tv Business Briefing BBC News March 1, 2019 5:30am-5:46am GMT
this is the business briefing. i'm ben bland. financial re—charge. tesla pulls the plug on most of its stores around the world and says it will only sell cars online to help pay for a cheaper model 3. plus: not—so—open skies. france and the netherlands face off over the future of air france—klm. and on the markets: asian shares rise despite a weaker finish on wall street. they are being driven by a rally in chinese markets, strong us economic data helping the dollar higher.
we start with electric car—maker tesla. it has announced it will start selling its entry level model 3 forjust $35,000, finally delivering on a promise the firm made more than two years ago. analysts see the lower price point as being vital if tesla is to become a mainstream car manufacturer. but, in order to make it happen, tesla is being forced to make tough decisions about other parts of the business. that means shutting down almost all its stores around the world and moving to online—only sales, as dave lee reports from san francisco. the model 3 in march 2016, he promised it would make tesla mainstream car maker. it has taken time and have been hiccups along the way but finally the price is here. the $35,000 tesla which is considered affordable in the world of electric vehicles. in order for
tesla to be able to afford to make it they have to make some big changes to their business. they said they will close most of their 200 or so they will close most of their 200 or so retail stores around the world and that means laying off many of those retail staff. a few locations would remain open they said but they wouldn't say how many and it is only going to be the most well performing locations that survived the cut. the company also said that it didn't expect to turn a profit this quarter which is what it had said it had planned to do to investors recently which worried investors, setting stock down in after—hours trading, but long—term to $35,000 tesla should give investors something to be happy about, all elon musk has to do is build enough of them, keep the cost down, but not let standards slip. to paris now, where the french and dutch finance ministers will hold what could be a pretty tense meeting in the next few hours. they are trying to diffuse a growing row over this,
air france—klm. the group formed in 2003 when france's national airline took over its struggling dutch rival. on tuesday the dutch government revealed it had been stealthily buying up shares in the company, taking its holdings to 14%. that puts it almost on a par with the other top shareholder, the french government, which owns 14.3%. the dutch want more say in how the group is run, especially since klm is much more profitable than air france. and to protect klm's autonomy, specifically keeping key routes at schipol airport in amsterdam. but the french say the management should be left to run the company without any interference from politicians. they also point to the damage to investor confidence. shares slumped almost 12% on wednesday after the dutch scheme was revealed and continued to fall yesterday. here's what finance minister bruno le maire told a french tv
show on thursday. translation: i think it is our responsibility not to maintain this stand—off, which today it is dragging air france—klm down, which is making the group fragile. it is to get out of it as quickly as possible, from the very top, by finding the best possible ways of corporation between air france and klm to thrive and to answer benevolent‘s concerns, which i can understand, and which we have been working on for weeks in a spirit of openness. it a shame that front‘s spirit of openness gets a surprise attack as a response. john grant is an aviation industry adviser at 0ag. welcome to the business briefing, good to have you. how do they resolve this? perhaps air france becoming businesslike and profitable. this goes back to a very
different sort of cottle fit between the dutch, who are very pragmatic, have accepted numerous changes to working conditions in the last 15 yea rs, working conditions in the last 15 years, and air france, whose unions and labour force have years, and air france, whose unions and labourforce have been entrenched in retaining the status quo andi entrenched in retaining the status quo and i think klm and the dutch government feel that enough is enough. do you think this was always going to be inevitable that there would be these tensions between the two over this merger? oh, absolutely, but they are wedded together for ever now. they are in deeper alliances themselves because they are part of the alliance with people like delta airlines and china southern so they are inexplicably linked and they will be for ever. if you have been with klm and you are a klm employee and you've seen what's going on in air france and if you're the dutch government and you've seen air france start airlines and suspend them and close them within 18 months of launch you have seen a lot of money being wasted and you just want to protect your interest
as you go forward in that whole long—term business relationship. they have been building up their shareholding stealthily as it has been described, but now they have opened up about what they are doing — where do things go from here? where we see them to continue to build up the percentage of the joint company? i don't think so, i think it is an even share at the table of the discussions. there is another background to this which is that schiphol airport has a movement limits perannum, so schiphol airport has a movement limits per annum, so they can't actually expand more capacity and put more frequencies on at the moment until there is a new agreement reached with the government and with the environmentalists, so it is about posturing, but it is also about saying, enough is enough, we have seen this going on for a very long time, klm was nearly eight times more profitable than air france last year and it has been for nearly all 15 years of the business operation, you know, and it isjust seeing
15 years of the business operation, you know, and it is just seeing this money that they perceive as being wasted with a new ceo coming in at the group coming from air canada, they are just a bit cautious about where things go from here, you know. they have a very well—respected ceo who, rumour has it, was being with these contract not being renewed and that sent alarm bells ringing. ok, john, thank you for that. the us economy grew 2.6% in the last three months of 2018. that was much better than expected. some forecasts were as low as 1.8%, but it still represents a sharp slowdown from the growth rate seen earlier in the year. the effects of president trump's tax cuts are beginning to fade, and slowing growth could begin to be a political problem for him, as michelle fleury explains. frequent criticism on the campaign trail is plain —— in 2016 was 0bama failed to get yearly growth of 3% gdp so people were looking at how
donald trump was faring in 2018 depending on which measure you look at he either succeeded or failed at his target of 3% growth. the key ta keaway his target of 3% growth. the key takeaway from the report is that the tax cuts had a positive effect on the economy, but that the momentum seems to have shifted now in the economy towards slower growth as we go into 2019. let's go to asia now, and chinese telecoms giant huawei. it has launched a charm offensive in the united states, taking out a full—page advert in the wall streetjournal telling americans, "don't believe everything you hear." mariko 0i is following the story in singapore good to see you, mariko, so, huawei on the offensive. indeed, ben. the company has really been on the offensive, hasn't it? we have the exclusive interview with the company's exclusive interview with the compa ny‘s founder last week, exclusive interview with the company's founder last week, during which he denied all of the allegations from stealing technologies from foreign companies
to possibly spying on consumers, which is what some foreign governments have been accusing huawei of. and also he called the arrest of his daughter politically motivated. she is also the company's chief financial officer and today is the deadline for canada, which arrested her at the end of december at the request of the united states. today's deadline for canada to decide whether to go ahead with those extradition proceedings. many experts believe they will probably go ahead with it, but it could take months if not years full ball process to get completed. 0f months if not years full ball process to get completed. of course, it isa process to get completed. of course, it is a very politically sensitive issue that beijing has been pressuring canada to release her and whether or not they are linked with don't know, but there have been several canadian nationals being arrested, another canadian national has been given a death sentence for drug trafficking, so a lot of pressure on canada, miss meng is expected to appear in court next week as well. ok, mariko, thank you
very much. mariko 0i for us in singapore. now let's brief you on some other business stories. business insider is one of many discussing the news from tesla. more layoffs as the company shutters most of its retail stores research on cnbc says most americans live paycheck to paycheck. nearly 10% of those making $100,000 or more say they can't make ends meet. 0verall, most workers said they are in debt and many believe they always will be. 0n quartz, 15 uk companies have volunteered to report their ethnicity pay gaps, with the bank of england leading the way. and don't forget, let us know what you are spotting online. use #bbcthebriefing. that's it for the business briefing this hour. but, before we go, here are the markets. asian shares rallying, driven by
stocks in china, despite the lower close the previous day on wall street. up next: newsbriefing. see you soon. congestion and pollution is an issue for many major cities and local authorities are under pressure to address it. in london, the mayor, sadiq khan, is imposing the congestion charge on private hire drivers. but now a legal challenge says that amounts to discrimination. our legal correspondent clive coleman reports. how do you reduce traffic and improve air quality in our city centres ? improve air quality in our city centres? from the eighth of april the mayor of london, sadiq khan, will make private hire drivers like heidi pavey £11.50 daily congestion charge to drive in central london.
black caps will remain exempt. charge to drive in central london. black caps will remain exemptlj will black caps will remain exempt.” will be almost £60 less every week andi will be almost £60 less every week and i am being punished to come to work and i am being forced to pay for it. we are already poor, we already on the poverty line. 9496 of london's roughly 114,000 already on the poverty line. 9496 of london's roughly 114, 000 private london's roughly 114,000 private hire drivers are from black, asian and minority ethnic backgrounds and that has led to a legal challenge. the independent workers union of great britain which represents private hire drivers like those demonstrating here is seeking a judicial review of the mayor's decision on the basis that it is discriminatory and in breach of human rights. in a statement, the mayor's office said...
with cities like birmingham and manchester now looking at introducing congestion charges, this legal challenge could influence which groups of drivers can be forced to pay them. clive coleman, bbc news. for that story and more, breakfast is coming up at 6am withjon kay and naga munchetty. they'll have all the day's news, business and sport. this is the briefing from bbc news. the latest headlines: the us has offered a million dollar reward for the capture of 0sama bin laden‘s son, hamza. he's thought to be a key leader of the islamist militant group, al-qaeda. after days of escalating tensions over kashmir, pakistan is set to release a captured indian fighter pilot. two men have accused the pop star michaeljackson of sexually abusing them hundreds of times in the late 1980s and early 1990s.
now it's time to look at the stories making the headlines in media around the world. we begin with the gulf news and speculation that pakistan is about to free a captured indian pilot, as tensions over kashmir continue. meanwhile, looking at the japan times. it attempts to deconstruct why the talks between trump and kim broke down, and what happens next? let's move now to the new york times, which reflects on whether it would be wise of us democrats to push ahead with trying to impeach president trump, following michael cohen's testimony. the business pages of the daily telegraph lead on what they call a show of faith by investment heavyweights — poised to put a large amount of cash into uk assets. the front of the times highlights plans for an innovative new university, offering just one inter—disciplinary, gold standard course. and finally, a look at the guardian's website, which reflects on the value of art
as a caravaggio painting — that may be a fake — goes on sale for over $100 million. so let's begin. with me isjoel kibazo, partner atjk associates and a former director of communications at africa development bank. you and art fan? am. da paint yourself? not at all, i am not talented and that we stop right let's start with a gulf news and this escalation of tensions between india and pakistan we have seen this week, the worst we've seen for some decades. -- i am. -- do you. ithink what has happened is that in many ways, there have been so many other international crises going on that i think the spotlight had been taken off the tensions that there are between these two countries and of