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REWIND: International Business News #2

Posted on July 20th, 2010 | Author: admin

  • U.S. Moves to Block New BP Oil Leases.  Following the BP Deepwater Horizon oil spill catastrophe in the Gulf of Mexico, U.S. lawmakers are pushing an amendment to ban the U.K. company from obtaining any further oil leases, due to safety concerns.  In addition to being under intense scrutiny in Congress, BP is under investigation by the U.S. Department of Justice and environmental regulators for ignoring safety failures and could face billions of dollars in fines.  Lawmakers may have to be more lenient than some of their constituents are demanding, as the amendment to the oil rig safety bill could harm both jobs and the country’s ability to access domestic resources.
  • Meanwhile, in other U.S./U.K. news, AMR Nears British Airways Alliance as EU Backs Deal.  With the European Union’s antitrust approval, British Airways Plc and AMR Corp’s American Airlines have moved one step closer to forming a trans-Atlantic alliance between the two airlines that will control nearly 50 percent of the flights at London’s Heathrow Airport.  The plan will give both carriers the equal footing and similar advantages that other airlines, such as Air France and Lufthansa, already possess.  BA and AMR have already agreed to relinquish 10 flight slots in the U.S. and U.K., but are still awaiting approval of the antitrust alliance from the U.S. Transportation Department.  The two have been attempting this alliance for years.  Critic and competitor Virgin Atlantic Airways Ltd. says this monster monopoly will only hurt consumers.
  • A “success story” offers a case study on How Not to Run a Business in China.  Lessons can be learned from the broken business venture between American Olaf Kristoffer Bauer and Chinese Yuan Jie, “partners” in the Chinese pizza chain Kro’s Nest.  As a first rule, you need to be clear on ownership structure of the business, which plagued Bauer and Jie.  Second rule, as a foreigner, be fully aware of the rules and follow them accordingly.  You should not let the legal and political intricacies of the Chinese business world lead to disregard for the rules, for that will surely lead to government action.  Finally, foreign entrepreneurs should pay careful attention to establishing their guanxi, or trust network.  Building a solid and trusting guanxi takes years, but the pay off will undoubtedly make it easier to do business in China.
  • Google Escapes with Apology in Australia- May Not Be So Lucky Elsewhere.  U.S. company Google’s apology to Australia gets them out of some hot water for violating privacy, namely inadvertently collecting personal data from unprotected wireless networks via its Street View cars, the device which captures real street views for GoogleMaps imagery.  However, an apology likely will not cut it for everyone or everywhere.  Google is still facing potential legal action in Australia, as well as the U.S. and various European countries.   Governments in these various jurisdictions are undertaking investigations that may result in criminal penalties and various government sanctions against the internet search-engine giant.

Compiled and summarized by Aylin S. Khor