Robert Cole: Business Commentary
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That man from the Pru has an enviable track record when it comes to recognising eastern promise. Prudential was one of the first British insurance companies to recognise the Asian growth potential and remains one of the most successful in the region. In little over ten years, the exotic adjunct that was Prudential’s Asian business has metamorphosed into being the the most powerful driver of growth for this £18 billion mega-corporate.
It ought not to surprise anyone, therefore, to learn that the Pru is in the vanguard of companies relocating jobs to India. Pru has an established reputation for recognising the potential in Asia. It might raise the odd eyebrow that the Pru is actively considering shifting more senior management jobs to the sub-continent. This is not another of those stories that may end with the construction of a new call centre. Pru is of the view that white-collar jobs – in accountancy, risk management, and insurance underwriting – may be equally well done in Bombay as they are in London or Manchester.
It may scare some people that the Pru is thinking about relocating senior, as well as junior, jobs to India. But even this should not shock. India and Indians suffered over a long period from to its politicians’ penchant for closed, quasi-command, economics. Many things – including the quality of trade-enhancing physical infrastructure – were neglected in the first four decades of Indian independence. Investment in education, however, remained a top priority. It cannot be assumed that the development of India’s human capital began only ten years ago when more enlightened economic policies gained traction under Manmohan Singh, first as Finance Minister and latterly as Prime Minister.
There were, and are, millions of Indians who live at or underneath the breadline. But this has not impeded this nation’s enthusiasm for education. It is long established and is now beginning to pay dividends.
Feelings of surprise at the rise of India may give way to indignation. Some people may be enraged because they wrongly assume that these jobs are being somehow stolen. They are not. They are being taken according to a game played according to the rules. If the jobs can be done as well in India as they are done at present here, there is no reason why Pru should do any other than exploit an opportunity. Indeed, if the cost of the work is lower, it has a duty to its value-seeking customers to relocate.
Shareholders should welcome the move since it shows Pru pursuing ways of preserving and creating shareholder value. Those same shareholders need not be concerned that the quality of work will suffer, although they may require understandable reassurance.
In allowing the transfer of these and other jobs to India and elsewhere, we do much for Third World development and the eradication of poverty. But the health of the UK economy may well begin to show worrying signs of strain if we fail to invest both heavily and cleverly in our own human capital resources.
It’s the long run that matters
Shares in Mike Ashley’s Sports Direct have now fallen by nearly 30 per cent in the two months since they were floated at 300p. No obvious disaster has befallen the cut-price sportswear retailer during that time. So the stock market and fund managers could be accused of short-termism, a refrain of wilful entrepreneurs less shy of publicity than Mr Ashley.
The truth may be that fund managers and entrepreneurs expect too much from each other. For investors, this float raised doubts from the start.
Sports Direct seemed to be a collection of assets astutely acquired and energised by Mr Ashley, rather than a coherent business. No money was being raised for expansion. The main purpose seemed to be for Mr Ashley to cash in more than £900 million and yet retain majority control of the company, leaving outside shareholders powerless. That always tends to make them fractious.
Mr Ashley showed no desire to relate to, let alone answer to, minority holders. He kept himself out of the immediate line of fire by taking the role of executive deputy chairman, the same role that Stefano Pessina had at Alliance Boots and that Lakshmi Mittal took at Arcelor Mittal before he showed his hand.
Given this initial distrust, everything since has been interpreted badly. Mr Ashley bought a 3 per cent stake in adidas on his own account, not the company’s. He explained that a commitment noted in the prospectus was not quite what it seemed (even though this benefited the company). and Citigroup, one of the share promoters at 300p, rated it a “hold” 15 per cent lower.
Yesterday, one of the few stockbroking fans switched from “buy” to “sell” after interpreting an opaque trading statement as a profit warning. Sports Direct is behaving predictably. It is therefore hard to have much sympathy for investors who gambled on the shares and now find, again predictably, that few others are interested in holding them.
Dutch auction
The 68 per cent vote in favour of the resolution put by the rebel hedge fund TCI is a heavy blow to the credibility of the ABN Amro supervisory board and its plans for a merger with Barclays, and a big boost to the ambitions of the rival Royal Bank of Scotland-led consortium.
Although the resolution has no standing in law, the ABN board risks being accused of ignoring the will of the bulk of its shareholders unless it starts cooperating fully with the RBS group.
It has now placed two poison pills in the way of a full-blooded auction. The LaSalle deal was bad enough, ABN shareholders argue, but even yesterday the ABN board was making it difficult for RBS to see the books.
Ironically, not all the fury at yesterday’s meeting was over the obstructiveness of the ABN board. There was also anger that a Dutch institution was being emasculated by Barclays (which is as nothing to the castration planned by RBS, of course).
Nevertheless, the vote was emphatic. A break-up may yet turn out to be impossible for antitrust or supervisory reasons. But the ABN board must now listen to its critics.

— Numbers of construction workers killed on site will rise, at the next count, by at least 15 per cent. This is depressing after so many initiatives by companies, Government and the Health & Safety Executive to raise safety awareness. It is also unacceptable. More workers now do not read English, so all parties need to redouble their efforts, helping high performers and enforcing the law against laggards to staunch the waste of life.
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So....
The UK IMports more than half (and rising) of its food. It IMports most of its manufactured goods (mostly from China and India). Just about the only thing it is EXporting is jobs - to India.
What is still made in the UK???
Very little it seems, other than 'profit' by property developers riding a rising (unsustainable) market - caused by over-population and propped up by alarming (and again unsustainable) levels of personal debt.
No wonder the balance of payments is rising sharply. If it weren't for London being the premier financial centre in the world then the UK would already be bankrupt.
If and when the bubble bursts, things could go horribly wrong:- There is no solid foundation to the UK 'economy' and the 'skills' held by those currently propping it up are more likely to be held in the future by hardworking far-easterners than the innumerate and illiterate workshys churned out by Bliar's schools.
The UK could easily be a 3rd World Country by the end of this century.
Jon Leigh, Southern, France
jane misses the point. The author quite clearly states that while moving jobs overseas is beneficial to us, at the same time we must 'invest both heavily and cleverly in our own human capital resources " ie education and training.
We must as a nation figure out where is our comparative advantage and ensure we develop it. The reality may well be that part of the economy (currently Tthe City' ) will benefit the most, and if so, the we must decide if we want a dog eat dog economy or whether we will shoft some of the gains of the most successful to help the less successful. We can't all be city financiers.
Neil Murphy, cromerr,
So the Pru. sends British jobs to India does it? Another company added to my list of 'DON'T SUPPORT'. British people need to vote with their feet and take their patronage elsewhere.
judy, Liverpool, england
Jane of London is right on the money.
Mark, Winsford, England
Blair: more parliamentary time spent on foxhunting than on education. Jobs sent overseas. Any connection? But New Labour really means well, it does and really sincerely so.
John , Canberra, Australia
Transfer of jobs to India means job losses in the uk, I fail to see how that is a good thing.
Saturnine, Worthing, Sussex
So the Prudential is thinking about relocating senior, as well as junior, jobs to India. So you think it is not a bad idea? That our labour market is hollowing out like our indentikit towns?
Perhaps The Times would like to outsource your job too. After all, good journalists must be two a penny in India whereis you must be very expensive.
Its not the same when talking about your own job is it?
America has been going down this route longer than us. Good work constantly being sent to India, replaced with poorer work such as filling shelves in supermarkets. Has resulted in the deskilling on America to the point where Americans don't make anything anymore and the country is now massively in debt because they buy in everything and have nothing much to sell.
In technology in Britain, the numbers of students studying IT, while our techies have to teach India's graduates instead of our own graduates. So when there is war where will you get the software from?
Jane, London, England
But what do we have to worry about? last year homeowners have made more from capital gains on their houses than from their jobs. They cannot move our houses to India, so we are ok
Michele, Richmond, Surrey
Who says that corporations should have the best interests of our society at heart? They hold no special allegiance to any one country in this global economy. Their priority is to make money for themselves and their shareholders. That's capitalism.
Simon Aldred, Preston, Lancashire
It is widely accepted nowadayas that businesses have a duty of care and sensitivity to the socities they operate in not just their shareholders. This is obviously not acknowledged in this article. The commentator praises the Pru for wanting to send all jobs to India without looking at the impact of the Pru's social reputation in the markets it sells its products. Recently we hear of so many companies transferring jobs back to Europe as their customers express their dissatisfaction dealing with call center operators in India. Well, if the Pru's customers also object to this and show their dissatisfaction with moving their business, then this startegy will back-fire. I am sure that the Pru would have researched this well to ensure that it is not going to be an issue for them. To insinuate though that the social element of doing business is irrelevant when transferring all jobs to low cost countries whilst reaping the extra margins by selling the services to the western consumer is naive.
Gianni, Maidenhead,
"It's the long run that matters" is the correct title on the wrong article. Skills, experience, training facilities and research are all diminished as a result of the transfer to low wage areas. Examine Britain's pathology and imaging services. Once destroyed they cannot be re-created and once destroyed the price will be ruthlessly raised. Examine the case of Citicorp and Iflex.
Shareholders and owners alike care only for the bottom line and only rarely for people or countries.
The answer is to reward the long term approach, generate the skills to match the work and penalise those companies who profit from the modern day slave trade. The only reason wages are lower iin countries like India and Argentina is that companies can avoid tax, social security, pensions, software licences and safe working conditions. Add these to bottom line and it is more economic to keep the work in the UK and the slaves will stand a chance of better conditions in the long term.
Richard Herbert, Buenos Aires, Argentina
House prices are the root of all evil for the UK. Workers need higher wages to pay for ever increasing house prices. This in turn fuels the price rises and the uncompetitiveness of the British worker.
gary, dallas, texas
I am from india and i would like to point that the UK economy that is booming is because of free trade and globalisation. Job transfers are also part of this. We need to look at the broader picture, if the developing countries grow so will the developed. Definitely a educated Iraq, Iran or Palestine will not drain the economy of the West as it is currently doing. Think about the big picture and as mentioned the long term gain.
shiva, London, UK
I really couldn't care less where the Pru goes.
It miss-sold me a Pension when I had an occupational one.
It sold me an endowment policy that didn't cover what it was meant to.
It administers my Occupational Pension Scheme AVC fund and returns a growth of 2.5% per year - well below the RPI and Bank of England base rate. (you cannnot get at this money as they have locked it up in red tape so you can't transfer it out to a better fund)
My Mother and Father took out a Guaranteed 5 year Bond and the Pru tried to go back on it's guaranteed rate of return (because it had a few reverses in the Stock Market) They threatened legal action and the Pru paid up.
The worst financial company in the UK and I am amazed that the FSA allows it to continue operating.
India can have them.
viper217, Glasgow, Scotland
I agree with Andrew from Manchester. The benefit of jobs tansfer to other cheap labout countries goes to a small elite. What they fail to recognise is that as more jobs move to developing countries - the unemployment rate will rise in the UK then the economy will suffer. The eventual scenerio is that a vast pool of unemployed people will be unable to survive on depleted welfare payments and thus turn to crime.
This will mean that those business elites will be unsafe in the UK and thus need to move overseas. Perhaps that's their strategy.
Tony, Warwick, UK
It's another of these---"it may well be good foe you all in the long run" arguments. It may or it may not, however I do know at the age of 70, I do not have as much "long run" in me now as I did 50 years ago!
DAVID VINTER, LOUTH, LINCS. , UK.
Please remind me who said "Give the capitalists enough rope and they will hang themselves" was it Marx or was it Lenin? the result will be the same regardless.
akeroyd, whitby, yorks
I have always wondered how it is that companies like the PRU think that it makes sense to shift their operations to third-world countries while their market is here in the first-world. If the jobs go then surely their business will ultimately suffer as peoples spending power deteriorates.
If our salaries stagnate as a consequence of this shift then so ultimately will their business. I suppose they are adopting the Ostrich approach, assuming that someone else will provide the jobs and fat salaries needed to keep their business going. The newly rich Indians perhaps?, let's hope so.
John, Limerick, Ireland
Ah, I see, so, it is actually in our interests to see the wholesale transfer of jobs and, indeed, almost entire corporations to India and China etc. The stupidity and irresponsibility of this argument beggars belief. What business activity is there that can not be transferred to India or China, or anywhere else in the developing world, that can't be done more cheaply there? Exactly what activities should we invest our own human capital resources in, that won't be the next in line for transfer.
This is a recipe for cultural and economic disaster, and social unrest. I am sick and tired of hearing this nonsense. The only people in the West to benefit from this activity are a tiny minority in the business elite. So corporations can make any decision in the interest of their shareholders, even if this is directly harmful to the societies they want to operate in? No, the direct transfer of jobs out of the UK is not in the interest of this society and to say otherwise is ludicrous.
Andrew Hark, Manchester , England