Sunday, January 18, 2009

The Brits do envy well, goodwill, one hell of a problem

One of the UK's papers has a story ' Heathrow runway backers got special BA privileges'. The 'expose' shows that " the heads of several big companies that called for a third runway at Heathrow are members of a confidential British Airways club of elite businessmen who receive special favours. They are served by a team of BA staff who cater for their every need".

Reading further it emerges that BA has a special 'Premier' card for leading corporate Chairmen and others. The heads of WPP,Diageo, and Deloitte are all mentioned.

What is it about the Brits that makes them so envious? I'd be really worried if BA wasn't looking after the heads of major multi-nationals in a special way. With their huge travel budgets and international operations it would be positively remiss of BA not to court the heads of these corporations with premier treatment.

The airline has of course been doing this for at least twenty years so it may be stretching a point to claim that this is why business supported a third runway. Perhaps British companies just want a modern infrastructure base?
Trust is vitally important for business. One of the worrying issues about the current downturn is the destruction of trust in long established franchises. Old established companies like Merrill's, Lehman's and Bear were all thought to have an institutional memory that would enable them to police themselves and prevent excess. If they weren't able to police themselves then who can? What price can be applied for goodwill on corporate balance sheets in future?
Article on US credit losses in the WSJ shows Goldman estimates of $1.1 trillion for residential mortgages,$390 bn on corporate debt,$234 bn on commercial real estate,$226 bn from credit cards and $133bn for auto loans. When faced with numbers this big, why is there any surprise that banks are being nationalised?

No comments:

Post a Comment