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And this is Andrew Peach with World Business Report here on the BBC World Service.
Good to have your company.
The UK government is about to announce a raft of infrastructure projects to stimulate growth.
It's also going to give its best thing to expanding the country's biggest airport.
The details in a moment or two.
However bad last year was for you, it was probably worse for Boeing.
You cannot overstate what an anus horribilis 2024 was for Boeing.
Boeing almost literally ran out of cash in the fourth quarter of last year.
And why winemakers in California say Donald Trump's plans to deport illegal migrants could devastate their industry.
First, the UK finance minister, Chancellor Rachel Reeves, is set to outline some big infrastructure projects, the biggest of all being a third runway at Heathrow Airport in London.
Now, this idea has been mooted for decades.
It's always been met with planning and environmental objections, which in the end have stopped it.
A new runway would cost tens of millions of pounds and take more than a decade to complete.
Here's Thomas Walbye, who's the chief executive of Heathrow, speaking last week.
If we are to keep pace with economic growth, we need to expand beyond what we can do at the current two runways.
Justine Bailey is a local resident who's concerned about the environmental impact.
It wouldn't be a viable community.
You know, the pubs, the shops will go because there aren't enough customers.
Pollution and noise.
I mean, Sadiq Khan has been working very hard to improve both in London.
We're actually part of London here and we'd like to see the improvements as well.
But business groups say London's missing out by not expanding Heathrow.
Here's John Dickey from Business London.
Other cities in Europe and indeed globally are stealing a march others.
They're improving their connectivity.
They're improving the number of cities they can connect.
The shops will go because there aren't enough customers.
Pollution and noise.
I mean, Sadiq Khan has been working very hard to improve both in London.
We're actually part of London here and we'd like to see the improvements as well.
But business groups say London's missing out by not expanding Heathrow.
Here's John Dickey from Business London.
Other cities in Europe and indeed globally are stealing and marching us.
They're improving their connectivity.
They're improving the number of cities they can connect to directly, and that makes it a competitive advantage for them and a competitive disadvantage for us.
But it's more than just that.
Anyone who's flown from Heathrow recently will know that the airport's absolutely full.
Live to our business editor, Simon Jack, who's here.
Simon, let's just underline the fact the UK government isn't building this runway.
It isn't expanding Hetero itself.
It's just saying it'll look kindly on the idea.
That's right. As you said in your introduction, this has been kicking around an idea since 1968, and the government voted on it back in 2018, and it is still officially government policy that they would approve, would look favourably, as you say, on a third runway.
But it ran into environmental planning, financial feasibility issues.
And then, of course, COVID hit, at which point business travel dropped off a cliff.
And there was uncertainty about the future of air travel in totality.
So it was put on ice.
So tomorrow, Rachel Reeves, the chancellor, will say in her elusive search for growth that she will be open to the idea of a third runaway, very preliminary.
It would cost tens of billions of pounds.
And even if everything went perfectly and they put the planning application in, it got approved in about three and a half years, building wouldn't start then.
It would take several years to complete.
So it's not going to give her any growth anytime soon, but she's trying to send a signal that Britain is open to growth, open to business.
But who's going to pay for it?
Well, in the first instance, Heathrow would borrow the money to pay for it.
and it would cost 20, 30 billion pounds, possibly go right over one of the main circular arteries around London with the M25, which would have to go under the runway.
So, very significant project.
They would have to recoup that money from the airlines and that would in turn be passed on over the next couple of decades to travellers in the form of higher fares.
So, there's an enormously, enormous long way to go on this.
But as I say, they're trying going to send a signal internationally and domestically that they are going to pull every lever they can find in the search for growth.
Because without growth, because they are such long projects, they take so many years, some of these projects don't survive changes in government.
And that is clearly a risk with this one as well.
So, as I say, very preliminary overtures that they would be open to do this.
Other projects much more further down the runway, if you like.
But But this is the one that will catch attention because, of course, she's got her own cabinet ministers who've been very much against it.
Ed Miliband, who's the sort of department for net zero and energy, people will say this is going to make a mockery of their zero carbon ambitions by 2050.
Others would say, listen, there's a carbon budget there.
If Heathrow does get approved and gets built, then other things like, for example, automotive agriculture will have to do more of the heavy lifting to try and get those emissions down, because this will burn up quite a bit of that.
Rachel Reeves will say, listen, if you've got more capacity, airplanes spend less time sort of circling waiting for a landing slot.
You've got advances in aviation fuel.
There's something called sustainable aviation fuel that reduces emissions.
And a number of other mitigating factors can get you there without breaking the bank on all the carbon budget.
But like I say, early tentative steps, but a change in direction and one that Rachel Reeves is keen.
that both domestic and international investors see that she's got an appetite for projects at this scale.
Simon, thank you. Now, lots of the members of Parliament representing areas around the airport are against this.
One MP who's for it is Tandese, who represents the town of Slough on Heathrow's doorstep.
Heathrow, I believe, is the largest single -site employer in the UK with over 90 ,000 jobs.
Thousands of those are from my Slough constituents, So thousands of households are reliant on Heathrow for paying their bills.
And that's why I think a lot of individuals are in favour of that argument.
It's also, of course, Heathrow is the busiest port within Britain.
Over two -thirds of our trade goes through Heathrow, and it's our only hub airport.
And there is a feeling more generally that we cannot fall behind our European competitors, is that whether it's Skippo, whether it's in Paris, Frankfurt, they are pulling business away from London.
So those flights will be taking off regardless of whether Heathrow expansion happens or not.
Just last year, it was a record number of over 80 million passengers going through the Heathrow space already bursting at the seams.
Now, a lot of your fellow MPs, Labour MPs, Conservative MPs in that part of the UK are dead against this.
It's why it's never happened.
It's we still don't have a single spade in the ground.
They worry about aircraft noise.
They worry about increased traffic.
They worry about air quality.
They worry about the environment.
What do you say to all those objections?
That's precisely why I've been pushing Heathrow over all these years on their mitigation measures in terms of more environmentally friendly planes.
So that's using more aviation tools and enhancing our use of technology.
So man, the aviation industry needs to invest in that.
I know that there's a lot of investment in terms of electric power planes rather than based on hydrocarbons.
I think the industry needs to invest in that, and the government needs to support in that regard.
I know there's a lot of work that's being done to reduce noise levels, so that is incredibly important.
By the time that we are talking about a potential third runway decades into the future, several runways have appeared at Schiphol in Amsterdam, whether it's in Paris and Frankfurt.
Those airports, I think they all recognise that planes will be taking off.
And if we look at what's happened, for example, in the Middle East, those hubs have been growing.
So air travel is here to stay.
We just need to make it better, more efficient, more environmentally friendly.
The leading opponent in the coming months and years is going to be the Mayor of London, Sadiq Khan, who's in the same political party as you.
Is he wrong? Whether it's some of my parliamentary colleagues, whether it's the Mayor of London, they will form their own opinion.
They will be batting on behalf of their constituents.
And rightly so, just as I am doing on behalf of my Slough constituents, having listened carefully to their wishes while being cognizant of the need to provide forward growth within our national economy.
So the Chancellor of the Government, I hope, will be making decisions based on willingness for our country.
And that's the MP for Slough in Southern England, Tam Desi, on the BBC World Service.
The US plane maker Boeing has reported annual losses of nearly $12 billion.
It's the company's worst performance in years.
Boeing is suffering the effects of a strike at some of its factories and also faced accusations of compromising safety standards.
Let's get more from Justin Rollins from Liam News and Analysis.
The financials are even worse than anyone could have expected.
You cannot overstate what an anus horribilis 2024 was for Boeing.
You had the door plug that blew off the Alaska Airlines plane.
You had the commercial crew spacecraft that were stranded at the International Space Station.
You had a CEO change.
777X flight testing program ground to a halt.
Union strike, which crippled their production plants.
And then the capstone was a massive equity sale in October.
And what really, the upshot of that equity sale was Boeing almost literally ran out of cash in the fourth quarter of last year.
So it's still one of the huge names in aviation.
It's just when these individual incidents happen, it makes people less likely to invest.
That's right. And investors are showing a lot more skepticism than they ever would have before COVID.
And I would say probably even immediately after COVID.
There's just a real lack of belief that even the new CEO can pull off the turnaround that's required.
Is this all about Boeing?
Or does it tell us something about the aviation sector more broadly?
I would say this is a story that is 80 % about Boeing and 20 % about the sector.
The sector is, of course, prone to materials and supply chain shortages driven in part, although not entirely, by the war between Russia and Ukraine and the sanctions on Russia.
But even with the supply chain issues, the vast majority of Boeing's problems would still have existed.
it. You can only blame so much of the loss and so much of the customer anger and the financial disaster on the supply chain.
When you've got such an established name in the industry as Boeing, can it turn it around?
Can Kelly Ortberg solve all this?
Well, I think that's the $64 billion question, as it were.
There seems to be certainly a sense within the rank and file that Kelly Ortberg has what it takes.
Investors have been favorably impressed with what they've heard from him so far, but he has a gargantuan task in front of him.
And it remains to be seen whether Boeing can rebuild trust, especially from the aviation regulators in the US and Europe.
And is his strategy yet clear?
Because then he's been there a little while.
Can you see how he's trying to turn it around?
It's been light on details, but what we have heard, especially reengaging the workforce and being much more transparent with regulators are frankly the things we needed to hear five years ago from Boeing.
And so it's clear that Ortberg has a much deeper grounding in reality than his predecessors had.
And so the question now is, can he get the regulators and the other stakeholders on board to help execute the new vision?
And certainly he will need to articulate more of that new vision beyond just stating the obvious.
Is it going to be a more cautious approach, do you think?
In other words, just to make absolutely certain insofar anyone possibly can, that nothing goes wrong with Boeing associated with it.
In the short term, I think that's true.
In the long term, it's going to have to be much more of a risk -seeking approach.
Boeing needs to invest in a major new aircraft model because it has nothing in the pipeline.
And for Boeing to have a serious future, it needs to have a new addition, what we call a clean sheet design, added to its product family.
And looking at the aviation sector, people did think, I think, five years ago, four years ago in the pandemic, that maybe aviation was done for, would be in decline, but not so much now.
You know, we're talking about airports expanding, airlines wanting new routes.
So in many ways, the aviation sector is in ruder health than anyone could possibly have imagined?
Well, to borrow a Mark Twain line, the death of commercial aviation has been greatly exaggerated.
And I think it's fair to say going forward that we're going to see the world continue on what is admittedly a new normal, but a much healthier normal than many of the pessimists were expecting in 2020 and 2021.
That was Judson Rollins from Liam News and Analysis.
This is World Business Report with Andrew Peach.
In August last year, the global coffee giant Starbucks announced its chief executive was stepping down to be replaced by Brian Nicholl, head of the Mexican grill chain Chipotle.
Shares jumped by 20 % on that news.
Well, we've now got the fourth quarter results for Starbucks, pretty much in line with what Wall Street was expecting.
Going to talk to Stephen Goldman of Truebird Technologies, a tech company based in Brooklyn, New York, which it says here makes a micro cafe experience in a box.
Stephen, thank you for being with us on World Business Report.
Starbucks is the big beast in your world, in coffee world.
What went wrong and have they fixed it?
So, thank you so much for having me.
A lot has gone wrong with Starbucks, but there's a lot they've done right.
They changed coffee culture forever.
Howard Schultz has really reinvented and invented the coffee consumption that I think we all enjoy time and time again.
And as they look to the future, I think they found a great leader in Brian.
A lot of people have a lot of faith in Brian.
And based off today's earnings, I think a lot of it's excitement and some of it's getting back to the Starbucks we know, which is what he's looking to do.
Give me a bit more on what they got wrong and how they're correcting it.
Well, I think everyone knows the biggest issue has been the in -store experience and their labor issues.
Ultimately, all coffee companies, but Starbucks in particular, has suffered with a lot of issues around quality and time and consistency and labor.
And that is specifically what made us want to start TrueBird and what we're looking to solve.
And I think it's what Brian's also looking to solve in trying to get the wait times down, bring back the human experience.
But ultimately, a lot of Starbucks' growth over the past number of years and a lot of their consumption goes to their pickup on -the -go orders.
If you walk in stores, you see the cups lined up.
And I think that is going to be one of the areas that Brian's going to have to focus on how he corrects because you really lose the human experience there.
And that's what he's looking to bring back.
But that has fueled a lot of their growth and a lot of their earnings.
And it's where we think Truebird comes in.
We've spoken to every international coffee brand and national coffee brand out there.
We're going to be announcing a major roaster in the next few weeks.
And we're looking to solve that specific issue of quality coffee with consistency on the go.
Can you make the experience in the cafes better without making the product more expensive?
I don't see how you could do that.
ultimately labor labor real estate costs and um training all are all things that drive up the price of of coffee it's getting more expensive to live it's getting more expensive to to really go anywhere and people want their coffee but i don't think they're willing to pay ten dollars for it sure so that's
always the balance i suppose because starbucks have got into this situation By adapting their business to the needs of the credit crunch, the pressures on people's incomes in many countries where they operate.
Correct. So we'll see whether Brian Nicholls has some magic to put that right.
Thank you very much indeed for your analysis.
Really appreciate you joining us.
Thank you for having me.
Stephen Goleman, live from Brooklyn, New York, from True Bird Technologies.
Right, let's bring in George now, George Conboy, Chairman of Brighton Securities, to talk about some of the other financial stories today.
Let's talk about NVIDIA.
We spent a lot of time on World Business Report last night talking about this massive record -breaking fall in NVIDIA shares yesterday in the AI sector.
So the credit crunch, the pressures on people's incomes in many countries where they operate.
Correct. So we'll see whether Brian Nichols has some magic to put that right.
Thank you very much indeed for your analysis.
Really appreciate you joining us.
Thank you for having me.
Stephen Goldman, live from Brooklyn, New York, from True Bird Technologies.
Right, let's bring in George now, George Conboy, chairman of Brighton Securities, to talk about some of the other financial stories today.
Let's talk about NVIDIA.
We spent a lot of time on World Business Report last night talking about this massive, record -breaking fall in NVIDIA shares yesterday in the AI sector.
They bounced back today.
It sure did. I think we can spend about 40 % as much time, Andrew, talking about NVIDIA tonight because they recouped about 40 % of yesterday's loss today.
So yesterday, the world was reeling with recognition that everyone had been downloading DeepSeq and thinking maybe the US doesn't have the edge on AI over other countries that everyone thought.
Has everyone revised that view now, now that NVIDIA shares it back up?
and everyone thinking these nvidia chips are actually pretty good i think it may be more that traders tended to think that yesterday was an overreaction deep deep seek doesn't look like they're going to go away but as of today traders seem to believe that nvidia is also not going away there should be
room in the market for more than one player and there are reasons why you might favor one ai product over another so there's there's enough room there and they've come back a little.
The valuation is still not cheap, so I don't think these two days will be the end of volatility for NVIDIA.
Let's talk about defense stocks down today.
This is a story about Lockheed Martin, who made some losses.
Explain to us if you would.
Yeah, nearly a 10 % drop.
It was a nine point something drop in Lockheed Martin today.
They reported their earnings, and a little disappointing, especially because they reported losses, unspecified losses in classified programs.
Now, it's great because analysts will ask, why did you have a loss here?
Why did you have a big gain there?
And they want to know the answers.
But if you're a classified defense contractor, it's easy to say, sorry, top secret, can't tell you that.
Now, I'm sure that they're being accurate in that description, but it doesn't allow traders to evaluate, is this a good bet going forward?
And with news like that, it's sold off Lockheed Martin 9 % as one of the world's largest defense contractors.
They sneezed and the rest of our defense stocks caught a cold today.
One knew the election result and that new inauguration day was coming.
I actually can see what confidence in the US has been falling.
Yeah. Again, that was something that rose, but it's coming back down.
There's a realization that interest rates are not likely to fall and that causes people to be a little concerned if rates not only don't fall, but rise a little bit.
Prices are still stubbornly high.
And a week or so after the inauguration, eggs still cost more money and gas prices are not their one -time low.
So I don't think we're out of the woods on any of those matters yet.
It'll take a little bit of time.
George, thank you. George Conboy, Chairman of Brighton Securities, with us on World Business Report.
Let's stay in the US.
And winemakers in California say Donald Trump's plans to deport illegal migrants could devastate their industry.
Up to three -quarters of the people who work in the vineyards are thought to come from Central American countries and many don't have the correct paperwork.
Now, how about this for a job title?
Jess Lander is the wine reporter for the San Francisco Chronicle.
No one really knows the exact number of undocumented farm workers in California.
However, the numbers are as high as 70 % for the estimations.
I've heard about 50 % is something that's thrown around quite a bit.
So, yeah, it would be huge.
We would basically lose a majority of the workforce that does the bulk of the work to make the wine.
I don't suppose people working in the wine industry are exactly who Donald Trump has in mind when he talks about illegal migrants making American cities dangerous.
But, of course, you've got to cast the rules somehow.
And you're talking about a large number of people in California being caught up in that.
yeah i agree and he's never as far as i know said anything about workers in the wine industry specifically but i think the fear is that california so much of the agriculture workforce it's such a huge agriculture industry so much of the workforce are immigrants and it just seems likely that they could get
tied up in whatever his plans are for whoever he's targeting because they're bound to not have the right paperwork or why yeah a lot of them don't have the right paperwork.
There's a lot of undocumented workers in California agriculture.
I mean, I suppose he is in control and the administration is in control of which states are targeted, of which groups of people are targeted for checks.
Yeah, I think, you know, that's definitely true.
But a lot of times what happens with these checks is others that might not be, you know, with criminal backgrounds specifically, but it just seems likely that they could get tied up in whatever his plans are for whoever he's targeting.
Because they're bound to not have the right paperwork or why?
Yeah, a lot of them don't have the right paperwork.
There's a lot of undocumented workers in California agriculture.
I mean, I suppose he is in control and the administration is in control of which states are targeted of which groups of people are targeted for checks yeah I think you know that's definitely true but a lot of times what happens with these checks is others that might not be you know with criminal backgrounds
specifically but don't have the right paperwork are kind of like casualties of these raids sometimes MAGA supporters would say hang on these jobs ought to be for US citizens.
Are there US citizens available and ready to take them?
Absolutely not for the vineyard work in California wine industry.
And I would say the wine industry is pretty aligned on that.
We didn't have immigrants working in the vineyards.
I don't know who would work in the vineyards.
Right. I mean, I guess the obvious thing is if you don't have enough workers, you can't make the product.
Correct. And we already have quite a big labour shortage in the California wine industry mostly because a lot of the farm workers that have been here for a few decades are sort of aging out they're retiring and their children who were born in the U .S.
are pursuing other career paths they're going to college they're you know they don't want to be in the field so there's already a labor issue and this would obviously compound it greatly.
And in a broader hospitality industry you're talking about the same problem writ large the same groups of people are also keeping hospitality ticking over absolutely and that is a big part of making even the wine industry successful these days you know you go to Napa Sonoma a lot of these wine regions
there's you know fancy hotels and spas and a lot of restaurants that go into making that wine experience kind of go around so and bringing people out to the wineries I guess it's hard to know who in California has the ear of Donald Trump because it's certainly not the governor?
Yeah, it's definitely not the governor.
And I've actually heard from some people that, you know, the fact that him and the governor do not see eye to eye could cause him to actually target, you know, California and also, you know, places like Napa specifically, where he owns property, he actually owns some wineries in Napa Valley.
I don't have an answer for who would have his ear.
I know that a lot of farmers who may have there's kind of an open secret that a lot of people in the wine industry actually are Trump supporters or Republicans and don't think that he would.
