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. Read more
The ill-tempered struggle in Washington over raising the federal debt limit is enough to make anyone gloomy about the future of the US. Clive Crook, my FT colleague, rightly contrasts the stasis among politicians with the “unrivalled energy and ambition” of US workers.
Old companies may die, but old stock market indices ought to live for ever. Certainly, the longevity of the FT30 index, first published in 1935, suggests they can go on and on, even if their relevance ebbs and flows.
In fact, there could be no better moment to revive interest in the original benchmark of British stocks. Read more
When a Rolls-Royce engine on a Qantas jet blew up last November, the engine-maker and the airline joined Toyota and BP in a list of companies fighting to repair damage to their global reputations.
But the Rolls-Qantas incident was of a different order and degree from the Toyota car recall and the BP Deepwater Horizon explosion. The settlement announced on Wednesday seems to reflect that. Read more
Sony’s launch of its first tablet devices is bound to excite unflattering comparisons with revolutionary Sony products of the past – particularly because it falls in the same week as the death of Norio Ohga, the Japanese company’s former chairman and chief executive.
As every retrospective of Ohga’s extraordinary life has pointed out, he was the Sony executive who helped establish and drive the compact disc. By contrast, Sony’s “S1″ and “S2″ (their temporary names, thank goodness), already seem doomed to be mere “iPad rivals”. Read more
Sir John Parker’s arrival as chairman of Anglo American in 2009 may well have changed the miner’s destiny. He steadied the ship, stood in the way of a potential bid from rival Xstrata, and threw his weight behind chief executive Cynthia Carroll, who was under intense pressure. All this looks like evidence of the Northern Irishman’s legendary toughness. Except Sir John himself says he’s not tough.
In my latest Turning Points interview, he describes himself rather differently – as a believer in discipline (learnt on the family farm where he was brought up) prepared to be tough only where necessary. Read more
Having worked in Milan in the mid-1990s, I have a soft spot for Italy’s imprenditori – the enterprising corporate leaders, often company founders, who make up the backbone of the industrial economy. They must be ashamed of the way their government is stirring up protectionist sentiment against French takeovers of Italian companies like Bulgari. Read more
When it comes to his annual letter to General Electric’s shareowners, Jeff Immelt is no Warren Buffett. Not for him the jokey anecdotes and fables preferred by the Omaha billionaire in his own yearly communication. But the GE letter is still worth a read, if only because of the industrial group’s status as a training ground for future chief executives of global companies. Read more
Stephen Elop of Nokia surely wins the Lucy Kellaway prize for blunt speaking in a corporate memo when he warns that the Finnish company has a “burning platform”.
There are lots of things to admire in the memo in terms of clarity and the willingness of the new chief executive to spell out publicly exactly how dire Nokia’s crisis has become: Read more
The wave of suicides at the vast plant near Shenzhen owned by Foxconn, the Taiwan contract manufacturer, where 300,000 workers are employed, raises questions about the sustainability of China’s use of migrant workers from rural areas.
The FT was allowed unusual access inside the Foxconn plant in Longhua, which has in the past been kept out of view of reporters, and Kathrin Hille’s video interviews with Foxconn employees, as well as the company’s spokesman, are fascinating. Read more
My FT column this week is on the BP oil rig disaster:
Once upon a time, BP stood for plain British Petroleum. Under John Browne, its former chief executive, it was Beyond Petroleum. These days, it is more like Blame the Past. Read more
Is manufacturing going the way of digital industries such as technology and media, where anyone with a good idea can distribute it cheaply around the world?
That is the latest notion popularised by Chris Anderson, editor-in-chief of Wired Magazine, who previously brought us The Long Tail and Free. Read more
Jeff Immelt’s speech last week at the West Point military academy last week was most notable for his criticism of the shift to “meanness and greed” in business leadership. As I noted last week, it expressed the frustration of many industrial companies at excesses on Wall Street.
But Mr Immelt also made broader arguments about the need for the US to turn away its reliance on consumer consumption and services in order to regain competitiveness: Read more
The attack by Jeff Immelt, General Electric’s chief executive, on “meanness and greed” among business leaders is an interesting straw in the wind.
His speech at West Point coincided with the decision by Alistair Darling, the UK chancellor of the exchequer, to levy a 50 per cent windfall tax on the bonus pools of banks operating in Britain. Read more
The disclosure that Wipro, the third biggest Indian outsourcing company, was banned from doing business with the World Bank for four years in June 2007, does not exactly improve confidence in the sector following the Satyam Computer Services scandal.
The ban was imposed because Wipro allegedly “provided improper benefits” to World Bank staff by offering some of them shares in its 2000 initial public offering. Wipro denies doing anything wrong and says it did little business with the World Bank anyway. Read more
My FT column this week is on the Sage of Omaha:
Michael Kinsley once defined a political gaffe as the moment “when a politician tells the truth” and is embarrassed by it. By that standard, Warren Buffett’s deal to write $35bn of put options on equity markets was a financial gaffe.
On the face of it, Mr Buffett’s gambit looks both unwise and uncharacteristic. Shares in Berkshire Hathaway, his holding company, tumbled last week (they have since recovered) because it is nursing a mark-to-market loss of about $5bn on the derivatives contracts.
In fact, a casual observer might question what Mr Buffett, who once condemned derivatives as “financial weapons of mass destruction”, was playing at when he bet that four equity indexes, including the Standard & Poor’s 500, would not be below their existing level in 2019 to 2027.
What price the General Electric name? Pretty high, I would suspect, and extremely tempting for an Asian manufacturer of washing machines and air conditioners that wants to build a global business.
GE confirmed this morning that it is “reviewing strategic options” for its consumer appliances division. I guess that, in this context, “reviewing strategic options” must mean “selling, but perhaps holding on to a little stake”.
Its reasoning is interesting because it tells you all you need to know about how Asian manufacturers now dominate the consumer appliance market. Here is part of Jeff Immelt’s statement:
It remains primarily a U.S. business, meaning its fortunes are tied to the rise and fall of a single market. We want to make this good business great again by finding the right strategic solution – a solution that will give Appliances the global reach and investment required to compete more effectively.
This is one of those statements that makes a great deal of sense looked at from one perspective, and no sense whatever looked at another way. Read more