Monthly Archives: July 2008

John Gapper

My fascination with global positioning devices has not abated but it seems that not everyone shares my naive enthusiasm.

Devoted readers of this blog will recall my childlike sense of wonder at renting a car in Los Angeles last year and being guided around the city with a GPS device. Of course, GPS was already old hat then for many car drivers, but there we are.

My latest experiment has been to buy a small GPS Bluetooth fob for about $50 that links with my Blackberry and the Google Maps software that I have downloaded to it. As a result, I can now see where I am: a little blue dot on the map marks the spot. Read more

John Gapper


My column in the FT this week is about cross-border mergers and whether they are really more risky than other kinds. It starts like this: Read more

John Gapper

You only find out who is swimming naked when the tide goes out, as they say, and the Detroit auto makers are providing an example.

They are now halting cheap leases that have enabled Americans who could not afford to buy an expensive pick-up truck or Sports Utility Vehicle to lease one instead. Banks no longer want to underwrite that business. Read more

John Gapper

So is 22 the number?

Merrill Lynch’s $6.7bn sale of a bunch of collateralised debt obligations for 22 cents on the dollar has been hailed as the long-awaited “capitulation trade” by various analysts. Read more

John Gapper

Even an irrepressible optimist sometimes get repressed. I feel a bit sad at the departure of Vern Raburn as chief executive of Eclipse, the very light jet maker that has not yet fulfilled his hopes of transforming air travel.

Mr Raburn has paid the price for the fact that it has proved much harder than he promised to built a cheap, snap-together small jet that would be used for air taxi services and bought as an alternative to small turbo-prop aircraft. Read more

John Gapper

Here is a suggestion for a statement that Apple could issue on Monday to end the speculation about Steve Jobs’ health:

There has been some concern about Steve Jobs’ state of health. Mr Jobs has had intestinal side-effects from his surgery for pancreatic cancer in 2004. Earlier this year, he had minor surgery relating to this condition and subsequently lost some weight. He is free from cancer and his condition is not life-threatening.

 Read more

John Gapper

So what will higher commodity prices and discontent among McDonald’s franchisees do to the Dollar Menu?

The question arose yesterday after McDonald’s disclosed its second quarter results and said it was considering changes to the Dollar Menu, which offers US customers items such as a double cheeseburger or a McChicken Sandwich for a dollar. Read more

John Gapper

I have reviewed a new book by Donald Keough, the former president of Coca-Cola, called The Ten Commandments of Business Failure in tomorrow’s FT.

Here are the first few paragraphs of the review: Read more

John Gapper


My FT column this week is about Roche’s offer to buy the stake in Genentech it does not already own. I believe it is taking risks with its reputation and the value that it has gained from Genentec. It starts as follows: Read more

John Gapper

Sadly, Apple is now stuck with a question that many people are asking, even if they feel awkward and guilty about doing so. Is Steve Jobs ill again?

The question has been around since Mr Jobs appeared at the iPhone 3G launch event in June looking very pale and gaunt, was put to Apple executives during Monday’s results conference call, and the reply did not help.

“Steve loves Apple, he serves as CEO at pleasure of Apple’s board and has no plans to leave. Steve’s health is a private matter,” said Peter Oppenheimer, Apple’s chief financial officer. That, combined with a downbeat earnings forecast, sent the company’s shares sharply lower.

Henry Blodget has retorted that Apple shareholders have a right to know whether Mr Jobs’ pancreatic cancer, for which he had surgery four years ago and seemed to have recovered, has recurred. Meanwhile, others retort that it is a private matter and we should not probe further.

With caveats, I think Mr Blodget is right. Mr Jobs’ health is clearly a material issue for Apple’s shareholders. Indeed, in many ways it is the most material issue of all. Apple’s fortunes have varied over the years according to whether Mr Jobs is in charge and he still embodies the brand. Read more

John Gapper

It is a bit hard to tell whether Carl Icahn or Jerry Yang has backed down the most in the settlement of the proxy fight between Mr Icahn and Yahoo. But I suspect it means that Microsoft will have to make a full bid for Yahoo if it wants to gain control of its search assets.

I think this is the right conclusion. I have written of my doubts about whether Mr Yang is an appropriate chief executive for Yahoo, it also seems to me that Yahoo should not cede control of search to Microsoft unless the latter offers a premium for control. Read more

John Gapper

I have written a column for the Weekend FT on the crackdown on short-selling on both sides of the Atlantic. I can see the point of trying to curb bear raids on fragile financial institutions but short-sellers generally provide a useful service. You can read it here and comment below.

John Gapper


As trailed, I have written my FT column this week on the F-22 fighter and whether it is worth the money. I conclude that the current US position – to buy a limited number and refuse to sell others to its allies – is militarily questionable and financially crazy. You can read it here and comment below. Read more

John Gapper

Overheard on the Farnborough to London train:

A group of American defence contractors talking about a contract that was delayed by a glitch. One executive, regretfully, as if it would be the last resort: “We may have to tell the Brits about it.” Read more

John Gapper

Well, that was a first for me. I don’t think I have attended a media briefing on an aircraft before, and certainly not a US Air Force one.

The aircraft in question was a C-130J Super Hercules – one of those big transport aircraft that you see often in war zones, or involved in relief efforts. This one had just returned from a tour in Iraq and has previously operated in Afghanistan.

The beast was on the ground at the Farnborough Air Show but that did not detract from the oddity of sitting on one of the red canvas seats lined along the sides of the aircraft to hear about the aircraft and its deployment.

The rear cargo door was open so, although we were in fact at zero altitude, it felt curiously as if we were about to be tipped out of the back in parachutes. Read more

John Gapper

Well, the star of the show was certainly the star of the show. In time-honoured tradition, I have just been standing on a balcony at the Farnborough air show, with plugs in my ears,  watching fighter aircraft doing manoevres.

This year’s Farnborough highlight was the F-22, the world’s best - and most expensive – fighter aircraft. It is a stealth fighter made by Lockheed Martin and Boeing, with Pratt and Whitney supplying the engines and the only air force that has them is the US one. Foreign governments are not allowed to buy them.

It does feel odd to be watching the beauty and balletic elegance of fighter jets at air shows, given that their mission in life is to destroy things. In the F-22′s case, it does not do much bombing of ground targets but could beat any other aircraft in a fight.

However, the F-22 is unquestionably stunning to watch. Its most surprising trait, for an aircraft that can travel at Mach 2 and launch missiles at supersonic speed, is that it can come to a virtual halt in the sky. Read more

John Gapper

The United Arab Emirates are becoming the go-too place for western, and particularly US companies, that need a bit of a boost amid financial turmoil.

I am at the Farnborough Air Show today and started my day listening to Scott Carson, the head of Boeing’s commercial aircraft division, making a brave case that his industry would prosper despite high oil prices, environmental pressures etc, delays to Boeing’s new 787 aircraft etc.

However, it was only at the end of the presentation when things definitively perked up. That was when Jim McNerney, Mr Carson’s boss, walked on stage at the media centre with Sheikh Ahmed bin Saeed Al-Maktoum, the son of the former Emir of Dubai, to announce an order for 50 of Boeing’s next-generation 737s. Read more

John Gapper


My FT column this week is about the battle for the control of Yahoo and why I do not think Jerry Yang is the right man to make it into a better company. You can read it here and comment below.

John Gapper

The housing downturn that started in the US now seems to be hitting the UK, where I am at the moment, with a vengeance. It makes me wonder what will happen to all those estate agency branches that throng so many high streets.

I suppose know the answer to that already. Fifteen years ago, I spent a lot of time covering the tribulations of the UK building societies that had bought estate agency chains in the housing expansion of the late 1980s and were lumbered in the early 1990s slump.

Abbey National, for example, sold the Cornerstone estate agency in 1993 for £8m, or £23,000 per branch, which was a tenth of the price it had paid to buy the chain six years earlier. Many other building societies also divested loss-making agencies. Read more

John Gapper

The FT story about Driss Ben-Brahim of Goldman Sachs leaving to join GLG Partners and run an emerging markets fund and other things says something about the balance of power between investment banks and hedge funds.

But what struck me as more intriguing is Mr Ben-Brahim’s nationality – he is half-Moroccan and half-Austrian and was brought up in France. He is thus a perfect example of the polyglot nature of the modern City of London. Read more