大象传媒

Equity and charity

• Robert Peston
• 30 Jan 07, 10:30 AM

Private Equity's attempt to prove that it is caring and sharing by setting up a new charity has not been the public relations triumph it might have hoped (see what I wrote on 29 January).

If it was intended to demonstrate that uber-wealthy private equity partners are recycling some of the profits they make on buying and selling companies, it is not quite working out that way. One reason is that a chunk of the unimpressive start-up capital of 拢5.1m came from investment banks who were "invited" to make donations. As one banker said to me: "We were very conscious that if we didn't cough up, there would be a material impact on deal flow."

There is no doubt that private equity can have a positive impact on productivity and growth. But its management of what's normally styled as "external relations" is lamentable.

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BA: Heavy turbulence

• Robert Peston
• 30 Jan 07, 10:00 AM

It'聶ll be precisely 20 years since British Airways'聶 shares started trading as a privatised company on 11 February. And although in many ways its story since then has been one of success in a highly volatile industry, the relations between management and employees seem to have been ossified: by British standards, the company is unusually unionised; its trade unions are immensely powerful; and there appears to be considerable mistrust of management among employees.

In all those two decades, only one BA chief executive, Bob Ayling, tried to confront the power of the trade unions head on. And although he succeeded in pushing through changes to working practices after a painful cabin crew , the cost to corporate cohesion was perceived by his fellow board members to have been too great. Ayling was ultimately ejected from the cockpit. The unions may have lost the 1997 battle, but they could tell themselves they had won the war.

For shareholders in BA, the big question is therefore whether the dispute which ended yesterday will make it easier or harder for the current chief executive, Willie Walsh, to respond to the intensifying competitive pressures in his industry. Now for all the talk about consensus and compromise in the aftermath, if I were a trade unionist I would be feeling pretty content. There was overwhelming support for strike action from cabin crew, the company has made concessions in the way it manages sick leave, there'll be an above-inflation pay settlement this year and differentials between the different vintages of cabin crew employees have narrowed.

Now in terms of the financial stability of the company, it's hardly trivial that the settlement improves the prospects for a vital deal to reduce BA's yawning . But it's not obvious that what is arguably the business's great structural flaw -聯 industrial relations that are redolent of the darkling days of the 1970s and 1980s - is any nearer elimination. If I were a shareholder, I might be feeling a little bit airsick today.

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