Aston Martin Vanquish

BUSINESS WITH PERSONALITY ISSUE 1,735 WEDNESDAY 10 OCTOBER 2012 www.cityam.com FREE See Page XX WE REVIEW THE NEW ASTON MARTIN DEFENCE FIRM VANQUISH MEGA-MERGER MOTORING ON THE BRINK See Page 23 BY CATHY ADAMS THE £30bn mega-merger between BAE and GREEKS PROTEST AS MERKEL VISITS ATHENS EADS was on the brink of collapse last night, as EADS denied that talks between governments had broken down. Last-ditch meetings were taking place yesterday to thrash out the finals hurdles to the merger. European defence ministers, including defence secretary Philip Hammond, met in Brussels yesterday at a Nato summit where the deal was on the agenda. The boards of BAE and EADS met separately last night, while BAE chief Ian King spoke with EADS boss Tom Enders ahead of the looming deadline of 5pm today, set by the UK Takeover Panel. EADS was forced to deny German reports that the deal had collapsed yesterday after- noon and said that “progress” had been made between the UK and French governments. It is understood that negotiators for the two countries reached a breakthrough over state shareholdings, including capping future stakes in the merged firm. However, Germany is thought to remain opposed to these proposals. A source close to TENS of thousands of angry Greek protesters filled the streets of Athens yesterday, as German Chancellor the transaction said that Berlin is unhappy Angela Merkel visited the country for the first time since 2007. Police fired teargas and stun grenades to hold back crowds, as Prime Minister Antonis Samaras welcomed Merkel as a “friend” of Greece. Merkel L on several issues – including concerning gov- L ernment stakes in the enlarged firm and offered sympathy but no promise of further aid to the crisis-hit country. EUROZONE: Page 4 where it is headquartered – and could try to block the deal unless these are ironed out. opposed to the two countries owning a com- told City A.M. at the Conservative party con- The merger, which would create the bined 27 per cent. ference in Birmingham: “The longer this world’s largest defence and aerospace com- EADS’s Enders has previously said he wants drags out, the less likely the deal becomes. pany, hinges on whether the governments little state involvement in the new firm to The more we think about this, the more are prepared to limit their holdings in the ensure competitiveness. apparent are the problems and risks to the new defence group. France has been reluc- Multiple sources close to the transaction UK-US relationship if EADS takes over BAE.” tant to agree to a cap on its stake in EADS, said it was more than likely that today’s 5pm Shareholder resistance to the terms of the which could be as high as 13.5 per cent in deadline would be extended due to the polit- merger could also topple the deal. BAE’s the enlarged firm. Germany, while it does ical hurdles that still need to be overcome. largest shareholder Invesco, which holds not want to hold a government stake, wants Tory MP Bernard Jenkin, head of the Public 13.3 per cent of the British firm, said on parity with France, whereas Britain is Administration Select Committee, yesterday Monday that it opposed the tie-up. Cameron tells Tories there are painful decisions ahead BY JAMES WATERSON decisions, unless we show swim, do or decline,” he will The Prime Minister, who DAVID Cameron will today tell determination and tell delegates in Birmingham. celebrated his 46th birthday the Conservative party imagination, Britain may not “If we did what Labour yesterday, will also pay tribute conference that the country be in the future what it has want, and watered down our to the value of “hard work” must take “painful decisions” been in the past because the plans, the risk is that the instilled in him by his disabled to compete globally and that it truth is this: we are in a global people we borrow money from father as well as the is time to “do or decline”. race today. That means an would start to question our importance of strong families “Unless we act, unless we hour of reckoning for ability and resolve to pay off and public service. L take difficult, painful countries: it will be sink or our debts.” L ALLISTER HEATH: Page 2 Certified Distribution FTSE 100 n 5,510.25 -31.49 DOW L13,473.53 -110.12 NASDAQ n 3,065.02 -47.33 £/$ 1.60 unc £/€ 1.24 unc €/$ n 1.29 -0.01 30/07/12 til 26/08/12 is 128,484 WEDNESDAY 10 OCTOBER 2012 2 NEWS To contact the newsdesk email [email protected] Osborne should move fast and make Tucker next governor ORGET about speeches to the would make a far superior candidate ly – and probably less likely – to get it previous major bubble to have Tory party conference, or even than Turner, despite the Libor row. right than the average, less illustrious befallen the UK economy. Could it the forthcoming Autumn EDITOR’S Tucker has spent years talking to private sector forecaster. They are also just be that unwinding bubbles is FStatement. George Osborne’s market participants. He knows inti- horribly prone to fashion. As part of always painful, and that fiscal policy biggest decision of his entire mately and is comfortable with the its latest U-turn, the IMF is now flirt- is ultimately pretty powerless at chancellorship will be who he LETTER City, with markets and with real-life ing with an ultra-Keynesian view, preventing this? appoints to be the next governor of institutions and people. He is no arguing that every pound cut from As an excellent paper from Michael the Bank of England. No other detached academic. That doesn’t public spending would reduce GDP by Saunders of Citigroup points out, the unelected job in the UK comes with ALLISTER HEATH mean that he would be a soft touch – between £0.90 and £1.70 – up from IMF’s estimate of excessive output so much power: the governor is not he is an old style British central £0.50 previously. this time last year for 2007 was just just in charge of inflation but also, (Adair) Turner, the former boss of the banker, of the sort that wielded But why should we believe it? It has one per cent of GDP. This was already under the new system, of a large CBI and chairman of the FSA. It immense powers in the past. Osborne also now finally worked out that the a revision of its dangerously deluded chunk of financial regulation. The seems that the government has needs to stop wasting time and level of UK GDP was significantly view in 2007 that GDP that year newly re-empowered Bank will yield decided against revolutionary announce his appointment at the above its sustainable potential start- was in line with potential and there- massive influence over thousands of change; it won’t be appointing an earliest possible opportunity. ing in 1999, arguably the year in fore that there was no bubble and nominally private financial outsider or somebody with heterodox which the bubble therefore began, that all was well. It was an astonish- institutions and will be able to make views on how to manage the MISSING THE BUBBLE and continuing every year until 2008. ing failure. Remember: most econo- or break careers in a manner economy or finance, despite the now The tale of the IMF’s ever changing Excessive output peaked at 3.65 per mists get it wrong most of the time – unthinkable in any other industry. It undeniable fact that mainstream views shows how dangerous it is to cent of GDP in 2007 – by far the especially if they work for interna- is increasingly looking likely that the economists failed to understand rely on supposedly credible interna- biggest overheating in the G7 and tional bureaucracies. race to be the next governor will be what was really going on in the tional bodies when trying to obtain even exceeding the 3.1 per cent in between Paul Tucker, the long noughties. useful guidance on the economy. excessive production in 1989, at the [email protected] standing deputy governor, and Lord There is therefore no contest. Tucker These organisations are no more like- peak of the “Lawson boom”, the Follow me on Twitter: @allisterheath Alcoa is above Banking rules forecasts as US Boris slams PM on tax but relaxed by FSA reporting starts to boost loans BY JAMES TITCOMB denies designs on his job BY JAMES TITCOMB US ECONOMIC bellwether Alcoa BY JAMES WATERSON BANKING regulations have been beat Wall Street’s expectations last eased by the Financial Services night, although the country’s BORIS Johnson yesterday insisted Authority (FSA) in a drive to biggest aluminium producer cut that he would not attempt to encourage lending and stimulate forecasts for global demand due to become an MP before the end of his growth, with Britain’s financial China’s slowdown. mayoral term, despite once again institutions now needing less capital Alcoa’s earnings report, which is impressing Tory activists at the in reserve when loaning money to seen as a litmus test for the US party’s Birmingham conference. businesses. economy and kicks off the third- The Mayor of London told the The FSA said yesterday it had quarter results season, saw BBC’s Daily Politics that a return to been relaxing requirements over turnover for the three-month parliament before May 2016 was the last few months to “provide period to October of $5.8bn “not going to happen” and said that them with resources so that they (£3.6bn), beating forecasts of $5.5bn continued speculation over his lead- can lend as well as staying and sending shares up around 0.6 ership ambitions is “getting beyond resilient”.

Load more