Seems that Iphone as entered its maturity phase since Tesco aims to have Iphone in-store by Christmas

I always saw Apple products to be prestigious and as an Apple fan myself; I think that they shouldn't let a giant store such as Tesco sell their Iphone since it could ruin their image. I am aware that with the recession it is important to find a way to reach more customers, but I don't think that Chanel will lower its price and Apple shouldn't either.

Iphone is the most wanted phone on the market at the moment and anyone is ready to pay the price to have it in his possession. I thought that even after 2 years, Iphone was still the coolest phone on the market, but I guess everything comes to an end. Iphone early adopters market is probably saturated. Thus, the company needs to find new customers that might not be ready for their products, but if it is available at a cheaper price, they would be able to give it a try.

When I heard about that news about Tesco future agreement with Apple, I was sure it was only some rumours, so I decided to start some research and found some articles on the subject. I was disappointed that none of them were talking about Iphone's image, but I realised that in the financial world, everything was about business and not necessarily brand value.

The Financial Times was one of the article I like the most since I felt that there was a little of sarcasm in the first sentence saying that Tesco customers could pick up an iPhone as well as the Christmas turkey and mince pies in stores this holiday season, in a move that could spark a price war over the popular smartphone. Moreover, the article didn't only related the news, it also gave some hint of the future price the company was forecasting by quoting them we are hoping to bring out something that is a little bit different to what is already out there in the market, and would like to bring some Tesco value to the iPhone. This new agreement will probably affect Orange and Vodafone that just got the rights to sell it after a 2 years close contract with O2. This new agreement will probably lead to a price war between the companies since new markets are being reached, but I just hope that it won't affect to much Apple's image. The FT seems to be on the customers side since it demonstrate all the good side of Tesco new launch.

The article from Guardian was quite surprising since it didn't have any opinion. The author basically relates the story with facts about the different price plan O2 and Orange had and stating that the price difference of 24 p between the 2 companies didn't change anything in the market. The article wasn't that interesting since half of it was comparing price plan of O2 and Orange. I would have like the Guardian to be more critical about this new acquisition instead of simply analysing the 24 p difference between price plans.

Finally, Times Online showed how this new launch is quite surprising for Orange and Vodafone since both company just fought really hard to secure the rights to sell the Iphone which will probably cause a price war reducing the profit margin. I found that this article stated all the important facts of this acquisition. Moreover, the Times also inform the reader of the future plans of Tesco telecommunication which shows more research on the subject and gives some hope during this hard time to those customers who like nice products but are struggling with money for the moment.

Overall, even though if this new launch will benefit customers, I still think that Apple shouldn't spread their product to any company since it should keep its prestige image. I was surprise that almost all articles stated the same facts since they could have say much more on the subject. I just hope that the authors were not right about the fact that customers picking up a turkey and a Christmas pudding may also be able to throw an iPhone into their trolley. (Times Online)

Sources:
Guardian:

http://www.guardian.co.uk/business/2009/nov/25/tesco-iphones-value-christmas

Tesco's Site:

http://www.tesco.com/mobilenetwork/content.aspx?page=12

Daily Mail:
http://www.dailymail.co.uk/news/article-1231161/Tesco-start-selling-iPhone-Apple-launches-day-Black-Friday-sale.html

Times Online:
http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article6932463.ece

Financial Times

http://www.ft.com/cms/s/0/68106e24-da2b-11de-b2d5-00144feabdc0.html

Despite recession, seems that people still want to celebrate and enjoy good wine!

Finally some good news from recession, people are still having fun as it has been shown since Majestic Wine, Britain's largest wine warehouse chain, today revealed it has seen off the recession after returning to sales growth and reporting better-than-expected profits for the first six months of its financial year. (Times)

I can't stop myself wondering if it is a good thing or if people are just drinking more to forget about what is going on. If wine sales rose while jobs are going down, I think the government should be a little more concern about what is going on. For sure, it is good for Majestic business, but is it really good for everybody? Can people really afford to spend more on alcohol? All the pubs are already full around 5-6 pm around London during the week, if warehouse are selling more, that means people are drinking even more...

I read different articles because I wanted to know if I was the only one thinking about the repercussion on people's health and not only thinking about the profit of a business. I read the Guardian, the Telegraph, the Time, Reuters and the Wall Street Journal as well as the interim results from Majestic Wine company.

The first article is from Reuters. The headline was definitely clear about what the article will cover. The overall article was quite objective and stating facts, but the first paragraph was really interesting. The author showed a little is opinion which is rare from Reuters that normally only state facts. Despite the economic doom and gloom it appears people are still happy to splash out on a drop of the good stuff, with fine wine sales up and online sales soaring- a 24.6% rise which accounted for 9.2% of total retail sales. I think that the journalist did a great job in the first paragraph since its the most important of the article and definately catch the eye, but I think that the article could have been longer and continue in the direction of the author instead of relating basic facts. Overall, it should have talk more about competition, but even though it was relatively short, I liked the fact that it introduced a comment from a shareholder saying that majestic remains well capitalised and well placed for further expansion, which warrants a higher valuation in our view.

After this article, I analysed the Telegraph because its headline was different from the majority of the other articles and attract my curiosity: Majestic Wine chief Steve Lewis shows he has a nose for business. I thought it was a fantastic headline because there was an overtone since when you talk about wine, you often use terms about the smell to describe it. Moreover, the article was quite interesting because it showed how the business was manage instead of simply relating the facts about the growth of profit. Furthermore, the article didn't only stated the good news, it described how the new chief executive Steve Lewis struggle and found new strategies to make Majestic profit from the recession instead of loosing money. The journalist clearly did lots of research and it is from far the best article on the subject. This article was the most accurate and detailed and it gives to the reader the chance to understand more the business strategy of the company success.

Finally, the other articles I considered since it wasn't just relating the facts that were sent by Majestic to the different news papers, is the Guardian. It is one of my favorite newspaper since it is more left-wing and always have some opinions which makes the articles more interesting. Like the Telegraph, the Guardian gives the reader more information about how the company succeed from recession. What I found interesting was that it gave me different info from the Telegraph pushing more on the customer service side by explaining that it was possible to give wine reviews online and that free wine courses were held in stores. Finally, I like the fact that the article gave 2 different opinions from Investec and Altium; one stating that Majestic remains well capitalised and well placed for further expansion while the other was more on the side of caution in modelling sales growth.

To conclude, I think it was a good thing to read different articles on the subject because the majority of them were simply relating numbers and facts. I think that to be completely aware of the situation nobody could have read only one article since it is interesting to know the company's strategy which was only described by two articles. I think though that the journalists should have stated some facts about how it could affect the population. I was sure that The Guardian would have talk about it with is headline stating that in the current climate, it's not the done thing for businesses to be spending as much on booze for corporate entertaining, but stay at home consumers are still splashing out on wine, but no. I just hope that the government will look at it and if the alcohol sales are still rising, that they will do something to aware the people like in Canada that too much alcohol isn't good for anyone.

Sources:

Guardian:
http://www.guardian.co.uk/business/marketforceslive/2009/nov/16/majestic-wine

Telegraph:
http://www.telegraph.co.uk/finance/financetopics/profiles/6469958/Majestic-Wine-chief-Steve-Lewis-shows-he-has-a-nose-for-business.html

Reuters
http://uk.reuters.com/article/idUKLG37711720091116
http://www.reuters.com/article/bankruptcyNews/idUSLD68866020091116?pageNumber=2&virtualBrandChannel=11604&sp=true

Tax on banking transaction to help with the cost of climate change, Canada doesn’t agree with Brown.

I followed what was going on at the G20 this week. I was choked and finally not that surprise that once again Canada was on the US side. It seems that my country always follows in order to be seemed like we have an opinion, when actually it is evident that they don’t know what to do. Our dollar just prove it, it plays up and down since a year.


Gordon Brown’s proposed at the G20 summit an international levy on transactions to prevent tax payer’s money to be use in future bailouts. This tax was also proposed in order to help the cost of climate change. A Tobin Tax is the suggested tax on all trade of currency across borders. Named after the economist James Tobin, the tax is intended to put a penalty on short-term speculation in currencies. Tobin suggested a new system for international currency stability, and proposed that such a system include an international charge on foreign-exchange transactions. The idea lay dormant for more than 20 years and was revived by the advent of the South East Asia economic crisis in the late 1990s[and now following the credit crunch in 2009 by UK’s prime minister].


According to what I read, the Tobin tax is actually a good idea to make the bank pay back to society, but I’m not sure Brown was the right person to propose it. It seems that he doesn’t have enough power. Moreover, by saying that if not all the countries are following the idea the UK wouldn’t do it shows that he might have just wanted to be more appreciated than having finally a good thing to propose.


I read different articles from UK and Canada to see how they were relating the story and how the opinions were differing between the 2 countries. The articles I like the best were from the guardian because the writers had opinions.


The headline of the guardian was quite evocative Don’t let a backlash knock out Tobin tax. It is quite obvious with such a headline that the article is in favour of the Tobin tax. In the first paragraph, the journalist state clearly is opinion by saying that support for a tax on global financial transactions is a welcome call on the banks to repay their debt to society [..] and to defend the idea of financial transaction taxes as a means to the progressive redistribution of economic gains. The article has many bias, the author clearly shows is opinion and uses ways to convince the readers. I think that people in favour of the tax will definitely agree with the author. I also like the fact that it had a lot of research in this editorial since the author showed how the tax was proposed 10 years ago in south-east Asia, the benefits of the Tobin Tax even if his opinion was present and what this tax could bring even at a rate of 0.05% for UK’s national economy by generating $700bn a year that could be invested in public services. He ends the article with a strong argument saying that the billions that could be raised by a financial transactions tax offer a means to recoup those losses [loss of jobs and big cuts into public services] and to direct funding towards frontline public services, anti-poverty programmes or adaptation to climate change.



I totally agree with the position of Guardian articles. It was clear to read, it gave me enough material to be able to understand the different issues facing this idea from UK’s prime minister and it convince me that this action should be in the best interest of everyone worldwide. It also discourage me that my country wasn’t in favour of it since we also need to improve our public services, especially our health care since we can wait more than 12 hours in a hospital before a doctor sees us.


Another article that was shown in the Guardian by another other definitely proves that this paper is pro opinions and more on the right side. Another article shown in the paper had for as a headline: Gordon Brown is right: rich western banks should pay for the developing world to go green. This second article agreed 100% with Brown statement saying that «There must be a better economic and social contract between financial institutions and the public, based on trust and just distribution of risks and rewards.» The author clearly show is opinion and says the big problem is to get universal backing. What I liked about this article is that the main focus was about the benefits this tax would bring to poor countries and for the environment.


Both articles from UK Guardian were in favour of the tax and what this could bring to the world. I read other articles as well from FT, Wall Street Journal and The mail online, but they were more relating the facts about what was said and didn’t went really further in details.


As for Canadian newspapers, I found that they were not really involve into the cause of Tobin tax and how we could improve our economy if for once we would follow European’s instead of Americans.


Reuters and Canwest collaboration for an articles show that Flaherty, Canada’s finance minister, doesn’t appear convinced that a tax will help. The article doesn’t have any bias, it simply relate what happened during the conference, which clearly deceived me since there was 100 things to say. Some quotes in it show how Flaherty keeps everything according to the book by saying «we have been a government that has been reducing taxes». I don’t really know how since our tax are not really moving since the past 5 years. The article is not in favour of Canada’s opinion or UK, but it still shows how Canada was behind by stating that «it’s not particularly a priority in the Canadian situation, since we have not had any of our financial institutions fail.»


This last quote is truth for now, but I think our economy is struggling like every economy right now and that Canada should be part of this levy that is even lower than the Tobin Tax at only .005 per cent to help the global economy.



To conclude, I think that Canadian reporters should support more our Country and should learn from UK’s reporters. It is not hard just to give an opinion instead of just relating when it comes to financials news that are happening worldwide. I think that even if our banks are not in a big crisis, Canada should separate itself from US and have an opinion and be more globally concern. I think we might be in a changing are though since UK prime minister is in favour of a change, we might, hopefully, follow in the next years if we can change government.


Sources:

Guardian

http://www.guardian.co.uk/commentisfree/2009/nov/10/tobin-tax-backlash-financial-transactions

http://www.guardian.co.uk/business/2009/09/bank-tax-pays-for-develpment

http://www.guardian.co.uk/business/2009/nov/08/darling-brown-tobin-tax-obama/print


Reuters & Canwest

http://www.ottawacitizen.com/news/Flaherty+sold+proposed+bank+levy/2198883/story.html

Mail Online

http://www.dailymail.co.uk/news/article-1226013/Humiliation-Brown-plan-global-banking-tax-rejected-U-S-G20-meeting.html#

Reuters

http://uk.finance.yahoo.com/news/uk-joins-g20-push-for-bank-levy-reuters_molt-2335cb3ba041.html?x=0

Financial Times

http://www.ft.com/cms/s/0/594673f2-cba8-11de-924d-00144feabdc0.html?nclick_check=1

Ryanair…expecting to be the new Britain’s number 1 airline

The news about Ryanair growth didn’t surprise me that much. Since I got to London, every time I want to travel I look at Ryanair’s Website because I know there is no other company that offers flight as cheap as them. Moreover, I always got good service with this company even if it isn’t as luxurious and comfortable as British airways or Air Canada.

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I then decided to find out more about this assumption. I read different articles about the company and about what was going on; some were about its growth, others about their strategy and some were referring to the comments that easyJet CEO made about Ryanair.

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Actually, the low cost carrier predicted that they could become UK’s dominant airline within months since British Airways is planning to reduce its number of flights for the winter season when Ryanair is forecasting to grow. Moreover, since the company profit expanded by 80 per cent in the first quarter of this year and since their passenger numbers are rising because of all their different promotions such as a flights for 1 pence, we can almost be sure that their prediction will be confirmed by winter.

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A good article describing Ryanair’s was in the Independent. First of all, I found the headline pretty original and intriguing A tale of two airlines: the good and the bad. The story was really positive for Ryanair. I couldn’t say it was bias, but the author showed that she was on the company’s side. The article was clear and easy to understand even if it was stating some numbers such as the group’s £350 millions profits which was actually distorted by a 42 percent fall in fuel costs after the sky-high oil price spike of 2008 and the fact that the average fares decline by 17 percent. The article used good quotes of Michael O’Leary, Ryanair’s chief executive saying that the will overtake BA in the UK market as well as Alitalia and more for 2010.

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The recession seems to have helped low-cost company and especially free times ones since everyone was depressed with the recession, they then decide to spend more on leisure activities to forget about all the money they lost. O’Leary confirms it «we love deep downturns and recessions. We will be trading very profitably when all around us are blowing their brains out.».

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According to other articles, Ryanair didn’t seem to have such a winning strategy to be able to gain its desire 66 millions of passengers by the end of the year even with their plan to decrease their fares by 20%. The article from the Financial Times was more pessimistic about the company. The author explained why Ryanair might have to rein in growth. O’Leary wanted to buy 200 jets for a low price since the industry of Boeing was in crisis with the recession, but they showed some reluctance, which I understand because it can’t always been the same people that are gaining from the others. Moreover, this story integrate an analyst point of view stating that the only reason Ryanair had success was because they were able to keep down maintenance costs with a young fleet which puts pressure for replacement. I think that he might be right, because it is hard to replace aircrafts and since the company is popular for its low-fare, it they start to stop their growth, Ryanair would be under less pressure to fill new seats, so there would be less need for eye-catching promotions and average fares could then rise. Thus, the company needs to find maybe a better strategy than giving money to its shareholders.

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Finally, the last article that made me smile is one from sky news. It highlighted the competition between Ryanair and easyJet. The article showed how easyJet was attacking Ryanair by criticising his rival’s growth strategy plans saying they will end in tears for his shareholders. This article made me feel that Mister O’Leary didn’t know anything about business, thus I could say the author was quite bias. This story didn’t say that much about what was going on, but I liked it since it showed the other side of the company. The quote that made me laugh from easyJet was that they were suggesting Ryanair to buy a piece of the Mojave Desert in California to stat an aviation museum. Even though the author showed the bad side, at the end he stated some facts about what was going on. I think the reason why it was more entertaining at the beginning was to interest the reader and encourage him to read through the article.

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I found my reading interesting because all the articles seemed to have a different angle relating the story. I learned more about the company and I found out that I was probably lucky that I went to Dublin for 2 pence. I hope Ryanair will get its deal with the Boeing because it gave the chance to everybody to travel around and discover new cultures, which has no price.

Sources:

Times Online

http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article6900107.ece

Sky News

http://news.sky.com/skynews/Home/Business/Ryanair-And-Easyjet-Bosses-In-Battle-To-Take-Crown-Of-Top-UK-Airline/Article/200911115431058

Financial Times

http://www.ft.com/cms/s/0/a60cdd5e-c818-11de-8ba8-00144feab49a.html

Independent

http://www.independent.co.uk/news/business/news/a-tale-of-two-airlines--the-good-1813698.html

Mail Online

http://www.dailymail.co.uk/money/article-1224784/Ryanair-soars-fres-rise.html#

Telegraph

http://www.telegraph.co.uk/finance/markets/questor/6487711/Turbulence-at-Ryanair-could-be-good-for-investors.html

Where's the loonie going?

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One day it's up, the other day it's down... Is there someone in control of this country currency? I understand that since the credit crunch a lot of changes all around the world with the currency, but I unfortunately can’t say I’m proud of mine.

I think that we should be proud that the dollar has strengthened around 17 percent this year. For my part, it really helped me since I've been travelling and I have more money, but the Bank of Canada doesn't think the same.

The bank literally cut the enthusiasm of everyone that was thinking that strong Canadian growth would bring higher interest rates. They warned the population saying that the dollar’s rapid rise has sapped Canada’s growth outlook and reaffirmed an intention to kept its key interest rate at a quarter of a percentage point through next June, which make the loonie plunged again last Tuesday. It seems that only speculations can decide whether our dollar will rise or go down.

Now where should it go? Any further? Probably not since the Bank of Canada have the power to act on our interest rate as they want which influences the profit speculator get from holding Canadian dollar assets. We all know that if an investor confidence is low, Canada will get lower inflows of money whether when its high, Canada tends to get higher inflows of money because our economy benefits when global growth is strong (probably because the price of our oil is higher as well as our industrial metals).

So right now, Canada’s dollar is high because the oil has risen which makes commodity prices rising as well. Negative or positive? I think this will be quite positive for Canadians like me since our money will worth more worldwide but when I think about it, I agree that this might have bad consequences for exporters and finally at the end, our economy which will make our dollar probably fall again... Then, what the country should do?

According to the finance minister Jim Flaherty, the main obstacle to a robust recovery of our economy remains the weakness of U.S. demand which will more than fully offset recent signs of economic growth.

I read different article this week about the Canadian dollar since I realised that almost everyday I had had a different rate when I was shopping in England on my credit card.

I really liked the article by the Canadian press. First of all, the heading was quite attractive Soaring loonie, low growth won't change plans for no taxes hikes: Flaherty. I thought it shows how finance minister was in accordance with the Bank of Canada. I can say that the article was quite objective saying the facts and both the goods and bad sides of the rise of the dollar. Moreover, I liked that the author highlighted the fact that Canada was not like Australia and because our main trading partner is US, we have to be careful since their economy is going through a very difficult time.

As for Bloomberg article, it was straight to the point as always. It was stating the main points of what was going on with our loonie. I liked it since it was regarding the effect on the business side more than the Bank of Canada interest rates. Finally, as always, Bloomberg showed numbers which make the articles more specific.

Finally, the Globe and Mail helped me understand what we should look at for the monetary policy report and also understanding what was going on with our currency. The headline was clear Bank of Canada: five things to watch for and the article clearly explain to the reader what was the Canadian dollar projection, how much exports were expected to decline, how come the bank expected 3 per cent growth next year, etc. This article was clearly made for anybody (like me) who didn't know that much about finance and wanted to learn more. I thought it was the easiest to read and the more efficient.

After all, I don't know if the Canadian dollar will ever stabilised since we are quite dependent of the US, but I hope that the government will help us instead of putting barrier. Maybe we should switch our major trading partners to another country?

Sources:

Bloomberg:

1) http://www.bloomberg.com/apps/news?pid=20601082&sid=aFzW.jzWI74Q#

2) http://www.bloomberg.com/apps/news?pid=20601082&sid=a4KFj5CJczBM

Globe and Mail:

1) http://www.theglobeandmail.com/report-on-business/crash-and-recovery/new-front-in-war-on-strong-canadian-dollar/article1331354/

2) http://www.theglobeandmail.com/report-on-business/bank-of-canada-five-things-to-watch-for/article1333607/

Canadian Press: http://www.google.com/hostednews/canadianpress/article/ALeqM5guLHj7dqpUCMEhHME0xGHuSrIhuA

Wall Street Journal: http://online.wsj.com/article/BT-CO-20091022-700960.html?mod=rss_Currencies

Price war over books between Wal-mart and Amazon: it seems that big retailers don’t care about the industry.

I was not surprise this week when I read that Wal-Mart was doing a new assault to gain more market share by reducing its prices at a lower price than their actual cost and well below competitors.

Since its beginning, Wal-Mart attack ferociously new markets with price cutting to always offer the lowest price in the market. The company remains committed to providing customers with the lowest prices available without thinking about how they will affect the smaller retailers and independent sellers to dominate all markets.

Their strategy had forced many small and specialize retailers to either lower their prices or simply close since their customers were going to Wal-Mart.

Last Thursday, Wal-Mart launched a brash price war against Amazon.com. The company announced 10 anticipated new best-seller books for just 10 dollars to enter the digital marketplace and to compete with Amazon.com, the world’s largest online retailer. This tactic forced Amazon to match their price since they also seek to offer the best online prices for their customers.

Now, the books are on sale at 8.99 dollars at Wal-Mart and 9 dollars at Amazon which is definitely below the hardcover normal price of 22-35 dollars. Both companies are offering more than 70% of rebate when the normal big retailer’s prices are 30% to 50% off the market price.

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I definitely think that this war could damage the book industry because writing a book takes time and there is no authors, publishers or booksellers that will be able to write or publish new works at a price as low as 9 dollars. Maybe Wal-Mart and Amazon can do it because they have a certain power, but their war will be more detrimental to the industry and I think that at the end they will lose if there are no more writers.

I read different articles that covered this price war between these two big discount retailers. I particularly enjoyed the New York Times because it related the story in favor of the book industry. The author introduced is article with a good headline Price War over books worries industry and relate the entire story with some bias because the author introduced some quote from Wal-Mart showing that they were attacking the market versus quotes from an owner of an independent company saying that you have a choke point where millions of writers are trying to reach millions of readers but if it all has to go through a narrow funnel where there are only four or five buyers deciding what’s going to get published, the business is in trouble . (New York Times)

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As for the Financial Times, I didn’t really appreciate their article because in comparison with the other articles that I have read, they were basically summarizing what the other articles were stating. The only positive comment I could say is that they used an analyst comment saying that the online price war underlined the long-term threat new technology posed, but I think the author should have say more.

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Bloomberg’s author focused more on the benefits and stock market of Wal-Mart versus Amazon which was quite interesting as well. It demonstrates more research in the subject than just relating the facts. Moreover, the author was quite objective and went even further in the information by giving the reader the strategies of both companies. Finally, the author also state that he contacted Amazon.com’s press office and didn’t received any immediate response which shows that the PR people from Amazon probably decided to wait to see what was going on before related information to the press. I really liked this sentence because without stating anything, Bloomberg demonstrate that Amazon doesn’t really know what to do.

Overall, I think that with all the different articles I read, I’ve been able to follow the price war and discover all the information from different point of views. The majority of the articles related more or less the same story but I was happy that some authors gave quotes from the industry showing that it was in danger even though I would have gave more facts about how the small retailers, writers and publishers could be affected in the long term.

SOURCES:

Financial Times: http://www.ft.com/cms/s/0664a9f10-bab4-11de-9dd7-00144feab49a.html
New York Times: http://www.nytimes.com/2009/10/17/books/17price.html?hpw= &page wanted=print
Bloomberg: http://www.bloomberg.com/apps/news?pid=20601110&sid=aNudtIRVsXWM
Wall Street Journal: http://online.wsj.com/article/SB125565024634288895.html
Reuters: http://www.reuters.com/article/newsOne/idUSTRE59F5GX20091017

No concern for environment, GM sells hummer to china industrial business

I was literally chocked this week when I read about this new acquisition. It is written everywhere that if we don't take care of our environment, we will kill our planet. I think that GM forgot about the new trend saving the environment.

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In my opinion, they should have stopped producing it instead of selling it to the most populous nation with 1,333,460,000 citizens. I can't even imagine what will happen; they will possibly produce a cheap mass-market version of the Hummer for the local market so everybody will be able to afford one.

Moreover, for the Chinese buyers, the deal represents the first acquisition of a distressed asset from the American car industry and a calculated bet that it can revive a tainted brand (Times online). Thus, I guess that Chinese will be proud of this brand and might buy more of those polluting cars even if according to James Taylor, GM’s executive, the brand has been unfairly tagged as a symbol of the American gas guzzler.

It was said Friday, October 9th 2009, that General Motors Co. had signed a definitive deal to sell its Hummer sport-utility vehicle business to China’s Tengzhong Heavy Industrial Machinery Co. Tengzhong will buy the company through an investment unit in which it holds an 80% stake. The remaining 20% will be hold by Mining tycoon Suolang Duoji, a private entrepreneur. Even though the purchase price was not disclosed, GM said it estimated the value of Hummer at US$500 million, but it was said that the brand will be purchased for about US$150 million, which is less than a third of its value.

With the rising gasoline prices and growing environmental awareness, the hummer demand was at its lowest this year with only 8 193 hummers sold compared to 71 524 in 2006. I think this should be a sign, nobody wants those anymore, don’t try to convince Chinese to become adept of it to feel a little more American.

Many different papers around the world related the story about this new acquisition. Some papers were more objective when others tried to reveal the story objectively with some bias. Overall, I can say that every paper said more or less the same facts; some were more detailed when others only gave a summary of what was going on.

My favourite article is from Reuters, where the author related the story with strong words such as iconic but tarnished Hummer brand and obscure Chinese machinery maker to show that he wasn’t really in agreement with this deal. The author could have gave more details about the transaction though, because he didn’t inform the reader with all the important details about the company and the implication of the deal.

Wall Street Journal uses a different approach to reveal the news. It informs the reader with an objective view and very detailed information. They first inform us of the transaction fees and explain that the China’s central government could still balk at the acquisition because of Hummer’s reputation. It also shows all the benefits that this deal will bring to China, which makes me feel a little more comprehensive even though I don't really agree. The author also used an optimistic approach and informed the reader that under the new Chinese owners, Hummer would try to come up with more fuel-efficient models, including gasoline-electric hybrid models. Finally, the article gives us some hope that this deal might not come to an end since China has been pushing its consumers toward purchasing smaller cars to save energy.

On Saturday, The Washington Times published an article starting with a strong headline China buys all-American Hummer for $150 million, which was almost saying that China was steeling something from US. The author used quotes to show how it was weird and how important this brand was for American. I think it was obvious that this article was written by a real patriotic American. I liked it, but I felt this article was trying to convince its reader that Hummer has value in this market, which is untruth for me.

I enjoyed reading news from UK, China and US about this acquisition because all these different countries had a different approach. UK was relating the facts and showed both positive and negative sides of this acquisition. The article from Xinhuanet was really optimistic about it, even if both government didn’t yet agreed, the article gave only one quote from Taylor’s saying that when Chinese government will see Hummer’s new business plan it will be very supportive. Finally, the articles from the US I read seemed happy to save their brand but at the same time, it gave the reader a feeling that they were loosing their identity.


Sources:

Reuters: http://www.reuters.com/article/ousivMolt/idUSTRE59916D20091010

Financial Times : http://www.ft.com/cms/s/0/d0674ee6-b534-11de-8b17-00144feab49a.html

Times Online: http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/ article6868799.eceturn operations.

Financial Post: http://www.financialpost.com/story.html?id=2087095

Xinhuanet: http://news.xinhuanet.com/english/2009-10/10/content_12203429.htm#

The Washington Times: http://www.washingtontimes.com/news/2009/oct/10/chinese-firm-closes-hummer-deal/

Wall Street Journal: http://online.wsj.com/article/SB1000142405274870374660%204574462111444795076.html?mod=googlenews_wsj