- In MANUFACTURING/CAR NEWS, US manufacturers offer incentives to attract workers, Nissan looks at a Renault split and we look at whether 2020 is the year for electric cars
- In RETAIL NEWS, shopper numbers fall and Beales looks tricky
- In INDIVIDUAL COMPANY NEWS, TikTok tries to appeal to advertisers, Lloyds Bank staff face a bonus cut and one small company aims to be the vegan Willy Wonka
- In OTHER NEWS, I bring you the flex challenge
So US manufacturers have to sweeten the deal, Nissan looks at Renault separation and we look at whether 2020 is the year for electric cars…
Manufacturers increase perks to get new hires to move (Wall Street Journal, Austen Hufford) shows just how tight the labour market is in the US at the moment as manufacturers are now offering to pay relocation costs and signing bonuses in addition to paying higher wages to attract new workers! There are currently around 500,000 factory job vacancies – the biggest number for almost twenty years – and when unemployment rates are at their lowest for nigh on 50 years, attracting new workers is getting difficult. These perks aren’t just part of job offers – they are using them in job ads to attract those from further afield. Welders, engineers and machine programmers are in particular demand and the likes of Caterpillar, Lockheed Martin and Raytheon are among those who are offering generous relocation benefits – the latter of which is currently offering up to $5,000 in moving costs for a $17-an-hour position, for instance! * SO WHAT? * This just goes to show how tight things are getting in the US labour market – and I would have thought things could get tighter still if the US-China trade negotiations get sorted out as I would expect a resulting increase in manufacturing activity.
Nissan executives step up planning for potential split from Renault (Financial Times, Peter Campbell, Leo Lewis and Kana Inagaki) shows how senior Nissan execs have accelerated plans to potentially split from Renault as the partnership becomes increasingly fraught. * SO WHAT? * If Nissan really does want to split from its longtime partner (and let’s not forget – if Renault hadn’t come along when it did twenty years ago with the now-disgraced former chief Carlos Ghosn, Nissan would have gone down the toilet) I think it is absolute madness. When EVERYONE else is
forging alliances around them (e.g. Fiat Chrysler and PSA’s full merger and countless other joint ventures or closer alliances), Nissan is looking to load up the shotgun and shoot itself in the foot. Unpicking Nissan and Renault’s closely intertwined purchasing and engineering functions will be extremely difficult and when you’ve got everyone else in the industry huddling together to cut costs and focus on specific areas against a backdrop of tightening regulation and technological change, Nissan’s arrogance just beggars belief. No doubt it will seek out alliances with other car manufacturers, but I would have thought its bargaining position would be shot to pieces as surely no-one will want to partner up with a company that will have to spend a LOT of time and money on unpicking its operations.
Will 2020 be year electric cars spark into life? (The Times, Robert Lea) highlights the fact that 2020 will see more than double the number of pure electric cars in the British showrooms. 2019 saw 19 electric plug-in car models on sale in the UK from the under-£20,000 Smart car with a range of under 70 miles to the £80,000+ Tesla Model X with a claimed range of over 300 miles. 2020 will see up to 22 new fully-electric models becoming available, four of which will be under £20,000. Until now, the mid-market has been dominated for most of the last decade by the Nissan Leaf, Renault Zoe and BMW i3, but the £20-30,000 segment is expected to hot up with cars like VW’s ID.3, electric mini, Vauxhall Corsa and Honda e waiting in the wings. * SO WHAT? * Range anxiety and charging network concerns remain the main reasons for overall sales of electric vehicles representing only 1.6% of car purchases and the Society of Motor Manufacturers and Traders thinks that they will still make up for less than 3% of new car purchases by the end of this year. The main prospective spanner in the works for potential sales growth, however, is the possibility of the government reducing (or abandoning altogether) the £3,500 subsidy for new electric cars. As we have seen in every market in the world, once subsidies fall, new electric vehicle sales crater dramatically. It’ll be interesting to see how things pan out this year, though!
High street shopper numbers fall and Beales is teetering on the edge…
No Christmas cheer for high street again (Daily Telegraph, Michael O’Dwyer) cites the latest figures from Springboard which show that December footfall was down by 3.5% versus the same month in 2018 – for the eighth consecutive December. * SO WHAT? * This is just more evidence of what a combination of higher business rates, increasingly thrifty customers, heavy discounting on Black Friday/Cyber Monday cannibalising Christmas sales and
relentless online competition is doing to high street retailers. Tough times. Something surely has to give in order for retailers to survive long term. Sure, I keep banging on about how they should improve the customer experience to give them what they can’t get online, but they could also do with an “outside” helping hand otherwise our high streets will disappear.
Beales on brink of administration (Daily Telegraph, Hasan Chowdhury) shows that one of the UK’s oldest department stores, Beales, is on the verge of going into administration. It is currently in talks with landlords about cutting rents whilst trying to find a buyer. * SO WHAT? * The terminal (in my opinion!) decline of department stores continues…
INDIVIDUAL COMPANY NEWS
In TikTok explores starting curated content feed to lure advertisers (Financial Times, Hannah Murphy and Tim Bradshaw) we see that viral video sensation TikTok is looking at launching a curated feed of content that will be guaranteed safe for brands to advertise in. This would enable the Chinese-owned company to charge higher rates to advertisers and mirrors a similar successful move by Snap, when it launched its “Discover” tab in 2015. TikTok is also looking at ways of letting users shop directly from brands. * SO WHAT? * This is a great idea and works well for Snap – the company said that it now has over 100 Discover channels with a monthly audience of 10m and average watch time rising by 40% year-on-year – so this idea definitely works. Given the amount of criticism that TikTok has faced over its dodgier content, I have no doubt that the prospect of a “clean” area will be very attractive to advertisers who want access to TikTok’s audience without the potential for damaging their brands.
Lloyds warns staff to expect first bonus cut in four years (The Guardian, Kayleena Makortoff) highlights a memo
warning its 60,000 staff about a potential bonus cut following a number of problems, including higher-than-expected PPI claims going into the final deadline. Obviously, the unions are up in arms (of course they are) about this, but the company says that it has not been finalised yet. Clearly this is an exercise in expectation management…
OK, so it’s a really small company but ‘Willy Wonka of vegan food’ stages successful funding round (Daily Telegraph, Hasan Chowdhury) shows that food-tech business THIS has raised £4.7m in its latest funding round to boost production of its vegan “meat” after only being launched in June 2019! The company currently produces vegan chicken and bacon rashers and supplies the likes of Waitrose, Ocado and Honest Burger. * SO WHAT? * At the risk of sounding like a miserable git, I do wonder whether things like this show that there’s too much froth in the market for plant-based meat substitutes. The company has not been around for long, was started up by a couple of fast food operators (not scientists!) and has already attracted £5.6m in total. Given that food giants including Nestlé and Tyson Foods are trying to play catch-up with the likes of Beyond Meat and Impossible Foods, the market is going to get really crowded and I’m not confident such a start-up can weather the competition. Despite that, though, I DO hope that it works as I will always want the little guy to win! I just think it is going to be an uphill battle.
And finally, in other news…
I thought I’d leave you today with Gymnast’s viral challenge sounds easy – but no one understands how it’s possible (The Mirror, Luke Matthews https://tinyurl.com/wh7q7c9). This is very impressive! Mind you, I think it would still be pretty hard to do this from a “back down” position as well!
Some of today’s market, commodity & currency moves (as at 0748hrs green is up, red is down). THIS IS INTENDED AS A ROUGH GUIDE ONLY!
|FTSE 100 *||Dow Jones *||S&P 500 *||Nasdaq**||DAX *||CAC-40 *||Nikkei **||Shanghai **|
|7,594 (+0.01%)||28,831 (-0.43%)||3,266 (-0.24%)||9,179||13,492 (+0.10%)||6,033 (-0.02%)||HOLIDAY||3,116 (+0.75%)|
|Oil (WTI) p/b||Oil (Brent) p/b||Gold Per t/oz||£/$||€/$||$/¥||£/€||$/₿|
(markets with an * are at yesterday’s close, ** are at today’s close)