The world is changing fast and to keep up you need local knowledge with global context.
By Alec Hogg
In today’s global business headlines:
- Within three years European aircraft builder Airbus is to abandon its $16bn project which produces the A380, the world’s biggest plane. The decision follows a cut from 162 to 123 in the order placed by Dubai’s Emirates Airlines, which had been seen as a lifeline for the A380 when it was announced. Emirates has struggled to fill the giant aircraft’s 525 seats on many of its routes. The first A380 went into service with Singapore Airlines in 2007 and was Airbus’s challenge to the Boeing 747, which celebrates half a century in service this year.
- Amazon CEO Jeff Bezos’s February got even worse yesterday when his group buckled to political resistance and dropped plans to build a new HQ in New York City. Amazon selected Long Island after a beauty contest drew hundreds of contending cities. It says 70% of New Yorkers support having the company in the city. But it has withdrawn after stiff resistance from state and city politicians who were against giving $3bn in tax incentives to Amazon. New York was selected alongside Virginia to share what Amazon calls HQ2 that will create 50,000 jobs and bring $5bn in investment.
- Chinese internet giant Alibaba’s financial services arm is to acquire UK-based money transfer company WorldFirst for $640m. This is Ant Financial’s biggest deal in the western world since it failed last year to win approval in a $1.2bn bid to buy America’s MoneyGram International. Two weeks ago, WorldFirst said it would exit the US, a decision which will help the Alibaba subsidiary avoid having to seek permission from American authorities on the transaction. WorldFirst was founded in 2004 and specialises in ecommerce enabling on websites like Amazon and eBay. Ant said the two companies are “highly complementary.”
- In South African related news, president Cyril Ramaphosa has launched a charm offensive on Eskom’s trade unions, promising that the electricity utility’s proposed three way split is not the precursor to privatisation. Eskom is teetering as a result of mismanagement and corruption over most of the past decade. It was plunged deeper into crisis this week when output fell below already depressed demand requiring the worst load shedding in four years. Over the decade, Eskom’s power sales have fallen from 218 thousand to 212 thousand gigawatt hours, while its staff complement has risen from 32,600 to over 48,000. In an effort to address the crisis, public enterprises minister Pravin Gordhan said this week Eskom has persuaded some former Eskom managers to return from abroad and is awaiting the arrival of three engineers from Italian power company Enel who are being sent to assist.