New year, new workplace

Empowered workforces spur innovation, creativity, new ideas

Come next year, forget working out. First, let’s just get the working part right.

In this season of resolutions made, promptly followed by a season of resolutions broken, I think the Indian workplace is in such crisis that we actually all need to resolve—once and for all—to make 2008 the year of the liberated, balanced, empowered, integrated office.

It is easier than it sounds. And Indian managers especially have a daunting challenge ahead.

Consider the dire findings of a study Mint reported on Monday. Indian corporate leaders are far more “task-focused”, less “social” and “participative” than North Americans, according to a survey of 100 managers across India conducted by executive recruitment company Korn/Ferry International, in association with International Market Assessment (IMA) India.

Translation: Indian bosses need to get out of their offices more, get a little dirtier in the ditches alongside their workers, make clearer the mission of their companies and actually show the staff what a flat hierarchy means. And then they need to make sure middle management is doing the same.

Place that imperative against the backdrop of the hypergrowth so many companies are experiencing right now and getting in touch with our softer sides might seem either impossible or the easiest thing to put on hold.

Yet, our survival depends on it.

Cliché as it sounds, empowered workforces are the only way to spur innovation, creativity, new ideas—the stuff that keeps us all in business really. The problem in implementation thus far has been that human resources (HR) departments’ efforts tend to border on the gimmicky. Think of all those useless office worksites that result in sprained ankles from three-legged races or teetering on a wire suspended between two trees.

So, here’s a suggestion for Resolution No. 1: Stop trying to bond us with ropes and handkerchiefs. Leave the races and role-playing exercises to athletes and actors. Instead, retreats should be used to discuss mission and drive its importance home over and over again. Why do we do what we do? For whom are we doing what we are doing? If your employees don’t know the answer to these questions, no amount of agility on a tightrope is going to save them—or your company.

Resolution No. 2: Thank them for working. Feedback, or the lack of it, is often cited as the main reason people leave an employer. Indians suffer from no lack of bluntness (in this festive season, can we also spare the overweight employees asked to dress up like Santa?), but we are sparse in our praise and downright jealous when it comes to stellar performers. Force yourself to regularly see the good— and thank those responsible for it. The words of one worker this week are still ringing in my ears, “I am a simple, easy employee. If you tell me I did a good job, say, once every two weeks, it will make all the difference in my life.” Encourage bottom-to-top evaluations and ban HR jargon such as “360-degree performance measures”.

Resolution No. 3: Pay more than lip service to embrace diversity and family-friendly policies. If your office is currently under construction (these days, whose isn’t?), are you asking the designer to include space for a gym, crèche, a room to pump breast milk for new mothers, smoking lounges so the halls don’t stink? Do you offer paternity leave, too? Are you making the transition back to work easier for new parents, and making sure younger employees have role models who balance work, home and all that falls in between?

Resolution No. 4: Earn the respect you command. We are still far too obsessed with titles and pedigree. I always work harder for bosses who aren’t afraid to slog with me, whose actions implicitly mentor and warrant mimicking.

Resolution No. 5: Stop accepting the way it’s always been. The only way to be different is to, well, do things differently.

Lest you think I just lecture, here’s a glimpse into my workplace goals: In 2008, I will better manage up and down and around. I will pay more attention to star performers and hardest workers and not take them for granted. I will set specific tasks for the meetings I hold; I will show up better prepared for the meetings for which I am summoned. I will seek training or mentors to help me improve on weaknesses. I will take more time out with individual colleagues and family members to listen and learn. I will limit the nights I bring home my laptop—if I must use it, it will be preferably after my daughter has been read to and fallen asleep. I will have one day where I literally switch off, Facebook to BlackBerry.

On 2 January, when we all report back to the grind, I’m hoping to join many of you in starting anew to create new energy at work, unfurling passion beyond the paycheck. From our happiness to our country’s continued growth, much is at stake.

Covet thy neighbour’s pay

Employees with longer tenure might have more seniority—and lousy pay. But can two workers ever be equal?

So let’s say you’re holding the lofty title of deputy senior associate manager and she’s a deputy senior associate manager. She’s in her early 30s. You’re in your early 30s. You oversee four people. She oversees four people. She went to one campus of the Indian Institutes of Management. You went to another.

Should the salaries be the same or different?

In these times of attrition, salary hikes and fast promotions, the answer is not so clear. Chances are, the last person to be hired is making quite a bit more; such is the nature and reality of pay increases in a candidates’ market.

While compensation has completely changed, one thing sadly hasn’t: People at work still talk about how much they make. So, salary looms like the big elephant in the office that everyone knows about and discusses secretly among themselves. Not exactly conducive to creating a harmonious work environment.

Workers themselves are torn on just what is fair. Consider one graphic designer in Mumbai who recently came to discover that someone with his same title—but many years senior —earns about the same.

“He is about twice more experienced than me in terms of the number of years he’s put in,” he said. “I have come to know that his salary and mine are not very different.”

Was he proud of being at the top of his industry’s game? Not really, he said, sounding rather depressed. He felt like he didn’t have a whole lot to look forward to if he stayed on in the company.

“Large companies do underpay people, which is not fair,” he said. “That’s the reason people never wait for increments and prefer to move on for better ‘jumps’.”

Indeed, even as I think young workers are doing themselves the greatest of career disservices as they jump from job to job, a look at the disparities in salary yields the fact that they often have little choice. In some ways, that’s also why the culture of discussing numbers—in addition to the one upmanship rampant in corporate India—persists.

Is equal compensation for equal work possible? No, because there’s no such thing as equal work.

In the words of one manager, “Communism and socialist view on salary does not work in India. Even employees…will want their ‘fair’ share more than others in their peer group.”

Salary is a complicated formula, or perhaps not a formula at all. Managers varied when I asked how they arrived at salaries, but cited one common parameter—what someone was earning before. And even as the guy with the most tenure at a company becomes team leader first, he’s often viewed with a certain scepticism, as though he remains because no other options exist.

“Whenever you have to go out and hire individuals, you end up providing a 30-40% increase to make the move competitive. Many individuals, irrespective of proficiency, end up landing at the higher end of the compensation band,” said Sandeep Chaudhary, a business consulting leader at Hewitt in Mumbai.

His solution is actually not to throw money at good people but reward them with perks and responsibility. “What organizations don’t do a great job of is communicating rewards. It is the least understood topic by business managers today,” he said.

The worst offenders, the managers I spoke to largely agreed, are human resources managers who gossip about the different compensation bands among employees. To combat this, employers should drive home the negative impact this can have on a workplace, even as they assure employees transparency in the areas it can be offered—opportunities, training, job postings and other incentives.

“People do compare and share notes on their packages. I am sickened by it as an employer, but employees relish in it. Smart ones know it hurts them more in the long run. Show-offs don’t last long,” said Prashanth V. Boccasam, the head of Pune-based Approva Corp., a firm that makes auditing software.

The truth is that no two workers are created the same—whether they make widgets or make software. As India becomes a major player in the global economy, two things must happen to ensure our treatment of our own workers is just. First, they need to be paid fairly to begin with. That means looking at the company’s bottom line and ensuring there’s some justifiable division of wealth, and that per employee spending remains higher than peer firms—and salary represents one part of that spending. More importantly, workers need to be given an incentive to stay beyond money, even as they understand why they earn what they do. Underperformers are not underpaid.

Offer fair salaries, responsibility and opportunities to shine—and the work ethic should rise proportionately. The stellar output alone should silence those who complain.

Googling a nation’s pulse

In India, the search engine has come to represent a window into jobs, exams, opportunity, a desirable life

Growing up, my brothers and I always made fun of one particular phrase my parents and relatives used: Latest.

The definition was pretty much literal—hip, cool, trendy. But its grammatical applications I questioned.

“Her saris are always different, for each occasion,” would say my mother. “She is the latest.”

“Kuch Kuch Hota Hai was too good. Ek dam latest,” would say my cousin, piling Indian-ism upon Indian-ism.

Now, the folks at Google have given us a global equivalent and new moniker for the intangible idea behind latest: zeitgeist. (Fittingly, the word that means “spirit of the times” and exudes a certain robust universality comes from the German.)

Last week, the search engine giant that made its brand a household verb released its top 10 lists of fastest growing searches worldwide. This year marked the first that India got its very own Google Zeitgeist.

By the looks of it, we are obsessed with Mahatma Gandhi and Sania Mirza, technology and Aishwarya Rai. We love our Orkut and holidays in Kerala.

But after browsing with interest the lists, divided by terms, celebrities, athletes, politicians and places, I somehow felt the latest zeitgeist really doesn’t represent the pulse of this nation. It does not capture the tier II cities or the dichotomies of New India that everyone has become obsessed with understanding lately. Every other day, I field an entrepreneur’s phone call asking for help making sense of it all (free consulting, basically). I politely decline, citing a conflict of interest as a journalist.

But the lists, coupled with the end-of-year impulse to assess progress and make projections, spurred me to delve a little deeper. I bypassed the aggregated data that makes up the Zeitgeist and looked into what we are searching for day to day, using a tool known as Google Trends, unveiled in May 2006. Google Trends essentially neatly organizes which nations search for what and which are the most popular searched terms on a given day or week.

Take, for example, the week ended 21 November: four of the 10 top trends were related to teachers recruitment board exams. One trend was a website for government staff selection, while another related to the common admission test (CAT). Another was the National Institute of Industrial Engineering.

For comparison’s sake, on the same day, the US top trends included the high-profile murder of a woman, road conditions in Iowa and how long a turkey should be cooked in the oven. (It was the day before Thanksgiving.)

The key difference, of course, is that ours is an aspirational economy. Theirs is already there. (Whether you actually want to be cooking turkeys and obsessed with the weather is another thing altogether).

On Christmas Day, Google Trends shows that the Americans wanted to know about a tiger killing a tourist at the San Francisco Zoo, the retailers and restaurants open on Christmas, and sales for the next day.

In India, we too got into the holiday spirit, asking about Christmas and New Year SMS-es and how many reindeer Santa Claus has. But we also wanted to know about the Railways Recruitment Board in Ranchi and how best to file our taxes.

The day-to-day trends strike me because they conjure an image of hordes of youth in cyber cafes hungry for opportunity, watching the clock to ensure they don’t go a minute over an hour. I picture people who still see jobs at railways and public sector undertakings as safe bets, who might not realize the possibilities that await in a private sector craving talent as it never has before.

I asked Vinay Goel, head of products for Google India, what he made of the difference. He cautioned that the Zeitgeist is intentionally aggregated and summarizes year-long trends and search terms, not the most popular day in and day out. He also notes a distinction in content sought in India and the US.

“Where is the local electrician, plumber?” he asks. “The local electrician here has never been on the Internet. …What I see happening now is a lot of people are trying to get a lot of that basic local information. …The US folks don’t necessarily use Google as much as a navigational tool.”

While he meant navigation in the technical sense, it’s an apt metaphor for what a search engine still means an India—not to bake a turkey or chance upon some grisly photos of victims of violence—but a road map for life. Really, it is an apt metaphor for the India that still is.

This economy is often framed as one facing an acute talent shortage. Google Trends tell us we need to rethink this notion. Clearly, a large segment of the population is attempting to leverage technology to gain access. For all who gripe about the dearth of talented candidates, it is a reminder that we must meet the Googlers halfway, perhaps help them become the latest, too.

To use a fork or fingers?

Talk weather, don deodorant, don’t blow nose into a cloth napkin. Is new workplace etiquette just the West’s rules?

Stop burping. Only disclose your salary to your mother. Don’t tell your colleagues they are fat, dark or have bad skin.

Finally, a book has crossed my desk —issued by a company, no less—that is actually blunt, useful and relevant, even necessary, for the modern Indian workplace.

In fact, the long list on page 33 of InCorporate: Communication etiquette for today’s workplace makes abundantly clear why such rules are needed. In a section devoted to the art of making small talk, the book advises Indians which topics to avoid.

Consider the banned: politics and religion, personal health problems or misfortune; stories and jokes of questionable taste; remarks about ethnic, racial or gender groups; gossip and hearsay; controversial issues such as abortion; intimate details about yourself or others; one’s income or the price of personal things.

If your family is anything like mine, we breeze through most of those subjects by morning tea.

And so this 103-page guide, published by Standard Chartered’s business processing unit Scope International Pvt. Ltd, offers insight into why assimilation can be so tough for new entrants to the workforce.

Over the last year, we officially became a nation obsessed with “soft skills”. Company after company decries the sorry state of the Indian education system, as well as the lack of exposure of new hires from lower-rung institutes and second-tier towns. The nature of networking and interaction —in and out of the office, the personal becoming professional—is changing rapidly. The chap who doesn’t remember which knife butters his bread warrants forgiveness—and instruction.

Scope International released the book just about one year ago, a part of its desire to give new hires “a strong foundation for stepping into the demanding lanes of corporate life,” writes Scope chief executive Sreeram Iyer in his introduction.

Noteworthy is that little of the book dwells on Scope’s internal ethos or systems. These days, far too many human resources managers seem stuck in the yesteryear of training for lifelong service to one employer or orientations about the mundane: Please download all 56 expense forms off our intranet. The canteen serves vegetarian cuisine on Tuesdays. All leave requests must be cc-ed to the new department of authorized absences.

So, Scope’s straight talk is refreshing. “…be a ‘solution provider’ rather than a ‘reason-giver’,” it advises. Do not instantly hit reply all on emails. Avoid composing emails when emotional or angry. Do not blow noses into cloth napkins; they are not handkerchiefs.

The cellphone etiquette section ought to be adopted by every office and posted as mission statement: Turn phones off during meetings. Avoid long songs as ring tones. (My addendum: Take the device with you as you roam the office or the bathroom.)

Scope spokesperson Shashi Ravichandran notes a difference among workers. “Soft skills are one such area which builds their capability and confidence and grooms potential managers and leaders,” she said. “It helps their development by enabling them to communicate effectively and adapt to multi-cultural landscapes.”

And yet as I came to certain commandments, such as “Thou shalt not eat with thy fingers” or “Thou shall respect two feet of personal space,” I began to wonder if what is becoming accepted as workplace etiquette is really a misnomer for Western etiquette.

What prevents us from dipping into the fish curry or mutton biryani with our hands because, practically speaking, that really is the best way to debone, eat and enjoy? And is it really rude to slip into mother tongues when the urge strikes? Can we see the silver lining in some elements of our unique Indian behaviours; bluntness as a plus point, perhaps? 

The answer is ultimately dictated not by cultural supremacy but business. If a client is Western, then leave the Tamil behind and just bring on circuitous conversations about the weather. But if a client is Indian, is there a need to lose ourselves?

Ravichandran assured me Scope doesn’t want “change in our personal traits which make us stand apart as individuals, but change in our style of communication and an international approach to work practices.”

If 2007 wound down with a rebuffed Ratan Tata demanding respect and an apology from Orient-Express (with a name like that, sensitivity seems the last thing to expect), let this year begin as the one where office integration works both ways, or perhaps several. It’s not a bad idea for educational institutes to hand out new rules for the workplace with diplomas, and for companies to do so along with offer letters—with the caveat that exceptions must exist in a world trying to understand India as much as the reverse.

But East or West, the verdict on Kajra Re as ring tone is clear. It is globally accepted...as annoying.

When US catches cold, Detroit has pneumonia

General Motors Corp., Ford Motor Co. and Chrysler Llc. needed an uneventful 2008 to consolidate their recent restructuring efforts


This year is already shaping up to be another tough one for Motor City’s car makers. So empty are their factories of new designs that the most talked about vehicle of 2008 is Indian manufacturer Tata Motors’ $2,500 (Rs1 lakh) “people’s car”—the Tata Nano—which isn’t even on show at the North American International Auto Show in Detroit this week. The Detroit auto show goes on through 27 January.

The outlook hardly looks rosy. General Motors Corp. (GM), Ford Motor Co. and Chrysler Llc. needed an uneventful 2008 to consolidate their recent restructuring efforts. But it looks like a recession is on the way.

Analysts already expect car production to fall another 5% or more this year. And shareholders are clearly worried, lopping 45% off GM’s stock and a third off Ford’s since groundbreaking deals on health care costs with the United Auto Workers (UAW) in October. But an economic downtown might just work in their favour.

That’s not obviously the case. If consumers postponed buying new cars, it would put further pressure on Ford and GM, which are already likely to burn through $20 billion (Rs78,600 crore) and $6 billion, respectively, in the next several years, according to Goldman Sachs Group Inc., along with now-private Chrysler.

Furthermore, lower sales would crimp earnings at their finance units, which would also have to increase reserves against souring loans. But a dire economy, lasting a year or so, could empower Detroit executives to push for further cuts in production and staff. Ford chief Alan Mulally has already pledged to reassess output every month.

Tougher action now would be painful in the short term but could leave the companies on a more competitive footing when markets improve.

It would, however, be a high-wire act. Any such moves would probably incur the wrath of the UAW, and risk a debilitating strike. Even if that weren’t to happen, the longer a recession lasted, the more strain it would put on Motown manufacturers’ finances. For one thing, the price of metals and other raw material is still rising, making profits harder to eke out. Moreover, if cars get really hard to shift, offering buyers expensive financial incentives could become alluring again.


These eat into cash reserves, and an industrywide battle for market share would hurt Detroit’s Big Three the most. With their stronger balance sheets, Toyota Motor Corp. and other foreign rivals are much better positioned for a price war. Detroit executives focused on cutting production capacity might fancy the idea of a short, sharp recession, but nothing worse. It’s not, however, much of a business plan.

India-made Suzuki cars to head for Europe next year

Suzuki said it will export 100,000 units a year of the model, which will be based on the concept car A-star that will be unveiled at the New Delhi Auto Show next month


New Delhi: Japan’s Suzuki Motor Co. said it will start exporting a new made-in-India small car to Europe from October next year as it seeks to expand sales in the continent.

Suzuki said it will export 100,000 units a year of the model, which will be based on the concept car A-star that will be unveiled at the New Delhi Auto Show next month, in addition to selling 50,000 units locally. This car will be made only in India, said Osamu Suzuki, chairman and managing director of the Japanese company.

Suzuki is spending Rs10,000 crore in expanding production at its Indian unit, Maruti Suzuki India Ltd by almost one-third, to nearly one million units by 2010 as it seeks to hold on to its 50% market share in Asia’s third largest automobile market.

The new vehicle, which will meet the Euro V emission standards, will have a one litre engine.
Separately, the company will also introduce a larger hatchback modelled on the concept car Splash in Europe next year and at an unspecified date in India, said Maruti’s managing director-designate Shinzo Nakanishi.

Earlier in response to a query on the proposed Rs100,000 car from rival Tata Motors Ltd, Suzuki said: “If there is sacrifice on safety and emission norms, the manufacturer does not truly shoulder the responsibility of an auto manufacturer.”

“As an auto manufacturer of more than 60 years standing, Tata Motors is conscious of its responsibilities, and all its vehicles have met all the norms and regulations of the countries where they are marketed in,” a Tata Motors spokesperson said.

Later in the day when asked to elaborate on his statement, Suzuki said he didn’t want to comment on the Rs100,000 car from Tata or the $3,000 (Rs118,200) car from Bajaj Auto Ltd in partnership with Renault SA and Nissan Motor Co., since he didn’t know the specifications of this car.

Suzuki sells the cheapest cars in the country, at present, the Maruti 800, which retails at Rs200,000.

SAIL, RINL, NMDC plan joint steel plant in Chhattisgarh

SAIL has nominated MECON to prepare the pre-feasibility and feasibility reports. India’s largest iron ore producer NMDC would obtain land, mining leases, statutory clearances for the greenfield project

New Delhi: Steel Authority of India Ltd (SAIL), National Mineral Development Corporation (NMDC) and Rashtriya Ispat Nigam Ltd (RINL) will jointly set up a four- million-tonne integrated steel plant in Chhattisgarh.

The three PSEs, which in April decided to form a joint venture firm for setting up the plant, signed a memorandum of understanding today.

As per the MoU, the three companies would have equal equity participation in the proposed steel plant which would set up on a suitable site selected on the basis of a pre-feasibility report to be prepared by a consultant, it added.

The release, however, did not mention the proposed investment for the project.

Steel major SAIL has nominated MECON to prepare the pre-feasibility and feasibility reports. India’s largest iron ore producer NMDC would obtain land, mining leases, statutory clearances for the greenfield project, the release said.

The MoU was signed by SAIL Director (Personnel) G Ojha, NMDC Director (Technical) P S Upadhyaya and RINL Executive Director (Corporate Affairs and Strategy) M V R Sarma, a joint release said here.

India assures Korea on expediting clearances for Posco

Move comes following fears steel giant may halt plans to start Rs52,000-crore project; firm still faces problems securing captive iron ore mines for 12-million-tonne plant

New Delhi: Amid rising fear that South Korean steel giant Posco might terminate its plans to start its Rs52,000-crore project here due to delays, New Delhi has assured Seoul that clearances for it would be expedited.

The assurance was given by External Affairs Minister Pranab Mukherjee during his just-concluded visit to Seoul during which he held talks with his counterpart Song Min-soon, sources told PTI.

The project, involving one of the largest foreign investments in the country, has failed to take off so far because of delay in clearances from various departments.

While all stops have been pulled out and environmental clearance for the plant given, the South Korean steel giant is facing problem in securing captive iron ore mines for its proposed 12 million tonne plant at Paradip in Orissa.
The PMO, which has been monitoring the progress of the project, has asked the state government to resolve various issues expeditiously.

Mukherjee is understood to have taken up the matter with Prime Minister Manmohan Singh, who holds the environment portfolio and stressed the need for expediting all clearances required to start the project in Orissa.

At the talks between Mukherjee and Song on Monday, the South Korean side stressed the need for early implementation of the project, the sources said.

After the talks, a joint statement said “both sides emphasised the importance of the project and agreed to provide all possible assistance in expediting its implementation.”
The sources said out of 400 acres sought by Posco, 300 acres have already been allocated to the company.

The issues related to reforestation and resettlement have also been settled, they said.
A section in the government feels that continuous delay could force the South Korean company to end its plans, a development that could send a wrong signal to potential investors abroad.

UBI retail branches target lendings worth Rs6,000 cr

The bank will set up 12 small and medium enterprise (SME) ‘saral’ centres with a monthly disbursement target of Rs10 crore

Mumbai: In an ambitious move to increase its retail business, public sector lender Union Bank of India (UBI) plans to disburse around Rs6,000 crore per annum through 32 special retail asset branches. These branches would be set up across India over the next one year and each branch would have a disbursement target of Rs10-15 crore per month, UBI’s chairman and managing director, M.V. Nair, said. In addition, the bank will set up 12 small and medium enterprise (SME) ‘saral’ centres with a monthly disbursement target of Rs10 crore.


The bank is betting big on the SME segment and expects a 35-40% growth in this segment. “We want to aggressively grow our retail portfolio. The SME segment, retail and agri-credit would constitute the three growth engines for the bank over the next three years,” Nair said. The retail asset centres will focus exclusively on pushing the bank’s retail products, he said.

Sony Online denies report that it’s for sale

Mumbai: Multiplayer online games developer and publisher, Sony Online Entertainment Llc., on Sunday denied a newspaper report which said that Zapak Digital Entertainment Ltd, part of the Anil Dhirubhai Ambani Group, was buying Sony Online and said the company was not up for sale.

‘The Economic Times’, citing anonymous sources and an unnamed Zapak official, had in a front page story on 23 December reported that Zapak was set to buy Sony Online for about $300 million (Rs1,188 crore).

“Sony Online Entertainment is not for sale and the report that Zapak is purchasing Sony Online Entertainment is completely erroneous and false,” a company spokesperson for San Diego-based Sony Online said. Sony Online is part of global electronics maker Sony Corp. Reuters
Barclays plans to shore up India retail business

Mumbai: British bank Barclays Plc., which recently infused $70 million (Rs277 crore) into its India retail operations, on Sunday said it was targeting a double-digit market share in the segment.

A late entrant to retail lending, Barclays has aggressive plans to strengthen its footprint in the subcontinent. As part of its strategy, the bank plans to open a branch in Gujarat in the New Year, Barclays managing director, Indian Ocean, Samir Bhatia, said.

“We know the customers well and about the kind of products demanded by this market,” Bhatia said. “Since its launch in May this year, our retail portfolio has been growing very well.”
Currently, Barclays has four branches in the country in New Delhi, Bangalore, Mumbai and Chennai. The fifth branch will be in Junagarh, Bhatia added.

ABN Amro chief says Barclays takeover bid likely to fail

Four days ahead of EGM to mull bids from Barclays and European consortium, Dutch bank says it will not recommend either offer to shareholders

Amsterdam: ABN Amro, at the centre of the world’s biggest banking takeover bid, said Sunday that a three-bank consortium led by the Royal Bank of Scotland would likely beat a rival offer by Barclays.

Four days ahead of an extraordinary shareholders meeting to mull the twin bids, the Dutch bank said it was not recommending either offer to shareholders, but chairman Rijkman Groenink said the Barclays bid would “probably” fail.

When asked outright if he thought Barclays would succeed, he told the Dutch NOS television channel, “probably not”.

“We really have to assume that the markets will not change the coming weeks and accordingly the chance that the Barclays shares will rise enough to surpass the consortium bid are fairly small,” he explained.

The Barclays bid was valued at 67.5 billion euros ($93.48 billion) when it was first announced on July 23, but its value has now dropped to around 60 billion euros because of a fall in the price of Barclays shares. The offer is partly a share swap.

ABN Amro initially backed the Barclays bid but it withdrew support in June after the consortium of RBS, Belgian-Dutch Fortis and Spain’s Banco Santander made a far more substantial offer.
The consortium bid is valued at around 71 billion euros with 90% offered in cash.

But the main reason not to back the consortium offer is because the board of ABN Amro does not want to see the break-up of the bank as envisaged by the consortium.

“As the board of directors we cannot get ourselves to recommend the split up of the bank to our shareholders,” Groenink said.

“ABN Amro will continue to engage with both Barclays and the consortium to facilitate removal of uncertainties and conditions where possible and the ABN Amro boards have offered to support the transition of ABN Amro under both offers,” the bank said in its official advice to shareholders.

“While recognising the strategic benefits of the combination with Barclays,” the ABN Amro boards are “not in a position to recommend the Barclays offer for acceptance to ABN Amro shareholders from a financial point of view,” the bank said Sunday.

It said it recognized the “clearly superior value” of the consortium bid for shareholders, which the bank calculates as giving a 20% premium on the Barclays’ offer.

The neutral stance was in line with analysts’ expectations. “It’s pretty much what we expected,” an RBS spokesman told AFP in London in an initial reaction.

Rival Barclays refused comment on Sunday.

ABN Amro has scheduled a shareholders’ meeting on September 20 to discuss the rival bids, with many shareholders thought to prefer the consortium offer. There will be no votes at the meeting, ABN said.

On Monday, the Dutch finance ministry will announce if there are any objections to the proposed takeover of ABN Amro by the consortium. It gave the Barclays offer the green light a month ago.
Last Friday, a Barclays shareholders’ meeting backed the British bank’s takeover plans.
However Barclays chief executive John Varley stressed at that meeting that the bank was “prepared to walk away if we can’t conclude the transaction on the right terms.”

HDFC net up 76% on stake sale in BPO co

The company declared a net profit of Rs646.39 crore for quarter ended 30 September, against a net profit of Rs368.02 crore in the same quarter last year


Mumbai: Mortgage major Housing Development and Finance Corp. Ltd (HDFC) reported a 76% rise in net profit for the second quarter of fiscal 2008 on the back of the sale of its shares in business process outsourcing firm Intelenet, which it jointly owned with UK-based bank Barclays Plc.

The company declared a net profit of Rs646.39 crore for quarter ended 30 September, against a net profit of Rs368.02 crore in the same quarter last year. HDFC sold its 50% stake in Intelenet to private equity firm, The Blackstone Group, for Rs313.26 crore in July.

Excluding the Intelenet sale, HDFC’s income rose by 23%, to Rs582.44 crore in the second quarter of the current fiscal. The company’s shares rose 9.63% to close on Monday at Rs1,281.3 a share on the Bombay Stock Exchange.

HDFC’s total income for the second quarter rose by 91% to Rs895.69 crore, from Rs470.11crore in the year-ago period. Income from its core mortgage business rose to Rs1,839.83 crore, from Rs1,286.93 crore from the year-ago quarter—a 42% increase. The company’s assets stood at Rs72,665 crore, against Rs56,496 crore for the same period last year—a 26% increase.

Throughout the second quarter, HDFC offered a discounted rate of interest on new home loans, with interest rates dropping from 11.25% to 11%.

In October, the lender cut interest rates by a further 50 basis points for new loans, with rates touching 10.50%. The effect of the latest cut will be felt in the third quarter.

Loan disbursements for the quarter amounted to Rs14,275 crore, as compared to Rs11,280 crore in the same period last year—a 27% increase. HDFC’s loan portfolio was Rs63,446 crore, compared with Rs51,332 crore last year—up 24%. HDFC declared a half yearly profit of Rs1,019.20 crore, against Rs664.84 in the same quarter last fiscal—an increase of 53%, while total income rose by 65% to Rs1,400.70 crore, from Rs846.84 crore in the year-ago period.

HDFC’s board on Monday appointed Keki M. Mistry as vice-chairman and managing director of the company and Renu Sud Karnad as joint managing director.

Tata Nano stirs auto show at Detroit

The vehicle would violate emissions and safety regulations in the US, Europe and Japan, auto executives from those markets said

Detroit: The most talked about car at the Detroit auto show this year isn’t even present: Tata Motors Ltd’s Nano. The vehicle would violate emissions and safety regulations in the US, Europe and Japan, auto executives from those markets said.

The $2,500 (about Rs1 lakh) Tata Nano wouldn’t meet consumer expectations in developed countries for creature comforts such as air -conditioning, they said. Yet, they’re all wondering how to respond to it.

“What we’re seeing really is the automotive world is divided into two distinct markets,” said Bob Lutz, vice-chairman of General Motors Corp.

-Bloomberg

Barclays, StanChart say Asia will weather US slowdown

Singapore: Asian economies will weather a sharp US slowdown in 2008 and avoid recession, supported by domestic demand and backed up by healthy foreign reserves, economists from Barclays Bank Plc. and Standard Chartered Plc. said on Tuesday. StanChart, which is forecasting a US recession this year, said it was sticking with its 2008 growth forecasts for China and India that were made before US recession fears mounted in recent weeks.

“We do not anticipate recession in Asia,” the bank’s chief economist, Gerard Lyons, said. “The US is not as important as it used to be,” he added in reference to the rise of India and China.

Barclays said emerging Asia ex-China will maintain last year’s economic expansion of 7.3%. The bank expects that growth in the US will slow in the first quarter of this year before picking up, bringing full-year growth to 2.3% from last year’s estimated 2.2%. Peter Redward, head of rates research for emerging Asia, said a repeat of 2001—when Asia slid into recession—was unlikely because of strong intra-regional trade and corporate balance sheets.

-Reuters

Vedanta plans steel plant in Orissa

New Delhi: Mining and metals company Vedanta Resources Plc. plans to set up a 5 million tonnes per annum steel plant at an investment of about Rs24,000 crore in Keonjhar district of Orissa.

“We are impressed at the growing consumption of steel in India and are keen to enter its steel sector,” a company official said.

Vedanta is the holding company of Sterlite Industries (India) Ltd.

Meanwhile, Vedanta began the trial run of its Rs3,500 crore alumina plant at Lanjigarh in Orissa. “We envisage being No. 1 producer of aluminium next year in the country,” said Vedanta’s business development head C.V. Krishnan.

-PTI
Apollo Tyres Q3 profit rises 77%, sales up 13%

New Delhi: Tyre maker Apollo Tyres Ltd said on Tuesday that net income gained in the third quarter by 77%. Net income in the three months ended 31 December rose to Rs62.17 crore, or Rs1.31 a share, from Rs35.07 crore, or Re0.79, a year earlier, the company, which is partly-owned by Michelin and Cie, said in a press release.

Sales increased to Rs974 crore , up 13%, from Rs860 crore a year earlier, the company said.
Apollo’s board of directors approved a spending of Rs360 crore for expansion, according to the statement.
-Bloomberg
Bharti Axa to raise paid-up capital

New Delhi: Private sector life insurer Bharti Axa Life Insurance Co. on Tuesday said it will make capital infusion of about Rs50 crore by the end of March.

“We have been making capital infusion once in every two months. The last investment was done in December and the next tranche would be in March,” said Bharti Axa chief executive officer Nitin Chopra. The next investment would be in the range of Rs40-50 crore, he added.
The total paid-up capital of the private insurer stood at about Rs390 crore at the end of December.

The company, which is currently operating from 77 branches across 66 cities, expects to increase the number of branches to 250 by the end of March 2009.

A people’s painful progress

In many ways, the North-East was the perfect place to be in the days that the world arrogantly fretted over how a cheap car might ruin everyone else’s happiness


On the day The People’s Car made headlines across the world, I bumped along the dirt road leading to my parents’ house in Guwahati in a rented precursor, the Tata Indica. I passed the home of a neighbour—a man hired by banks to seize and resell cars when owners cannot keep up with payments—and noted the number of vehicles parked in his yard had increased, as it does every time I visit

With cups of tea and coconut sweets, my family and I gathered around the television to watch the coverage of the New Delhi Auto Expo on NE TV, a north-eastern television channel. Far from the detached, sophisticated airs of the major metros, the newscaster marvelled as she rendered the story. Even my illiterate paternal grandmother seemed to recognize that she had witnessed yet another historic moment in her 85 years divided between rural and urban India.


Because my connectivity tends to be limited in these parts, I missed the extensive coverage of Tata’s hyped Rs1 lakh Nano in the Western press. Upon my return to New Delhi, my inbox burst with the complete opposite of the euphoric atmosphere I had just experienced:
“It Costs Just $2,500. It’s Cute as a Bug. And It Could Mean Global Disaster.” That was a headline from an opinion piece in The Washington Post.

An excerpt from The Associated Press: “Tata Nano will lead to possibly millions more cars hitting already clogged Indian roads, adding to mounting air and noise pollution problems.”
A headline from The New York Times: “Indians Hit the Road Amid Elephants.” That one struck home as my family once owned four elephants, contracted to haul timber and scrap. When the last one died, my uncle took the insurance money and bought a city bus. Steady as they were, elephants had no role in the urban economy my rural relatives sought to enter.

Thus, in many ways, the North-East was the perfect place to be in the days that the world arrogantly fretted over how a cheap car might ruin everyone else’s happiness. As the Auto Expo unfolded in New Delhi, Guwahati was plastered with billboards advertising another auto fair to be held next month.

According to the R.K. Swamy BBDO Guide to Urban Markets, based on 2004 data, Assam is ranked third in car ownership per capita; Kerala holds the top spot, followed by Gujarat. Meanwhile, the nearby Nagaland capital of Kohima boasts more cars per person than any other city of India.

There are multiple, complicated reasons for these statistics, from tax breaks to ready loans to militants and civil servants flush with black money. But what has struck me in a half-dozen visits home over the last three years is that progress is actually under way, partly triggered by all the cars: wider roads, new flyovers, national highways. To compete, bus transport actually has gotten better and connects more far-flung places. As I have written before, much remains to be done and road conditions in the rural North-East remain abysmal and crumble under floods. But the frantic pace of development reflects the government’s recognition that things could no longer continue the way they were —just as my family realized when they traded contracting elephants for a bus.

It is an example worth offering to the sceptics who suddenly purport to care about the environment or our congested roadways (we also might want to add that we have seven or eight cars per 1,000 people, while the US has more than 400).

“This is a democracy,” Vishnu Mathur, executive director of the Automotive Component Manufacturing Association of India, told me. “Infrastructure responds to demand.”