Monthly Archives: September 2011

Andrew Hill

Ensuring energy security; fighting poverty; the future of the US dollar; the future of cities; why leaders turn a blind eye; and why they build bad strategies.

These are the contrasting themes of the six books battling to win this year’s Financial Times and Goldman Sachs Business Book of the Year Award – a shortlist that is low on “crisis”  books compared with prior years. The finalists are:

Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty by Abhijit V. Banerjee and Esther Duflo (Perseus Books, Public Affairs, USA)

Exorbitant Privilege: The Rise and Fall of the Dollar by Barry Eichengreen (Oxford University Press, UK)

Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier and Happier by Edward L. Glaeser (The Penguin Press, USA; Macmillan, UK)

Wilful Blindness: Why We Ignore the Obvious at Our Peril by Margaret Heffernan (Walker & Co, USA; Simon & Schuster, UK)

Good Strategy, Bad Strategy: The Difference and Why It Matters by Richard Rumelt (Crown Business, USA; Profile, UK)

The Quest: Energy, Security, and the Remaking of the Modern World by Daniel Yergin (The Penguin Press, USA; Allen Lane, UK)

 

For a man running a small business, Michael Arrington has attracted a lot of attention in the past couple of weeks. By the time he agreed to leave AOL this week, he had stirred up a maelstrom across Silicon Valley and the digital media.

John Gapper

Warren Buffett

Warren Buffett in July 2011. Image by Getty.

Today’s story about Warren Buffett hiring the hedge fund manager who paid more than $5m to have two lunches with him in Omaha, Nebraska does nothing to diminish my questions about corporate governance at Berkshire Hathaway.

At any other company, the fact that Ted Weschler, the hedge fund manager in question, paid for access to the chief executive and was hired as a result would be unthinkable. Yet Mr Buffett and his partner Charlie Munger appear to run the top echelon of Berkshire more or less as they wish. 

Andrew Hill

Consider how many BHAGs you have achieved over your career. “Big hairy audacious goal” is the memorable (if faintly bizarre) phrase coined by Jim Collins and Jerry Porras 15 years ago for a visionary strategic objective that can inspire a whole team.

John Gapper

Arvind Subramanian’s piece in the FT arguing that the renminbi could become the world’s reserve currency within a decade strikes a chord since I spent the past couple of weeks in Hong Kong and China.

Rather like Mandarin is already rivalling Cantonese as a language in Guangdong province, Hong Kong residents are increasingly keen to hold savings in renminbi over Hong Kong dollars, given the latter’s peg to the US dollar. 

Good morning and welcome to our rolling coverage of the long-awaited report from Sir John Vickers on UK banking reform.

You can find the text of the official report at the Vickers site.

Megan Murphy (MM), the FT’s investment banking correspondent, will guide us through the report.

12:00, MM: Sir John Vickers is calling a wrap on the press conference now, on the dot of midday.

A very interesting 90 minutes, with a strong defence of the commission’s work and what it is trying to achieve not only from Sir John, but most notably from the FT’s Martin Wolf and Bill Winters, the former co-head of investment banking at JPMorgan.

The banking industry may be taken aback by the tone of some of their commentary, as well as their conviction that ring-fencing is the best solution for removing the implicit taxpayer subsidy of universal groups, regardless of the direction taken by regulators/governments in other countries. That concludes the live blog for now, but we’ll be keeping an eye on developments and will post again later on anything new. 

Andrew Hill

It’s a cruel coincidence that the latest death knell for Saab comes within days of the latest extension of car guy Bob Lutz’s lease on life.

On Thursday, a Swedish court rejected the carmaker’s attempt to seek protection from its creditors, pushing a decision on potential insolvency into the hands of suppliers and employees awaiting payment for materials and labour. Saab is appealing, but the obituaries for the group – now selling well under 100,000 units annually – are already being written. 

John Gapper

Having spent the past couple of weeks in Hong Kong and the Pearl River Delta, I found the obituaries for Keith Tantlinger, the engineering brain behind the shipping container, poignant.

I took a stroll along the Pearl River in Guangzhou on Wednesday, nearby the ports from which vast amounts of electronics and textiles are shipped via containers to the rest of the world. It was a reminder of how much Mr Tantlinger’s little-known invention in the mid-1950s revolutionised the transport industry.

As recorded in Marc Levinson’s book The Box, Mr Tantlinger was asked by his boss, the maverick entrepreneur Malcolm McLean, to make practical the idea of storing goods in box containers rather than in break-bulk ships which had to be loaded and unloaded at each port. 

Li Feifei, a 19-year-old migrant factory worker from China’s Hubei province, dreams of becoming a clothes designer.

Ms Li, to whom I spoke this week at Fuji Xerox’s plant in the Longhua district of Shenzhen, got the idea of attending a fashion college and changing jobs from watching television. “When I saw beautiful girls in dramas, I thought of them wearing clothes I made and designed,” she says.

Andrew Hill

It’s little surprise that Spain’s industry minister should emphasise the Spanishness of Telefónica. On Tuesday, Miguel Sebastián said the important point to take from the telecoms group’s radical reorganisation was that its headquarters would stay in Spain. So far, so predictable.

What’s more extraordinary is how calmly Spanish politicians seem to be handling news that the national champion is, in the FT’s words, “to axe its Spanish division as a standalone business”. Mr Sebastián actually went on to point out that the fact that Telefónica’s newly created digital division would be based in London was a sign that the telecoms group is ever more global. 

John Gapper

Carol Bartz

Carol Bartz in February 2011. Image by Getty.

“Nothing in his life became him like the leaving it,” Malcolm observes of the executed Thane of Cawdor in Macbeth and the same could be said of Carol Bartz, the abruptly dismissed chief executive of Yahoo

John Gapper

Who would not want Brunello Cucinelli to succeed in his quest to produce luxury cashmere sweaters in the Umbrian hills while paying his local workforce a premium wage and offering them a three-course daily lunch?

Rachel Sanderson’s interview with Italy’s “King of Cashmere” is a great insight into how one manufacturer is trying to preserve artisinal traditions rather than outsourcing the production of his eponymous knitwear to China or Bangladesh.

It will be encouraging if he can continue with his idyllic-sounding approach to design and manufacturing – helped by the fact that he can sell the resulting products to investment bankers and others for luxury prices – while listing a third of his company on the Milan stock exchange

One of the founding principles of the web – not only the technology but the culture that has grown up with it – is that, as the New Yorker cartoon once put it: “On the internet, nobody knows you’re a dog.”