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Trump and Juncker set for tough talks on trade – business live Sergio Marchionne, saviour of carmaker Fiat, dies aged 66
(35 minutes later)
Fiat’s chairman, John Elkann, has told staff to build on Sergio Marchionne’s legacy, saying:
“The best way to honour his memory is to build on the legacy he left us, continuing to develop the human values of responsibility and openness of which he was the most ardent champion.”
Marchionne was one of the boldest business leaders of his generation, says the Financial Times.
Here’s a flavour of the FT’s obituary, just published:
The 66-year-old, who died from complications following surgery, was a consummate dealmaker, known for his nonstop work habit and razor sharp mind.
A poker player, his entourage told of sleepless transatlantic flights where their chain-smoking boss always wanted to play — and win — another hand of cards.
The same passion defined his improbable rescue of Fiat via an audacious merger with Chrysler that saved both companies and created the world’s seventh largest car group.
He persuaded General Motors to pay $2bn to escape its alliance with a near bankrupt Fiat in 2005 before swooping on a distressed Chrysler in 2009 and executing a full takeover of the group in 2014.
The FT also points out that Marchionne enraged Italy’s unions by slashing costs, and jobs, as he pushed to return Fiat to profitability:
He was demonised by Beppe Grillo, founder of the anti-establishment Five Star Movement for his closure of plants and job cuts. At one political rally in Milan, Grillo led the crowd in a chant: “F**k you, Marchionne”.
In private, Marchionne was acutely aware of the ravages that globalisation had on those left behind.
Sergio Marchionne deserves great credit for his work rescuing Fiat since becoming its CEO 14 years ago, says Bloomberg:
Marchionne was handed an automaker that lost more than €6bn ($7bn) in 2003. By 2005, he had returned the company to a profit by wringing some $2 billion from an alliance with General Motors Co., laying off thousands of workers, introducing new models, and slashing the time it took to get a new car to market to just 18 months, from four years.
In 2009, U.S. President Barack Obama’s administration announced that Fiat would take control of Chrysler LLC, rescuing the American company from bankruptcy.
“I don’t care what a tough guy he was to work for, he saved our company,” said Cass Burch, a Chrysler and Jeep dealer in Georgia. “He deserves a bronze statue.”
Newsflash: Sergio Marchionne, one of the titans of the global car industry, has died.
This very sad news comes just four days after Marchionne, aged 66, suddenly resigned from Fiat-Chrysler, the company he had run for 14 years, last weekend.
He reportedly suffered an embolism while undergoing shoulder surgery.
FCA Chairman John Elkann said in a statement:
“Unfortunately, what we feared has come to pass. Sergio Marchionne, man and friend, is gone.
During a highly successful career, Marchionne turned Fiat around - including a merger with America’s Chrysler following the financial crisis. He was known as a passionate workaholic who turned two struggling carmakers into the world’s seventh largest automaker, through relentless negotiating and cost-cutting.
As Bernstein analyst Max Warburton put it earlier this year.
“Sergio Marchionne’s time as CEO of Fiat is already the stuff of legend.”
Evercore analyst George Galliers agreed that Marchionne was a real talent, saying:
“Marchionne is good at execution, strategy and gamesmanship.”
Sergio Marchionne has died, according to La Repubblica. Very sad. He was only 66.
Britain’s stock market has slipped into the red this morning, as investors await the Trump-Juncker meeting in Washington DC.Britain’s stock market has slipped into the red this morning, as investors await the Trump-Juncker meeting in Washington DC.
The blue-chip FTSE 100 has dropped by over 40 points, or 0.55%, wiping out much of yesterday’s rally.The blue-chip FTSE 100 has dropped by over 40 points, or 0.55%, wiping out much of yesterday’s rally.
Mining stocks are among the top fallers, reflecting worries that global growth (and demand for commodities) will suffer from a trade war.Mining stocks are among the top fallers, reflecting worries that global growth (and demand for commodities) will suffer from a trade war.
Trade concerns are still prevalent in the markets, says Mike van Dulken of Accendo Markets, adding:Trade concerns are still prevalent in the markets, says Mike van Dulken of Accendo Markets, adding:
In focus today will be the Trump/Juncker US-EU meeting in Washington, an attempt to resolve the recent trade confrontation. Trump is looking for concessions on EU exports to the US (especially cars). Juncker wants a full suspension of US tariffs before any deal can be agreed.In focus today will be the Trump/Juncker US-EU meeting in Washington, an attempt to resolve the recent trade confrontation. Trump is looking for concessions on EU exports to the US (especially cars). Juncker wants a full suspension of US tariffs before any deal can be agreed.
Trade commissioner Cecilia Malmstrom has tweeted that she had “good discussions” with various US politicians.Trade commissioner Cecilia Malmstrom has tweeted that she had “good discussions” with various US politicians.
She met with Republican house senator Paul Ryan, and Democratic leader Nancy Pelosi, yesterday to press Europe’s case, ahead of today’s crunch meeting with the president.She met with Republican house senator Paul Ryan, and Democratic leader Nancy Pelosi, yesterday to press Europe’s case, ahead of today’s crunch meeting with the president.
Good discussions in DC yesterday with @SpeakerRyan, @NancyPelosi, @OrrinHatch, @RonWyden, @JohnCornyn, @RepKevinBrady & @davereichert. Meeting @USTradeRep and @SenBobCorker today, before accompanying President @JunckerEU to the meeting with President @realDonaldTrump. pic.twitter.com/TPUq5Z8bFWGood discussions in DC yesterday with @SpeakerRyan, @NancyPelosi, @OrrinHatch, @RonWyden, @JohnCornyn, @RepKevinBrady & @davereichert. Meeting @USTradeRep and @SenBobCorker today, before accompanying President @JunckerEU to the meeting with President @realDonaldTrump. pic.twitter.com/TPUq5Z8bFW
Former officials expect today’s White House meeting between Trump and Juncker to be tense, says Politico.Former officials expect today’s White House meeting between Trump and Juncker to be tense, says Politico.
“The negotiating view of Donald Trump is unconditional surrender of the other side,” said Ivo Daalder, who served as the U.S. ambassador to NATO during the Obama administration.“The negotiating view of Donald Trump is unconditional surrender of the other side,” said Ivo Daalder, who served as the U.S. ambassador to NATO during the Obama administration.
“If you’re a betting person, it’s not going to be a great meeting.”“If you’re a betting person, it’s not going to be a great meeting.”
Paul Donovan of investment bank UBS has a game to play at home: try completing the phrase “Tariffs are the greatest...Paul Donovan of investment bank UBS has a game to play at home: try completing the phrase “Tariffs are the greatest...
He explains:He explains:
Yesterday US President Trump tweeted “Tariffs are the greatest”. The president may have been muddled, forgetting to finish the sentence.Yesterday US President Trump tweeted “Tariffs are the greatest”. The president may have been muddled, forgetting to finish the sentence.
If implemented, tariffs are the greatest tax increase US consumers face this year. Tariffs are the greatest risk to US employment growth. Tariffs are the greatest threat to US and global economic growth.If implemented, tariffs are the greatest tax increase US consumers face this year. Tariffs are the greatest risk to US employment growth. Tariffs are the greatest threat to US and global economic growth.
Trade war fears are already hurting German companies, according to a new survey just released.Trade war fears are already hurting German companies, according to a new survey just released.
The IFO think tank reports that optimism among bosses fell this month, pulling down its ‘expectations index’ to 98.2 this month, from 98.6 in June. That suggests Donald Trump’s trade policies are damaging Europe’s largest economy.The IFO think tank reports that optimism among bosses fell this month, pulling down its ‘expectations index’ to 98.2 this month, from 98.6 in June. That suggests Donald Trump’s trade policies are damaging Europe’s largest economy.
Ifo chief Clemens Fuest said.Ifo chief Clemens Fuest said.
“Companies were slightly more satisfied with their current business situation, but scaled back their business expectations slightly.“Companies were slightly more satisfied with their current business situation, but scaled back their business expectations slightly.
The German economy continues to expand, but at a slower pace.”The German economy continues to expand, but at a slower pace.”
Expectations of car exports have fallen ‘significantly’, IFO adds.Expectations of car exports have fallen ‘significantly’, IFO adds.
This pulled IFO’s business climate index down to 101.7, from 101.8. However its current economic assessment rose to 105.3, from June’s 105.1.This pulled IFO’s business climate index down to 101.7, from 101.8. However its current economic assessment rose to 105.3, from June’s 105.1.
🇩🇪#IFO: somewhat disappointing compared to the strong (manu) #PMI number in Germany yesterday. But overall, its still a solid report.The exp. fell yet again, now 8 month in a row. The exp. are worrying when reflecting on the soft landing in euro area in general and trade war. pic.twitter.com/DoHeWf1heN🇩🇪#IFO: somewhat disappointing compared to the strong (manu) #PMI number in Germany yesterday. But overall, its still a solid report.The exp. fell yet again, now 8 month in a row. The exp. are worrying when reflecting on the soft landing in euro area in general and trade war. pic.twitter.com/DoHeWf1heN
German broadcaster ZDF reckons there are three ways the Trump-Juncker talks can play out.German broadcaster ZDF reckons there are three ways the Trump-Juncker talks can play out.
Scenario 1: The EU proposes renegotiating all tariffs with the EU, alongside reform of the World Trade Organisation. In return, president Trump would drop his threat to tax EU cars. That would lead to lengthy negotiations, and isn’t the radical solution Trump would favour.Scenario 1: The EU proposes renegotiating all tariffs with the EU, alongside reform of the World Trade Organisation. In return, president Trump would drop his threat to tax EU cars. That would lead to lengthy negotiations, and isn’t the radical solution Trump would favour.
Scenario 2: Juncker proposes a new plurilateral deal just on car sales, which would lower or even abolish all auto tariffs. However it would probably have to include other countries, such as Korea and Japan - complicating the chances of a quick deal.Scenario 2: Juncker proposes a new plurilateral deal just on car sales, which would lower or even abolish all auto tariffs. However it would probably have to include other countries, such as Korea and Japan - complicating the chances of a quick deal.
Scenario 3: No deal is reached, so Trump presses on with tariffs on EU car sales, and the EU retaliates. That would take the global economy closer to a full-blown trade war.Scenario 3: No deal is reached, so Trump presses on with tariffs on EU car sales, and the EU retaliates. That would take the global economy closer to a full-blown trade war.
We shouldn’t expect a big breakthrough on trade today, says Simon French of City firm Panmure Gordon.We shouldn’t expect a big breakthrough on trade today, says Simon French of City firm Panmure Gordon.
He writes:He writes:
Today represents an important test case for the breadth and sustainability of trade frictions as European Commissioner Jean-Claude Juncker meets with US president Trump.Today represents an important test case for the breadth and sustainability of trade frictions as European Commissioner Jean-Claude Juncker meets with US president Trump.
We do not expect a positive read-out and retain our base case that trade frictions will continue to expand all the way to the US mid-term elections in November.We do not expect a positive read-out and retain our base case that trade frictions will continue to expand all the way to the US mid-term elections in November.
Newsflash: Europe is preparing to impose tariffs on $20bn of US imports, EU trade commissioner Cecilia Malmstrom has revealed.Newsflash: Europe is preparing to impose tariffs on $20bn of US imports, EU trade commissioner Cecilia Malmstrom has revealed.
These tariffs would be brought in if Donald Trump follows through on his threat to hit European car imports with new tariffs, says Malmstrom, as she raises the heat ahead of today’s meeting.These tariffs would be brought in if Donald Trump follows through on his threat to hit European car imports with new tariffs, says Malmstrom, as she raises the heat ahead of today’s meeting.
Malmstrom told Swedish daily Dagens Nyheteron (via Reuters).Malmstrom told Swedish daily Dagens Nyheteron (via Reuters).
“We hope that it doesn’t come to that and that we can a solution. If not, the EU Commission is preparing a rather long list of many of American goods.“We hope that it doesn’t come to that and that we can a solution. If not, the EU Commission is preparing a rather long list of many of American goods.
It would be around $20 billion.”It would be around $20 billion.”
It’s not a very diplomatic approach to today’s White House meeting. But perhaps it’s a good way of getting Trump’s attention...It’s not a very diplomatic approach to today’s White House meeting. But perhaps it’s a good way of getting Trump’s attention...
Maybe Malmstrom has been reading Trump’s Art Of The Deal, which recommended taking a tough attitude in negotiations:Maybe Malmstrom has been reading Trump’s Art Of The Deal, which recommended taking a tough attitude in negotiations:
The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you’re dead.”The worst thing you can possibly do in a deal is seem desperate to make it. That makes the other guy smell blood, and then you’re dead.”
Has the Commissioner been studying @realDonaldTrump #theartofthedeal? Begin a negotiation by announcing a massive threat.....Has the Commissioner been studying @realDonaldTrump #theartofthedeal? Begin a negotiation by announcing a massive threat.....
Shawn Donnan, the FT’s world trade editor, isn’t convinced by Trump’s suggestion of abolishing all US-EU tariffs.Shawn Donnan, the FT’s world trade editor, isn’t convinced by Trump’s suggestion of abolishing all US-EU tariffs.
He points out that some American farmers might be unhappy about a surge of imports from overseas, especially as China is now imposing new tariffs on US goods.He points out that some American farmers might be unhappy about a surge of imports from overseas, especially as China is now imposing new tariffs on US goods.
Trump sets the bar high for a trans-Atlantic trade deal... But would US business go for end to all trade barriers? Sugar? Dairy? https://t.co/qOgaiwxOn6Trump sets the bar high for a trans-Atlantic trade deal... But would US business go for end to all trade barriers? Sugar? Dairy? https://t.co/qOgaiwxOn6
Dutch MEP Marietje Schaake agrees that the idea is a stretch...Dutch MEP Marietje Schaake agrees that the idea is a stretch...
Is he setting the bar high or setting the European delegation up for something he knows is not on the table? Especially as long as steel and aluminum tariffs based on national security & threats on cars, are? https://t.co/c2SswG850uIs he setting the bar high or setting the European delegation up for something he knows is not on the table? Especially as long as steel and aluminum tariffs based on national security & threats on cars, are? https://t.co/c2SswG850u
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
They may need to lay out sponges and towels at the White House today, as Donald Trump hosts European Commission president Jean-Claude Juncker for trade talks.They may need to lay out sponges and towels at the White House today, as Donald Trump hosts European Commission president Jean-Claude Juncker for trade talks.
It could be a bruising meeting. Juncker and trade commissioner Cecilia Malmström hope to dial down the rising tensions in the global economy, and ward off the threat of a full-blown trade war.It could be a bruising meeting. Juncker and trade commissioner Cecilia Malmström hope to dial down the rising tensions in the global economy, and ward off the threat of a full-blown trade war.
The talks will centre on the car industry, with Trump threatening to impose tariffs on $50bn of EU car imports. That would hurt the German auto industry hard, and prompt retaliatory action from Brussels.The talks will centre on the car industry, with Trump threatening to impose tariffs on $50bn of EU car imports. That would hurt the German auto industry hard, and prompt retaliatory action from Brussels.
Juncker could propose some concessions; there is talk that a “plurilateral car deal” could lower tariffs could address Trump’s concerns. However, that would be politically tricky, for both sides -- America currently has a 25% levy on European trucks coming into the country, to protect jobs in its rust belt.Juncker could propose some concessions; there is talk that a “plurilateral car deal” could lower tariffs could address Trump’s concerns. However, that would be politically tricky, for both sides -- America currently has a 25% levy on European trucks coming into the country, to protect jobs in its rust belt.
Juncker has said his goal is to “explain and find out how to prevent a trade war”.Juncker has said his goal is to “explain and find out how to prevent a trade war”.
But the signs aren’t great. Earlier this week, Trump tweeted that tariffs are “great”, and claimed America is being treated as a “piggy bank” by countries who run a trade surplus with it.But the signs aren’t great. Earlier this week, Trump tweeted that tariffs are “great”, and claimed America is being treated as a “piggy bank” by countries who run a trade surplus with it.
Overnight, the president has called for both sides to completely abolish tariffs, subsidies and other trade barriers.Overnight, the president has called for both sides to completely abolish tariffs, subsidies and other trade barriers.
That would certainly shake globe trade up - but is hardly something that Juncker can sign off during a quick chat in the Oval Office.That would certainly shake globe trade up - but is hardly something that Juncker can sign off during a quick chat in the Oval Office.
The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won’t!The European Union is coming to Washington tomorrow to negotiate a deal on Trade. I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready - but they won’t!
The stakes are high, though. Trump has already angered Europe by imposing tariffs on steel and aluminium, which led to Europe putting 25% tariffs on bourbon whiskey, peanut butter, motorcycles and blue jeans.The stakes are high, though. Trump has already angered Europe by imposing tariffs on steel and aluminium, which led to Europe putting 25% tariffs on bourbon whiskey, peanut butter, motorcycles and blue jeans.
A rocky meeting could shake the financial markets, warns Lukman Otunuga, Research Analyst at FXTM:A rocky meeting could shake the financial markets, warns Lukman Otunuga, Research Analyst at FXTM:
With escalating trade tensions between the European Union and the United States still a key theme that continues to weigh on global sentiment, the outcome of today’s meeting could leave a lasting impact on the markets.With escalating trade tensions between the European Union and the United States still a key theme that continues to weigh on global sentiment, the outcome of today’s meeting could leave a lasting impact on the markets.
If the talks prove unsuccessful and trade tensions end up escalating further, risk sentiment is likely to be negatively impacted. Market players should be prepared to expect the unexpected from the talks, especially when considering how highly unpredictable the Trump administration can be.If the talks prove unsuccessful and trade tensions end up escalating further, risk sentiment is likely to be negatively impacted. Market players should be prepared to expect the unexpected from the talks, especially when considering how highly unpredictable the Trump administration can be.
The agenda:The agenda:
9am BST: German IFO expectations survey9am BST: German IFO expectations survey
11am BST: CBI survey of UK retail sales in June11am BST: CBI survey of UK retail sales in June
6.30pm BST (1.30pm EDT): President Trump and president Juncker meet at the White House6.30pm BST (1.30pm EDT): President Trump and president Juncker meet at the White House