Mobile phones are a “fifth wave” in the development of computers, according to Hermann Hauser, the veteran technology investor. When I visited him in Cambridge recently he said: “Mainframes were the first wave, mini computers were the second wave, work stations were the third wave and PCs were the fourth.”
Mr Hauser, kingpin of the “Silicon Fen” innovation scene for three decades, was making a point that applies more broadly than solely IT. New technologies devour old ones in waves, destroying established businesses but simultaneously creating new ones. Read more
Siemens is no longer in stormy seas. That at least is the message from the art in its chief executive’s office.
A gloomy picture of a stormy sea long hung in the German group’s headquarters. In his first interview as head of Siemens two years ago, Peter Löscher told me he wanted to banish the picture and replace it with work from his private collection. Subsequent visits to his office showed Europe’s largest engineering group still to be in the midst of rough weather (at least to lazy journalists in need of a metaphor). Read more
Dubai announced a restructuring proposal for troubled conglomerate Dubai World on Thursday, including a commitment to pump $9.5bn into the company and Nakheel, its development arm. Watch the Lex/Bloomberg video below. Read more
The number of German companies embroiled in serious bribery allegations continues to grow: we have had Volkswagen, then Siemens, MAN and now Daimler.
But the preponderance of heavyweight industrial names leads to one to wonder about why so many German companies have recently become caught up in corruption scandals. Put simply: are German businesses more corrupt than others? Read more
From the FT’s tech blog
How would you rather see the internet – strained through a filter or mangled by a censor?
With its attempt to score an end-run round the Chinese authorities today, Google is betting on the former. But Chinese officials, who are only now waking up to Google’s middle-of-the-night gambit, don’t sound so happy about the idea.
The Google calculation is straightforward. Redirecting all the search traffic from its local Google.cn site to Hong Kong, beyond the reach of the censors, then bouncing the results back into mainland China, has two benefits. Read more
By Richard McGregor, the FT’s former Beijing bureau chief
The long-running case involving the four executives of mining giant, Rio-Tinto, arrested in China last year reached a dramatic climax in Shanghai today. According to an Australian diplomat given access to the trial, the executives had made “admissions” about receiving bribes in the process of their jobs, which involved marketing iron ore from Rio’s mines in the state of Western Australia to Chinese steel mills.
Such admissions, of course, should be taken with a grain of salt. The lawyer who had been representing Stern Hu, the Chinese-born Australian Rio executive, did not appear in court. He was replaced by other, unnamed lawyers. The trial was “public”, according to the Chinese government, but the media and Hu’s family were not allowed in.
Demanding the US administration label China a currency manipulator is an old chestnut, and not one that improves with age.
One, the label is self-evident: by definition any non free-floating currency is “manipulated”. The more pertinent issue is whether the currency is under-valued; the answer to that – calculations of multilateral institutions and certain US think-tanks notwithstanding – is less clear-cut.
Two, Washington does not set Chinese monetary policy. If it did, it might pause to consider the wisdom of compelling its biggest creditor to inflate its currency. Since a 5 per cent appreciation would lop, say, $70bn off the value of its largely US dollar-denominated $2,400bn foreign exchange reserves, that might temper Beijing’s appetite for US Treasuries. And three, renminbi appreciation would make barely a whit of difference to US jobs or business. Read more
A bust-up between British Airways and trades unionists is a top business story in the UK this morning. What makes the dispute cat nip for news journalists is its political dimension. The ruling Labour Party and the opposition Tories are neck-and-neck in the polls as they head towards an anticipated May 6 general election. Looming strikes – and ministers’ responses to them – are therefore seen as potentially swaying voters.
An alliance of two losers?
That is too harsh a pronouncement on the news that Daimler and Renault are talking about a possible cross-shareholding. Nevertheless it does seem striking that the two European carmakers that probably performed worst in the recent crisis are talking about propping each other up. Read more
Good, clear analysis from author Michael Lewis on last night on 60 Minutes on how Wall Street is currently coining it, taking advantage of the largesse of government support for markets.
This is hardly new for FT readers but as always, but the writer of Liar’s Poker was in typically trenchant form on the banks: Read more
Quotas are always controversial. So Deutsche Telekom’s announcement on Monday that it is introducing a target to have 30 per cent of its top and middle management drawn from women by 2015 is likely to provoke a big debate.
But, quota or not, the German telecom group’s move makes far more sense than competing quotas in countries such as Norway.
That is because it focuses on executives, not non-executives. To recap, Norway has led the way with imposing a 40 per cent quota of female non-executive directors on its biggest companies. Read more
From the FTdotcomment blog:
For those baffled by all the talk of repos, accounting rules and hidden leverage, a quick round-up of those against whom the court-appointed Anton Valukas, “examiner” of Lehman Brothers, found that legal claims would have “sufficient credible evidence to support a finding by a trier of fact” – what he calls “colorable claims”. You can read the full 2,200 page report here.
At Lehman, thanks to the discovery of “repo 105″, used to hid borrowing and make levels of leverage look lower:
- Dick Fuld, chief executive
- Christopher O’Meara, former chief financial officer
- Erin Callan, former chief financial officer and until recently at Credit Suisse
- Ian Lowitt, chief financial officer
In the Hitchhiker’s Guide to the Universe series, the character Zaphod Beeblebrox wore a nifty pair of “Joo Janta 200 Super-Chromatic Peril Sensitive Sunglasses”, which had been specially designed to help people develop a relaxed attitude to danger. At the first hint of trouble they turned totally black, preventing the wearer from seeing anything that might alarm.
The UK pension industry now seems to want to adopt the accounting equivalent. The National Association of Pension Funds has called for an overhaul of accounting rules that govern the disclosure of company retirement liabilities, arguing that these are intellectually flawed and partly to blame for the widespread closure of schemes.
The move is hugely significant, not only for the UK but around the globe. The UK led the big revolution in pension fund accounting over the past 10 years to value assets and liabilities of a scheme at a snapshot of current market values. Read more
Carlos Slim Helu has snatched the title “World’s Richest Man” from Bill Gates in this year’s rankings of billionaires from Forbes. A jump in the value of the Mexican’s telecoms business America Movil helped put his net worth at $53.5bn, $500m ahead of the Microsoft founder.
The Forbes rankings makes compulsive if snoopy reading for those never likely to appear in them, as well as for some that already have. I once lunched with a couple of US billionaires who could not get over how much higher up the league table the guy at the next table was. Read more
Sooner or later the law of averages has to apply to how Goldman Sachs deals with its conflicts of interest. More than most of its peers, Goldman has embraced a world where the lines between client and competitor often seem to be blurred.
But controversies such as the flurry of criticism over its dealings with Greece expose a vulnerability of the model.
In the new Goldman world, where trading has become the dominant revenue force, a client can be advised by the bank on a deal or on a trade. But at other times, the same client could find Goldman’s private equity arm bidding against it for an asset or it could find itself on the losing side of a trade with the bank. Read more
EADS was meant to be the model European company. That long ago ceased to be the case, unless the model it was highlighting was a feeble, if not to say broken, one.
But the company still holds up a mirror to the continent and the flurry of news in recent days makes uncomfortable reading for European business. Read more
The Pru’s party line on financing for its $35bn Asian adventure is all you would expect from a salt of the earth UK corporate. The insurer will launch a wholly underwritten rights issue, complete with full pre-emption rights and decidedly sans any bells and whistles, for a deal that is indubitably going to complete. End of. Read more
Every car show needs a narrative and this year’s industry jamboree in Geneva looks like the time when the electric car came of age.
Some manufacturers such as Renault are still showing concept electric cars but the main message from chief executives in Geneva is that full-electric cars are no longer a pipe dream, but are coming to the market. Read more
Another putative auto alliance falls onto the scrap heap. Following on the heels of GM’s U-turn on the planned sale of its European unit Opel and the scotched disposal of Hummer to the Chinese, Peugeot of France and Japan’s Mitsubishi Motors (MMC) have called time on their planned tie-up.
Spare the tears. Auto alliances have a mixed track record; there have even been rumblings in the initially highly successful Franco-Japanese pairing of Renault and Nissan. It was never clear where the strategic advantages lay for Peugeot and Mitsubishi – other than the fact that the Japanese carmaker could use the cash. Yet the more likely share swap would not have brought even that benefit. Read more