore and coking coal was a different kind of smokescreen – to hide the fact that British steelmaking has been doomed for decades and what just happened is a job-saving nationalisation that will be a massive drain on public funds for as long as it takes to admit that the last British blast furnaces belong to history.
I’m sorry to take such a downbeat view. But look at the history of the Scunthorpe ‘long products’ plant since Corus – the defensive merger of privatised British Steel with the Dutch firm Hoogovens – was sold in 2007 to Tata of India, probably the UK’s most committed inward investor. Even Tata could not make the operation viable against global headwinds; it was offloaded to Greybull, an obscure private-equity shop which passed the parcel again in 2019, for a knockdown £50 million, to Jingye of China.
Was Jingye’s owner, former Communist party official Li Ganpo, excited about orders from UK infrastructure projects, despite the soaring energy costs that made his new asset so uncompetitive? Or was he, as I wrote at the time, simply planting a flag ‘to remind us of China’s industrial might’? And has he now been ordered to withdraw as a different show of Beijing’s merciless potency? That’s for another episode, but Scunthorpe’s cold denouement can only be a matter of time.
No Chevvies
‘They don’t take our cars [but] we take every-thing from them… millions of cars’ is a Trump less-than-half-truth lobbed at the EU rather than the UK. But it applies here too – last year we shipped 100,000 vehicles their way, Jaguar Land Rover and Mini to the fore, while they sent us 18,000 largely non-US models assembled in US factories. And there’s a reason which has nothing to do with what the President calls a conspiracy of foreign scavengers to pillage, rape and rip off America. It’s simply that native US manufacturers build cars which (with the sole exception of Elon Musk’s Tesla, until his fall from grace) almost no one outside their country would be seen dead driving.
Among the 25 bestselling models in the US last year, two-thirds wore Japanese or Korean badges and none were British or European. A patriotic half-dozen from the likes of Chevrolet, Ford and Jeep, accounting for 2.4 million units, were giant pick-ups or laughingly labelled ‘mid-sized’ SUVs that would be key-scratched the moment they parked across double spaces anywhere in the Home Counties.
Even allowing for the demands of America’s geography, its auto industry (again, Tesla apart) is decades behind the rest of the world. But Trump’s unpaused 25 per cent tariff on imported cars will do nothing to encourage innovation or efficiency in US factories, while it pulverises our own automotive-based West Midlands economy. And however the trade war plays out, you and I are never going to be driving big fat gas–guzzling Chevvies to Waitrose.
Overpaid and over here
The knives are out for BP’s Norwegian-born chairman Helge Lund. At least two top shareholders, Legal & General and the Dutch institution Robeco, were preparing to vote against his re-election at the oil giant’s AGM this week, following the reversal of its commitment to multiply investment in renewables and shift away from fossil fuels. The activist investor Elliott Management has meanwhile called for BP to pull out of renewable generation altogether. And it would be fair to say that, for or against net-zero, BP holders are collectively cheesed off by the limpness of the shares, currently 25 per cent below where they were when Lund took office in 2019.
But there’s no need to feel sorry for this sometime wunderkind,who rose to fame at Norway’s state energy giant Statoil and was once tipped for political stardom in his home country. In 2014 Lund was lured to run BG Group, a spin-out from British Gas, with a pay offer so huge (reportedly ten times his Statoil salary) and so offensive to investors that a downturn in BG’s share price made it a softer target for takeover by Royal Dutch Shell a few weeks later. Pocketing a fat cheque for passing through, he moved on via the US oilfield operator Schlumberger to collect another £5 million or so for his part-time role at BP.
Now 62 and with a second job chairing Novo Nordisk, the Danish maker of the slimming drug Ozempic, he says he’ll leave BP ‘most likely during 2026’. If his exit accelerates, at least he can afford his own fjord.
Farewell to Alex
I’m sad to see the demise of the Alex strip cartoon, which made its last appearance, after 38 years, in the Daily Telegraph on 4 April. But as its authors Charles Peattie and Russell Taylor have said, in the investment banking milieu they chronicled with such satirical accuracy ‘in some ways it’s a badge of honour to have been fired several times over’. When he made his 1987 debut (in the London Daily News, a short-lived Maxwell title), Alex was a 25-year-old who boasted of ‘forty thousand a year and a new BMW’, though the authors swiftly realised that £40,000 wasn’t nearly enough for him. He survived into his almost-statesmanlike sixties by a combination of low cunning and smart reading of the financial zeitgeist. And he made us laugh, however dismal or turbulent the markets.
The Alex oeuvre will rank with the writings of David Kynaston, Philip Augar, my predecessor Christopher Fildes and, dare I say it, the occasional snippet from this column as an authentic record of City life in the post-Big Bang era. Farewell, Alex: go plant your vineyard.
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