tv BBC Business Live BBC News January 25, 2017 8:30am-9:01am GMT
this is business live from bbc news with rachel home and sally bundock. as president trump tells car makers to build more vehicles in the usa, mexico tries to keep the border open for business. live from london, that's our top story on wednesday, 25th january. mexico's foreign and economy ministers head to washington, but will it be the realities of modern manufacturing that make the biggest difference? also in the programme, the lowdown on lego. it's one of the world's most successful toys, but with china rife with copycats, can the boss tell the difference? the european markets are open and they are up. investors are looking optimistic. we'll be getting the inside track
on private jets from the man fled madagascar‘s civil war as a child, but soared on to sell planes to the world's top business leaders. and, as always, we'd love to hear from you about any of the stories we're covering. just use the hashtag bbcbizlive. welcome to the programme. now mexico seems to be the most important foreign country when it comes to donald trump's in—tray, now that he is us president. and in a few hours‘ time, mexico's economy and foreign ministers are set to meet some of his top trade officials in washington as they try to keep border open for trade. and the mexicans appear to have conceeded that to do that. there will have to be changes to the nafta trade deal which also covers canada. n0w president trump is pushing to bring more manufacturing jobs back to the us.
he's already met with the heads of ford, general motors and fiat—chrysler, telling them they must make more of their cars in america. now the us is a key market for mexico. taking a look at this graph, you can see its exports to the us have surged since nafta came into force in 1994. mexico now sells more than $270 billion worth of goods to the us every year. now it's thought talks between mexico and the us will focus on so—called rules of origin, which limits the proportion of a product which comes from outside north america. now if limits were tightened, it could boost manufacturing in the region. but can this be achieved in production lines with incredibly complicated supply chains like the car industry? and what about tariffs? drjagjit singh srai is head of the centre for international manufacturing at the university of cambridge. good to see you this morning. good
morning. rachel outlining some of the key issues and there is a lot to discuss with regards to mexico and the united states. the car industry seems to be the centre of it all, doesn't it? most trade between both sides are within that industry? absolutely, manufacturing and the automotive sector are closely linked and mexico and the us are closely interlinked. you will probably know that automotive supply chains is not just where you assemble the car. that criss—crosses across borders. bits of car, components, cross over the border several times before the final car is finished. it is a really complicated process when you look at the supply chain. so how simple is it for president trump just to say, "right, tariffs are slapped on here. we want norjobs in
the us." it is a very complicated picture. firstly, we have automotive component manufacturers in the us supplying to mexican car assembly pla nts supplying to mexican car assembly plants and indeed, some reports say perhaps 30%, 40% of the cars coming into the us, from mexico, have that us component. so they can be very much impacted if mexican manufacturing facilities have to scale back due to the tariffs. manufacturing facilities have to scale back due to the tariffsm manufacturing facilities have to scale back due to the tariffs. if he is successful, president trump, in his aim, ie perhaps putting tariffs on, he has not said anything about that since he became president, i might add, but there are reports today in the new york times that there will be an executive order on there will be an executive order on the wall going on, the mexican currency is falling today on that speculation and he has talked to the car—makers yesterday. if he is successful, what will the impact be
for both mexico and the united states and consumers as well? well, ifi states and consumers as well? well, if i pick up mexico. the manufacturing facilities that have targeted the us market predominantly will have a significant trauma. they will have a significant trauma. they will have a significant trauma. they will have to scale back production. some of it may not be economical going forward. so i think that's a pretty serious situation for those plants. there will be other mexican pla nts plants. there will be other mexican plants however who have a global market agenda and mexico has free trade agreements with dozens of countries and they perhaps will be less impacted. going back to the us, those component manufacturers supplying those mexican factories may actually have a significant negative impact and if i wrap up with consumers, all these changes will increase the cost of doing business. the automotive sector
doesn't have margins that can accommodate those increased costs so we can look forward to prices going up. all right, thank you for your time this morning. of course, when we get any news out of the meetings going on today between mexico ministers and donald trump's team, we will fill you in. in other news: cisco systems says it has agreed to buy business software company apprnamics for about $3.7 billion. the deal is another push by cisco which is one of the world's biggest maker of computer networking hardware to expand its software capabilities. legacy technology players like cisco have been trying to shift their strategy to stay ahead of technology developments that could threaten their core businesses. shares in the japanese airbag maker takata surged 18% on wednesday after the troubled firm denied it would enter into a lengthy court mediated restructuring. the company shares reached the maximum daily increase after a week in which they lost more than half their value.
the company has been plagued by a massive global recall of its airbags which have seen it pay a $1 billion fine in the united states. rio tinto is selling most of its coal assets in australia to china—backed, yancoal. it's a deal worth up to $2.45 billion, and it is part of the mining giant's divestments designed to boost its bottom line. the agreement is subject to regulatory approval. when you talk japan, you talk economy and you think gloom, but today we have got good news. they posted their first annual trade surplus since the nuclear disaster. the first time which is great news
for the japanese economy. it is because of cheaper oil prices which brought down the import costs, but this news does come at a sensitive time because us president donald trump, he has been criticising japan about japan's trade advantage against his country. especially the car industry which makes up about 40% of japan's exports. mr car industry which makes up about 40% ofjapan‘s exports. mr trump car industry which makes up about 40% of japan's exports. mr trump has been accusing tokyo of putting up non tariff barriers to american companies which japanese officials have been denying and saying, "look atjobs and investments that japanese companies have created in the united states. " japanese companies have created in the united states." but it is an uncomfortable reminder of a trade war the two countries had decades ago. thank you very much for your time. japan's nikkei up. theirfirst trade
surplus in six years. the dowjones not doing too badly. we will be quizzing tom stephenson and why they're doing well in a moment. europe, the markets have been open 40 minutes. 2017 really, it is all about delivery. we saw the market rallies after trump's election. the markets are waiting to see if he will follow through in his campaign promises how brexit will be delivered, but companies continue to report their results. samira hussain has the details about what's out on wall street today. lots of earnings to talk about today. at&t will be reporting. it is on the verge of closing its deal to acquire time warnerfor on the verge of closing its deal to acquire time warner for $85 billion, but the us president, donald trump's opposition and regulatory approval poses a threat to the deal. we can expect that investors will be asking about updates. boeing will also be
reporting earnings. you will remember the company got some attention from the then president—elect donald trump criticising the high cost of replacing air force one, that's the plane used by american presidents. and finally, we'll be hearing from e—commerce site, ebay. it attracted more shoppers in the holiday season. ebay has revamped its platform to offer for ebay has revamped its platform to offerfor products ebay has revamped its platform to offer for products and new brands, all in the hopes of attracting shoppers away from its rival, amazon. samira there. joining us is tom stevenson who is investment director at fidelity worldwide investments. so give us your take on what's going on, the nasdaq hitting record closes again on tuesday. loads of earnings coming out. samira just rattled through some of today's news. your
thoughts? the markets have been strong since the american election. it has been on hope for next year. 2017 is going to be the year when donald trump delivers or doesn't deliver and that's what markets are looking at out for now and that's why really they've paused for breath 110w. why really they've paused for breath now. they've paused for breath at a new high. the earnings have been fairly good as well on the whole, haven't they? that's helped too? the earnings have been 0k, haven't they? that's helped too? the earnings have been ok, but they have to be pretty good because the us market is one of the most highly valued markets in the world. it's more expensive than most other markets so unless earnings come through then i think there is a bit of scope for delivery. so this earnings season of scope for delivery. so this earnings season is really important. now, let's talk about japan. we saw there from mariko, the nikkei is up, what's going on there? yes. so,
japan has had two impacts really. 0ne japan has had two impacts really. one has been oil. the cheaper oil has really helped because ever since fukushima it has really helped because ever since fu kushima it has has really helped because ever since fukushima it has been importing oil, but the exports particularly to the us. this is pertinent given what donald trump has been saying about the motor industry. so i thinkjapan has been off investors radars for a long time. i think this is good news. it's good news for the market because the japanese market is not that expensive. so if we get more of this good news and if the dollar strengthens and the yen weakens it could be a good outlook for the japanese market. all right. fingers crossed for them. tom will be back in five minutes. more work to do on this show for tom! still to come, from civil war to civil aviation, we'll meet the man whose incredible rise means he now sells private planes to some of the world's richest people. you're with business live from bbc news. women are experiencing widespread discrimination when it comes to dress codes at work,
according to a parliamentary report. mps heard from hundreds of women who have reported that the dress codes they were subject to were sexist. they began an inquiry after a receptionist was sent home for refusing to wear high heels. here's our business correspondent emma simpson. what to wear at work? sometimes there's no choice and it's not always attractive. but what about being ordered to wear high heels? when nicola thorp arrived for her first day at work, she was told by her employment agency she must wear shoes with a two to four inch heel. when she refused, she was sent home without pay. what they state is it gives them a more professional look. a corporate, professional look. now i'm not entirely sure why adding two or four inches to my height makes me more professional or makes me walk in a professional manner. i don't think it affects how i come across. you can see me now, this is exactly what i would be wearing and if it's just a matter of a couple of inches, i can stand tall without wearing heels.
she then started a petition which led to an inquiry by mps, who now want action from the government. we've come up with three recommendations. firstly, that the equalities act of 2010 obviously isn't quite addressing that bit. secondly, we want to raise awareness that wearing high heels or make—up may be a health and safety issue in the workplace. thirdly, we are going to hopefully if it doesn't work, then we will be taking people to court. there'll be tribunals. at this company, receptionists can wear what they like. in its evidence, the government said the existing law was clear, and that the dress code imposed on nicola was unlawful. but the mps are calling on the government to do more to make the law more effective in protecting employees from discrimination at work. lots of you have had lots to say.
that's on our website. also many other stories as well. tesco shares down 1% today in london. you may well remember the accountancy scandal in 2014. the financial times says the supermarket chain could be facing a second legal claim as a consequence of that. that is on the website. rio tinto doing well today in london. you're watching business live. our top story: as president trump tells carmakers to build more vehicles in the usa, mexican leaders head to washington as they try to keep the border open for business and concede that might mean altering the nafta free trade deal. a quick look at how the markets are faring. they are all higher for now. it has been quite a week this week. up and
down. today a combination of earnings and a good session in asia and the us helping. and now let's get the inside track on how the world's top business leaders get around. we're talking corporate jets and private planes. they can be the fastest way to get between back to back meetings in different countries. we do that all the time! but the market is difficult for some. jet inventory is rising, as manufacturers churn out hundreds ofjets a year. and once it has been bought, the value of a jet falls rapidly. but aircraft brokerjetcraft says that the resale market is still strong, with large, ultra long range aircraft particularly popular among business jet buyers. these types of large cabin jets can link nearly any two points on the globe. joining us now is jahid fazal—karim, co—owner and chairman of the board atjetcraft. good morning. good morning. before
we talk about your business and what it does right now, let's talk about your story. we have been explaining to viewers that ux —— escape civil war at the age of eight in madagascar. what happened next?|j will madagascar. what happened next?” will give you the short story because it could be quite long. in 1974, there was an uprising in madagascar. i am of indian origin. the local population were going after indians. my father decided to pack his bags and we just left. we left to the neighbouring island. we area left to the neighbouring island. we are a french citizens. we escaped a big uprising in madagascar. i left to go to school abroad. i love aviation, i love aeroplanes. that is
what brought me to what i did today. you were dead set on that as a career, weren't you? aged 18 you worked —— you moved to france and got on with your career, working in the big corporate sectorfor quite got on with your career, working in the big corporate sector for quite a while. and then this company, that isa while. and then this company, that is a big shift? yeah, it is a big shift. i worked for two big companies, airbus and bombardier. most of the people i worked with and for are still big friends. the owners of bombardier are still friends. at the age of 3081 was running sales and marketing at bombardier. i come from a family of entrepreneur to. i had to do something. i was at a crossroads, of going down the corporate path or going down the corporate path or going on my own. it was the right time for me to leave. i quit myjob and left. quite a big risk? yeah, it
was. but if you are an entrepreneur, you don't think about risk, you think about reward. it is the way you are required. for me, it was about trying to set up a business, looking for gaps in the industry. you obviously found this gap. who are your clients? what soda prices are your clients? what soda prices are they paying for these planes? my clients are from everywhere. that is what makes my company unique when you compare what makes my company unique when you com pa re jetcraft what makes my company unique when you compare jetcraft to others who do what we do. the world is global now. our clients are global. they are from everywhere. they are diverse. they can be big corporations, they can be high—end individuals, rich people who inherited a fortune. you have to cater for inherited a fortune. you have to caterfor all inherited a fortune. you have to cater for all these people. they inherited a fortune. you have to caterfor all these people. they are all around the world. we sell in africa, asia, latin america, the us. i had to create a structure that would cater for all these people. i had to create a structure that would caterfor all these people. if you are a chinese person and you
wa nt to you are a chinese person and you want to buy a private jet, you are a chinese person and you want to buy a privatejet, you you are a chinese person and you want to buy a private jet, you want to talk to somebody who speaks your language. we established the structure. 5096 of sales in the us. after that it is europe and asia. are you a business that is not affected by the global economy? it costs millions to buy one of these. the super—rich are not affected by a global slowdown. 0r the super—rich are not affected by a global slowdown. or are you really impacted when the global economy heads south? you are impacted. you have to be impacted. 0ur heads south? you are impacted. you have to be impacted. our business is well correlated with global economy. if you feel confident and you know that business is doing well and you have a good future outlook, you make investments. with billionaire donald trump in office, is that good for you? for our business, trump is not bad. everybody has their political
views. as a business, he is a republican, you will reduce taxes. he will make the rich richer. and fortu nately for he will make the rich richer. and fortunately for us, these are our clients. corporations will get wealthier in the us. we will sell more planes. thank you for coming in. it has been fascinating. they are tiny little figures that have made a danish toy firm iconic across the world, but could you tell the difference between a real lego figure and a copy cat? it's a question we asked the man in charge of making them at lego's huge new factory in china. have a little look at that for me. what do you think of that? have a little look at that for me. what do you think of that7m have a little look at that for me. what do you think of that? it looks like a what do you think of that? it looks likea mini figure what do you think of that? it looks like a mini figure to me. what do you think of him? two men? which one is yours? have a guess.” you think of him? two men? which one is yours? have a guess. i would say this is lego. this is not. ok, this
is lego. it is not real. it is trying to be lego. that is my assessment of it. it has a branding similarto assessment of it. it has a branding similar to yours. tom is back. i do feel really sorry. i feel like we put him in a tom is back. i do feel really sorry. ifeel like we put him in a corner. i think you did, yes! it's very difficult. now the whole world has seen difficult. now the whole world has seen that. let's talk about the stories in the papers. dubai airport records 83.6 million passengers last year. many more are going through dubai. it is a thoroughfare. that was 7% up on 2015. the forecast for this year is 89 million. that is a
similar growth rate. it is going from strength to strength. it is in the right place. it is at the crossroads of east west traffic, passenger traffic and cargo traffic. year about expansion in dubai and other places in the world, runways and airports being built. we are still grappling over a third runway, possibly at heathrow? yes, it is a com pletely possibly at heathrow? yes, it is a completely different mentality to building infrastructure. iwas completely different mentality to building infrastructure. i was in dubai a few months ago. driving down the road between dubai and abu dhabi, my driver said, the road between dubai and abu dhabi, my driversaid, this the road between dubai and abu dhabi, my driver said, this is the new airport. seven runways. they have a massive airport and they are building an even more massive airport. and here we are still agonising about a third runway at heathrow. let's talk about donald trump. he signed yet more executive orders yesterday. this is about oil pipelines. give us some background?
this is controversial. it is quite an insight into donald trump's thinking. it shows that he is much more interested about growing the economy than the environment, because these pipelines are extremely controversial. they run under native lands. there is a lot of controversy about building them. the second interesting aspect is that he said they will be only built if they use american steel in the pipeline. this is a real indication of what he means by putting america first. this story is in the washington post and many other papers. the guardian was noting that they would need 28,000 people to make this one pipeline work. but only 50 long—term jobs. the vast majority are very short—term jobs. it is 28,000 that donald trump out —— can say he has created in a
sense? absolutely. he is talking about building infrastructure, to allow the growth in the future. thank you for coming in. that is it from business life today. there will be more throughout the day. —— business live. see you tomorrow. hello there. huge contrast across the uk this morning. we have got mild and windy conditions in the north and west. it is cold and frosty across the south—east. not just cold and frosty, we have got some patches of freezing fog. poor visibility for some. slow on roads and on and airports. the worst of the fog in lincolnshire, east anglia, part of the midlands, the south—east. poor visibility. 0n anglia, part of the midlands, the south—east. poorvisibility. on top of that there is the risk of icy patches. further west, we should be
into some sunshine across the south—west of england, much of wales and a good part of northern england. a chilly start to the day. more cloud in scotland and northern ireland. a mild but windy start to the day and fairly cloudy. the winds will be blowing a guildwood the north and west of the uk. thicker cloud. trained by the afternoon. the fog in the south—east slow to clear. quite chilly. a swathe of sunshine in northern england, through wales and the south—west. top temperatures around about 11 degrees in the far north—west. some places will struggle to reach three or 4 degrees. this evening it is bright for the most part. patchy rain in the north—west. cloud amounts will increase from the south. it will be quite a cold night. despite cloud cover, there will be a touch of frost across england and wales. temperatures should hold up across scotla nd temperatures should hold up across scotland and northern ireland.
thursday is going to be a cold day. the wind coming in from the near continent. the wind will bring a significant wind—chill factor. it sta rts significant wind—chill factor. it starts off quite cloudy. a snow in some places. dry weather by the afternoon. spells of sunshine. it may get to four or 5 degrees on the face of it. significant wind—chill factor on thursday. friday is another cold and windy day, particularly in the north and east. cloud is likely to bring rain. as we move into the weekend, some showers. most of those will be on saturday. mainly for england and wales. sunshine on sunday. things turning less chilly. hello. it's wednesday. it's 9am. i'm victoria derbyshire. welcome to the programme. this morning, in an exclusive interview a mum who was at high risk of being murdered by her abusive ex—husband tells this programme
a social worker disclosed the location of her secret safe house twice. the woman was subjected to violent revenge attacks as a result. he said it was impossible to safeguard us and keep our address safeguard us and keep our address safe and he said losing your life is not worth seeking justice and he said ultimately that's going to happen. we'll bring you that full interview at 9.15am. also on the programme, "i swear to tell the post truth, the alternative truth and nothing like the truth" — that's how satirical magazine private eye mocks donald trump's inauguration as president. 0vernight there have been more clashes between trump's spokesman and the press over facts.