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The reputations of Indian outsourcers

January 13th, 2009 5:35pm

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.

Still, it would not take many further disclosures for the Satyam fraud to develop into broader questions about ethical standards in the Indian outsourcing industry.

In view of all this, I have accepted that invitation to the Wipro dinner hosted by Azim Premji, its chairman, in Davos later this month.  It promises to be interesting.

January 13th, 2009 5:35pm in Manufacturing | Permalink | Comment

It is just another risk for Buffett

November 26th, 2008 10:24pm

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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. Continue reading "It is just another risk for Buffett"

November 26th, 2008 10:24pm in Finance, Manufacturing | Permalink | Comment

A great American brand name for sale

May 16th, 2008 4:18pm

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.

Continue reading "A great American brand name for sale"

May 16th, 2008 4:18pm in Manufacturing | Permalink | Comment

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