Archive for the ‘Business’ Category

TEPCO leadership in disarray as share price drops to 47 year low and Government considers nationalisation

March 29, 2011

TEPCO staff along with SDF forces, police and firefighters at the Fukushima Dai-ichi nuclear plant are making heroic efforts to get the radiation leakages under control. But they are being let down by the leadership of TEPCO. And the performance of their President  Masataka Shimizu has particularly come in for much criticism.

The company’s stock price dropped 18 % today as shares reached their lowest level in 47 years. TEPCO has dropped to about 20% of the value it had a few weeks ago. The total liabilities that TEPCO may have to face are a long way ftom being known and could exceed $25 billion. As a corporation they could not survive and the Japanese government is considering the nationalisation of just the Fukushima Dai-ichi plant as well as the nationalisation of the entire company as possible options. In any event there is little chance of the current stock holders of TEPCO  ever getting any return or even of holding on to any significant value in their ownership.

BBC reports:

Speculation is growing that the Japanese government may start talks to nationalise Tokyo Electric Power, which owns the Fukushima nuclear plant.

The company has said it will need to raise about $25bn (£15.6bn) to shore up its finances. The talk of Tepco being nationalised has been fuelled by a statement from cabinet minister Koichiro Gemba to the Reuters news agency that a discussion about bailing out Tepco was possible.

But Chief Cabinet Secretary Yukio Edano said the government was not currently considering a nationalisation. “Although details cannot be seen such as how exactly the government is going to nationalise the company, as long as there are concerns that Tepco may be nationalised, investors don’t want to hold the stock,” said Hajime Nakajima of Cosmo Securities.

On Tuesday a flood of sell orders caused Tepco shares to stop being traded temporarily. A day earlier, the shares dropped to their lowest level in three decades.

Tepco shares have dropped to 566 Yen from a 52 week high of 2,500 Yen.

related: TEPCO was ready to give up and abdicate on 14th March

Essence of a Manager

February 11, 2011

My book now has a publication date in March 2011 and advance copies can be ordered from Springer.

It can also be obtained through Amazon (UK) and Bokus.

Springer Science+Business Media


Essence of a Manager

Pillai, Krishna, 1st Edition., 2011, XIV., Hardcover

ISBN: 978-3-642-17580-0

Due: March 2011

What makes a “good” manager? This is a book by a manager about managers but it is not just for managers. It is for anyone and for everyone who is interested in the way people – and not just managers – behave and function around the world. Based on actual experience the title “Essence of a Manager” is a succinct distillation of what this book is about. It is not a management manual and yet it is a map for navigation and a guide for behaviour which can be valuable for practicing managers at all levels. It formulates a sound thesis to describe the qualities needed in a “good” manager and builds up from elemental qualities to develop a holistic view of a good manager. Nine fundamental attributes are proposed as being necessary and sufficient to describe a “good” manager. It is applied management philosophy for a thinking manager and deals with the fundamental drivers which lie deeper than language or culture and which control human behaviour.

Amazon (UK)

Bokus.com

Some reviews can be found here: Reviews EOAM – Around the world and back to Finspång

Lars-Otto Gullman, retired, former Director Metallurgy, Gränges, Finspång

I wish I had read Essence of a Manager some 40 years ago, prior to my own industrial career!  A similar presentation of the demands on a manager and how a manager can develop his abilities I have not seen till now. In Essence of a Manager the author analyses the nature of the personal qualities a good manager must possess to be able to perform his tasks in a satisfactory way. A method, based upon interview technique, is presented as an effective means of identifying potentially good managers. Many examples are given from the author´s long and worldwide experience of managements styles in different countries and cultures.


Rolls Royce profits down 76% as Trent 900 costs start to kick in

February 10, 2011

BBC reports:

Manufacturing giant Rolls-Royce has said the mid-air failure of one of its Trent 900 engines on a Qantas superjumbo had led to costs of £56m. The explosion in the engine forced an emergency landing of the A380 in November last year. The one-off cost contributed to annual pre-tax profits dropping 76% to £702m in 2010 from £2.96bn. Foreign exchange costs and interest rate and fuel hedging contracts also contributed to the profit fall.

But the Derby-based company said that underlying pre-tax profits – which strip out one-off costs – were up by 4% to £955m in 2010 and were a better indication of its performance.

Rolls Royce say that the may face further “modest costs” but this seems to be far too optimistic considering that all the engine servicing costs have yet to show up and all the various compensation claims from Qantas, Airbus, Lufthansa, and Singapore Airline will take some time to work their way through. Once all the claims are presented there is an even chance that some will need arbitration before settlement which will take some time.

Jorn Madslien also writes:

Investors will be scrutinising Rolls-Royce’s financial figures to try to find out how the recent engine failure that led to the grounding of six Qantas Airbus A380 aircraft affected the company. ……..

….. The long-term effects of the engine failure, for instance a potential fall in new orders over the months and years ahead, cannot be measured at this stage. Consequently, the final impact on the company’s bottom line is not yet known.

It does not seem as if Rolls Royce have made any provision for further costs which is a little worrying and I stay with my estimate of around $300 million as the total hit that Rolls will have to swallow for the Trent 900 for the A380 in addition to any impact on engine sales.

Judging from the delays the development cost of the Trent 1000 for the Dreamliner is also likely to be significantly more than budgeted or expected.

It will be at least 2012 before the full financial impact is known though some residual impacts will continue for many years.

The wrecked engine after QF32 landed in Singapore in Nov. 2010:Photo: AFP


Surprise! Lockerbie bomber release orchestrated by Tony Blair’s gov’t in exchange for trade deals

February 1, 2011
Tony Blair

Tony Blair: Image via Wikipedia

Apparently Tony Blair and his government were more than mere US poodles. That Blair was an accomplished liar regarding his “sexed up” Iraq dossiers has become apparent. But that he had (has) little sense of ethics and could treat with the Devil for the sake of trade deals has always been suspected but is coming out clearly now.

British ministers secretly advised Libya on securing the successful early release of the Lockerbie bomber and demonstrate that Tony Blair’s Government was “playing false” over the issue.

If corruption is taken to be “having or showing a willingness to act dishonestly in return for money” it is not difficult to attach a label to Tony Blair and his government.

The Telegraph:

A Foreign Office minister sent Libyan officials detailed legal advice on how to use Abdelbaset al-Megrahi’s cancer diagnosis to ensure he was released from a Scottish prison on compassionate grounds, documents obtained by the Daily Telegraph show.

The Duke of York is also said to have played a behind-the-scenes role in encouraging the terrorist’s release.

The Scottish First Minister said the revelations confirm that while his administration acted according to its public pronouncements on the affair, Tony Blair’s Government was behaving duplicitously.

“The cables … show that the former UK Government were playing false on the issue, with a different public position from their private one,” said a statement released by Mr Salmond’s office.

Downing Street maintained at the time that is was not complicit in the release of al-Megrahi, and that the decision to free the convicted terrorist was taken by the Scottish Executive alone.

The Libyans closely followed the advice which led to the controversial release of Megrahi – who was convicted of the murder of 270 passengers on Pan Am Flight 103 – within months of the Foreign Office’s secret intervention.

According to American officials, Mr Blair was suspected of securing trade deals after agreeing to include Megrahi in the agreement.

After Megrahi was released in August 2009, another American document records Colonel Muammar Gaddafi’s comments – which suggest that Prince Andrew, the UK’s trade envoy, may have played a role. The document records: “He [Gaddafi] went on to thank his ‘friend Brown’, the British Prime Minister, his government, Queen Elizabeth, and Prince Andrew, who ‘against all odds encouraged this brave decision’. [Gaddafi] noted that the UK efforts would positively affect ‘exchange’ between the two countries.

Read more.


Carrefour and Walmart branded as cheats in China

January 31, 2011

Xinhua reports that Carrefour and Walmart have damaged their own reputations by trying to cheat Chinese consumers by overpricing. With the New Year to be celebrated on 3rd February, they are being seen as trying to exploit the traditional Chinese generosity during the festival holiday:

Carrefour and Walmart swindle Chinese consumers

Over the crowds of holiday shoppers in China’s big stores this Spring Festival lingers an atmosphere of suspicion. With charges of price deception hanging over the big chains of Carrefour and Wal-Mart and local authorities moving to levy fines, many Chinese — normally averse to be pinching pennies during the Lunar New Year — are checking their receipts at the tills.

The New Year, which falls on Feb. 3 this year, is normally a time of largesse and excess — all the more reason why many shoppers feel so betrayed. Customers can be seen recording label prices in notebooks or calculating their final bill on their mobile phones as they walk the aisles. At outlets of Carrefour and Wal-Mart in cities such as Beijing, Shanghai and Chengdu, the check out queues have grown as customers doublecheck prices at the tills.

“I would never have imagined global firms would do this intentionally and I have to be cautious,” said a woman surnamed Wang, after shopping at a foreign-owned supermarket in Chengdu, southwest China’s Sichuan Province.

From KamCity:

Carrefour and Walmart have issued public statements of apology to their customers in China, after local regulators found that several of their outlets were overcharging customers. The National Development and Reform Commission had found several instances of overpricing at 11 Carrefour and three Walmart outlets, on products including tea, underwear, and household products.

Carrefour said it “sincerely apologises” for the errors, and offered to refund customers five times the difference between the price charged and that on the label. Meanwhile, Walmart also expressed its “sincere apology” to those affected, adding that it has “launched self-examinations” and “will strengthen its price monitoring.”

The NDRC ordered local authorities to fine the individual outlets and confiscate their “illegal income”, with fines amounting to five times the amount confiscated, or up to 500,000 yuan if the amount cannot be calculated.

In the Chinese government’s battle against inflation, the Western retailers are building up a reputation for being a significant part of the problem.


Davos 2011 wraps up: Emerging markets generating the emerging buyers

January 30, 2011

Davos 2011 wraps up somewhat overshadowed by the ongoing revolution in Egypt.

Davos, home of the annual World Economic Forum meeting

Davos, home of the annual World Economic Forum meeting : image The Telegraph

 

But the WEF is turning out to be more than just a talking shop. This year there is no single dominating theme but a number of strong themes were apparent. The Euro is turning the corner, buyers from the emerging markets are on an acquisitions spree and bankers are being rehabilitated after they brought the world to its knees with their greed and profligacy.

There is a clear optimism but also a strong fear of being optimistic. Too many fingers have been burnt.

  1. Emerging market companies buy up the world
  2. Bankers regain power as Davos summit ends with a big fudge
  3. Davos summit leaves David Cameron and George Osborne feeling bruised
  4. Euro zone crisis seen turning corner
  5. At Davos, men outnumber women by over 5 to 1
  6. Sarkozy publicly slams JPMorgan chief at Davos forum

 

Somali piracy: How does it continue?

January 30, 2011
Bathymetric map of the Indian Ocean

Indian Ocean: Image via Wikipedia

Two contrasting stories about Somali piracy today which makes me wonder whether it continues because technology is not up to it or because of a lack of will or because of legalistic uncertainties on the high seas, or because of something else ?

The Indian Ocean is large and pirate craft are small and Somali war lords are greedy, but is it beyond the capability of all the world’s satellites to detect them and beyond the power of all the world’s navies to put a stop to this? Or are the reported ransoms of many millions being paid out far too readily and far too quickly by  the ship owner’s?

And where does the money trail really lead? And are there any insurance frauds also involved?

Something does not add up.

The Indian Express reports about the sinking of a pirate “mother ship”:

KOCHI: Giving a big blow to Somali pirates, Indian coastal security forces sink Prantalay, a  mother vessel used by the pirates, off the Laskhadweep coast. In a first-of-its-kind mission against pirates in the Indian waters, the Navy and the Coast Guard rescued around 20 fishermen from Thailand and Myanmar, the original crew of Prantalay.

The Coast Guard and the Navy, which had been keeping vigil against the pirates, had identified two skiffs off Lakshadweep coast on Friday morning. It was while responding to a call by MV CMA CGM Verdi, a Bahamas-flagged container ship on Friday morning, that a Coast Guard Dornier aircraft located two skiffs attempting an attack. Seeing the aircraft, the skiffs immediately gave up their piracy attempt and dashed towards the mother vessel Prantalay which hurriedly hoisted the two skiffs on board and set a westerly course to escape from the area. This action cleared all doubts of Prantalay being used by pirates as a mother vessel. While the Coast Guard and the Dorniers continuously tracked Prantalay, Indian Naval Ship Cankarso, a recently commissioned Water Jet Fast Attack Craft which had already been deployed in the area for anti-piracy patrol, was directed  to intercept Prantalay. Around 5 pm, INS Cankarso closed in on Prantalay and made all efforts  to establish communication on the international Mercantile Marine Band, but the vessel did not respond and continued to proceed westwards in its effort to escape.

In keeping with internationally accepted norms, Cankarso fired a warning shot well ahead of Prantalay to compel the ship to stop. Instead of stopping, Prantalay suddenly opened fire on INS Cankarso, which retaliated. Then, a fire broke out on Prantalay and crew were seen jumping overboard. In addition to the fishermen, 15 pirates were also apprehended. INS Cankarso was subsequently joined by INS Kalpeni and CGS Sankalp. Naval and Coast Guard ships and aircraft present in the area searching for any other fishermen/pirates.

And from Germany comes the story of of pirates capturing two ships and attacking a third:

Two sailors on a German ship have been found in a lifeboat after pirates took control of their vessel last weekend in the Indian Ocean. The pirates attacked the Bremen-based Beluga Nomination around 800 sea miles north of the Seychelles, prompting reaction from a Seychelles patrol boat and a Danish warship in the area.
The Seychelles patrol boat fired on the ship killing two pirates and two crew members, reported Der Spiegel on Saturday. Yet it was unable to gain control of the Beluga Nomination, and most of the surviving crew locked themselves into a safe room. At least two others jumped into the free-fall life boat and activated it, plunging into the sea. The day afterwards the Beluga Nomination stopped as the daily fuel ration was seemingly exhausted. A few hours later another captured ship, the York gas ship arrived, and the two ships were last seen heading towards Somalia.
The two men in the life boat were picked up by the Danish frigate and are said to be in as good a condition as could be expected under the circumstances. A Beluga shipping company spokeswoman confirmed that the fate of the rest of the crew remained unknown.
On Friday Somali pirates attacked another German ship, the New York Star tanker which belongs to the Hamburg firm Chemikalien Seetransport. It was attacked by pirates in a speedboat, a firm spokesman said on Saturday. The captain tried avoidance manoeuvres while the crew locked themselves in a safe room. The Dutch frigate De Ruyter came to its aid and soldiers boarded to check for pirates before giving the all-clear. New York Star will continue its journey from Saudi Arabia to Singapore with its load of naphtha.

DAVOS 2011 kicks-off today: 35 heads of state, 2500 delegates

January 26, 2011

http://www.weforum.org/

wef

35 heads of state and over 2,500 delegates are expected to attend.

If the WEF’s guidelines are followed there will be at least one woman for every four men!!

http://blogs.ft.com/rachmanblog/2011/01/davos-trying-to-solve-the-worlds-problems-in-four-days/

The WEF Chinese delegation will total over 60 people this year and the Indian will again be significant with 130 delegates. India will be launching an India Inclusive campaign to stress the benefits of economic progress and the growth of a vibrant middle-class and average incomes, while minimising the political impact of increasing disparities in wealth, as the new entrepreneurs of India globalise their operations – Tata, Ambanis, Mittals, Mahindra, Bhartis, Godrejs are all names we are becoming increasingly familiar with on a world stage. Chinese participation is up fivefold in the last decade, Indian up fourfold.
The G20 is very well represented too. All countries have president/prime minister or ministerial representation here except Argentina, with the latter’s central banker as its representative.

Once again: Qantas + RR engine + B747 = return to base

January 26, 2011

The Rolls Royce Engine Syndrome (RES) strikes again.

This time – one very thirsty engine

Qantas

Another drama ... A Qantas 747 was forced to return to Bangkok yesterday. image: http://www.news.com.au

Flight QF2 carrying 352 passengers was about 30 minutes into its flight from Bangkok International Airport when one of its engines began “consuming fuel more quickly than normal” a Qantas spokesman said.
It was forced to return to Bangkok where it landed safely about 7pm local time (11pm AEST). Affected passengers are expected to spend a second night in temporary accommodation with Qantas scrambling to send a replacement engine from Sydney for the troubled Boeing 747 today.
“As far as possible we will try and get passengers who need to return to Sydney urgently on other flights but that will be dependent on availability on other airlines,” the spokesman said.

“It was not actually an engine failure, (the pilots) did not shut the engine down they just reduced the thrust.” However one passenger on the flight says the engine “blew”.

The spokesman said there were no other replacement Qantas aircraft available in Bangkok.

Read more: http://www.news.com.au/travel/news/another-engine-problem-for-qantas/story-e6frfq80-1225994833407#ixzz1C7bLqCgl

Shocking! Study claims IKEA is confusing customers into submission!

January 24, 2011

Alan Penn is Professor of Architectural and Urban Computing at The Bartlett School of Graduate Studies, University College London, and Director of the VR Centre for the Built Environment. He has studied IKEA’s London store and draws the (un)remarkable conclusion that the layout has been cunningly designed – horror of horrors – to get customer’s to buy more.

Duh!!

(I hate that word but cannot find a better one)

The Scotsman reports:

IKEA Wembley store

Study claims Ikea’s ‘maze’ is selling ploy

Professor Alan Penn, director of the Virtual Reality Centre for the Built Environment at University College London, studied the Swedish firm’s north London store and came to the conclusion that their success, in part, is down to confusing their customers into submission by designing their stores like a maze.

Unlike John Lewis stores, which have a grid layout to create an open and accessible environment, Ikea stores require customers to enter and follow a path through the entire store to reach the exit.

“It is so well done and so cunningly done that I have little doubt that it is intentional,” said Penn, whose team has previously studied retail strategies and monitored how consumers respond.
In his study of the Ikea store in Brent, Penn found that the weaving yellow path quickly leaves customers disorientated. It only takes minutes before they have no idea where the exit lies, he found. Although all stores are required to include shortcuts for fire regulations, he said these were always positioned outside the customer’s normal field of vision.
Penn said the only comparable shopping environment he knew of was the Bazaar in Isfahan, a medieval Iranian marketplace. “The way to the exit is always behind you,” he said.

Obviously  John Lewis and other proper UK stores would not stoop to such despicable tactics ! In the words of one of the comments to this article:

I do think it is important for customers to stand up to the evil nordic fascist monsters who run Ikea.

Footnote from the Wall Street Journal:

Swedish furniture giant IKEA, the world’s No. 1 furniture retailer by sales, said Friday it benefited from cash-strapped consumers trading down in a continued challenging economic climate, as it reported higher sales and net profit for fiscal 2010. The company, famous for its low-cost ready-to-assemble furniture, said net profit for the fiscal year to Aug. 31 rose 6.1% to EUR2.7 billion. Revenue rose 7.7% to EUR23.1 billion.

Prices were unchanged in fiscal 2010 although Ohlsson said the company has been able to reduce prices by 2.6% in the current fiscal year and sees the possibility of further prices cuts next fiscal year. IKEA’s improved supply chain is key to maintaining low prices while also bucking the trend of other retailers by boosting margins. Gross margin rose to 46.1% from 44.6% a year earlier.

I wonder who funded this study? A competitor to IKEA? or could it be IKEA?

IKEA is still a privately held company – so I won’t be buying shares after this study – but I would if I could.

Related: https://ktwop.wordpress.com/2010/08/28/the-ikea-phenomenon/