City View with Peter Clarke

Published on Tuesday 11 June 2002 01:00

Space for an outsider

IT is exciting that BAE Systems is rehearsing the opportunity to buy TRW, the US space and electronics group. It is not difficult to see the colonisation of Mars being organised from BAE’s bases in Edinburgh in a few years time.

Can it really be possible that the Pentagon would permit a UK plc to buy up a significant US space contractor?

BAE would not be wasting its management time if it had not been given a wink that a faithful US ally could not be excluded. BAE’s approach would at least be agreeable while the bid from Northrop Gramman is hostile.

BAE’s share price drooped on news of the possible acquisition. This is probably justified. Exploring space is more an adventure than an assured source of profits. The market will also want to see TRW dispose of its automobile operations which are regarded as accomplished but not commercially fruitful.

BAE is the largest defence contractor inside the EU. It would be ridiculous if it was blocked from any deal on the basis that it was a threat to US military and space integrity.

TRW staff have held a competition to choose a name for the first habitation on our nearest planet. It need not be Chicago or Palo Alto or Tucson. How about Leith? Or Darien, perhaps?

Sons of the Sun

MR Rupert Murdoch has indicated he expects the leadership of News Corporation to be shared by his sons Lachlan and James when he is no longer there to serve as helmsman.

He says they have the right balance of skills and like and trust each other. He must know his own sons, but all corporate experience shows families cannot succeed by inheritance.

In his fatherly hopes, it is possible to detect the end of the Murdoch empire, of which News Corporation is the most obvious asset.

However amicable both sons are now, frictions and rivalries will emerge and unhappy compromises will fester into hostility.

Rupert Murdoch mocks the monarchy as the absurd illustration of the hereditary principle. How strange that he has hopes of creating a dynasty that will outlive him.

All News Corp titles will campaign to oppose the euro. Is that sensible? If Australia’s six states had separate currencies would they be richer?

It is comforting that a supremely competent industrialist is as muddled and confused as the rest of us.

Not called for

MOBILE phone operators are busy lobbying for subsidies. The companies complain they paid far too much for their 3G licences for a technology with untested capacity and unknown demand.

There is much talk of their efforts being "strategic" or "knowledge-rich" or "special".

The Government and the Commission in Brussels must resist these clever blandishments. Nobody forced these firms to pay more than was sensible for their 3G licences. They were all caught up in a fad and must now be punished for a simple and expensive series of commercial errors.

The phone companies are asking for direct subsidies, extensions to the licence time horizons or the rescinding of the terms of the auction.

Licence holders could sell their rights. True, they’d get far less than they paid but whose fault is that?