One can’t grumble too much about ministers’ ra-ra tone over Nissan’s plans to build an electric battery plant, or gigafactory, in Sunderland as part of a £1bn project. The investment is big, the first of its kind and 6,000 jobs are promised. Milking the moment is fair.
We don’t know precisely how much public money has been promised but, if the rumoured £100m is correct, the figure doesn’t sound widely different from what other European governments are throwing around to secure high-profile electric vehicle investments. Everyone’s at it.
But Kwasi Kwarteng, the business secretary, needs to watch his hyperbole. The claim that Nissan’s move is “a huge step forward” in plans to put the UK “at the front of the global electric vehicle race” is too much. In car racing terms, the UK is merely off the starting grid.
Nissan was always going to be the easiest carmaker to persuade. The Japanese firm’s worries about Brexit evaporated when it was assured the tariff regime on exports to the EU wouldn’t hurt.
Sunderland is reputed to be one of its most efficient plants. It would have been odd if it hadn’t chosen to pursue its electric dreams in the north-east of England.
The calculations about the attraction of the UK for gigafactories will be finer for other carmakers. Kwarteng’s hope is that a “domino effect” will apply, with Jaguar Land Rover, Toyota, BMW (with the Mini in Oxford), and Stellantis (at Ellesmere Port) the ones to watch.
Since the dominos won’t tumble on their own, the Society of Motor Manufacturers and Traders made a fair point this week when it called not just for bigger subsidies for the electric car revolution (of course it wants that), but also for a few targets to be set.
For example: 60 gigawatt hours’ (GWh) worth of battery capacity to be built in the UK by 2030, which would allow 1m electric vehicles to be produced and would be “ample” to maintain the UK car industry’s current market share.
The first stage of the Nissan project will deliver 9GWh of capacity. There is scope to go higher in time, but the figure gives context: there is a very long way to go in this “race”. Don’t celebrate too soon.
Activist investors’ mild letter to GSK won’t stir up any rebellion
Aren’t activist investors meant to sound angry? Vast chunks of Elliott Management’s 17-page open letter to GlaxoSmithKline’s board comprised mild statements of the bleedin’ obvious.
Long-term shareholders didn’t need to be told that the shares have performed shockingly and that too little was spent on research and development over many years. Those ailments are what the demerger of the consumer healthcare division is supposed to address – a spin-off Elliott says it supports.
Four of the five “recommendations” were tame. Number four was just a reminder that the board has a duty to consider bids for the consumer business if any turn up. Obviously it does.
The nub, then, was a demand that GSK review its executive lineup ahead of the big split. In effect, Elliott wants chief executive Emma Walmsley to have to apply for the job of head of “new GSK”, the core pharma and vaccine business. The same, presumably, goes for Brian McNamara, head of the consumer healthcare division.
Neither individual was named in the letter, so Elliott is playing things gently. It’s not calling for heads to roll, just for a “robust” selection process to be run.
GSK’s board may find that formal requirement easy to negotiate. Since chairman Sir Jonathan Symonds has already publicly backed Walmsley to continue, it may say the work has been done and reopening the issue would be a distraction from the demerger.
One suspects there will be a few more rounds left in this saga, but Elliott, sitting with a sub-5% holding, needs supporters to make a difference. It’s probably correct that the post-demerger revenue and profit targets should be more ambitious. But, for better or worse, the mood elsewhere in GSK’s shareholder ranks doesn’t currently feel rebellious.
A thoroughly deserved defenestration at JD Sports
He laid down his job for Peter Cowgill’s bonus. That’s the summary of Andrew Leslie’s time as chair of JD Sports’ remuneration committee: he’s been booted off by the independent shareholders, meaning those that aren’t the Pentland Group, the 51% owner.
Defenestration is thoroughly deserved. Authorising a fat bonus to the executive chairman in a year in which JD accepted £100m of Covid support was a serious no-no.
Cowgill, recipient of a £1.3m annual bonus and £3m on his long-term scheme, thanked Leslie for his “valued contribution”. It would be rude not to.