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Good morning from the Financial Times.
Today is Wednesday April 30th, and this is your FT News briefing.
Wall Street is not super optimistic about U .S. GDP, and Japanese investors have their fingers crossed that one deal could spark a wider shake -up.
Plus, apparently Gen Z doesn't hate the idea of working in the office.
They do want the opportunities to learn in person, but they don't want to be in the office five days a week necessarily.
I'm Mark Filippino and here's the news you need to start your day.
Donald Trump is offering some tariff relief to carmakers.
The U .S. president said yesterday his administration will do this through a rebate system.
Companies will be exempt from paying extra tariffs on steel and aluminum on imported car parts.
The rebate kicks in on imported parts if companies assemble the vehicle in the US.
They'll get a small percentage of the 25 tariff back.
This announcement comes just four days before the administration was set to impose the tariffs on imported auto parts.
Prior to this several car companies had pulled, or drastically lowered, their profit guidance, GM on Tuesday stopped share buybacks and blamed tariff uncertainty.
Japanese carmaker Toyota Motor wants to take one of its subsidiaries private.
That news sent the country's markets into a frenzy this week.
The deal would be worth $42 billion dollars and investors are betting that this could overhaul Japan's wider corporate landscape.
Here to explain is the FT's Tokyo Bureau Chief, Leo Lewis.
Hi Leo. Hi there. Hi.
So what would this plan look like?
Well, we're still very much in the early stages of being able to answer that question, but it actually looks like the driving force behind the deal is Akio Toyoda, who's the chairman of Toyota Motor.
The interesting relationship between this and its subsidiary, Toyota Industries, is that Toyota Industries was actually the original company.
That was the company that started the whole Toyota story.
It became a subsidiary, but what it is really is a listed manufacturer on behalf of Toyota of certain things and it has the world's best forklift truck.
So it's a really interesting piece of the Toyota corporate grouping.
And the idea of taking it private is one of the most interesting deals that we've seen in Japan for a very long time indeed.
And tell me more about that, why would it be a big deal if it prompted other buyouts?
So Corporate Japan at the moment is something that has been of rising interest to private equity because there are so many kind of mismatches between valuation, reality and the idiosyncrasies of the Japanese market.
And what's happening here is that in a way, you've got the biggest and most famous Japanese company, which is Toyota saying, look, maybe we need to sort of address the issues that are going on with our corporate structure.
And that is of huge interest to investors who've been looking at Japan and saying, look, all this place really needs is a big shakeup.
And so the symbolism I suppose of having you know the biggest company, the most famous company in Japan, leading from the front with a very significant piece of corporate reorganization is something that other companies may seek to emulate, but certainly investors will be very excited to see that pressure rising on CEOs across corporate Japan.
Now, Leo, where did we see the most investor excitement for this proposal?
The first reaction by investors was to look at this situation with Toyota and go look, if this is happening with an important subsidiary of Toyota, then maybe we'll look at the other affiliate companies and subsidiaries of Toyota and wonder whether maybe those will end up doing something similar or they'll be involved in something similar.
So a lot of share prices of Toyota related companies were really rising very quickly on Monday.
But you also saw in the periphery of this some very significant share price moves in companies where there was sort of similar structures, big Japanese industrial companies like Sumitomo Electric, and others where they've got listed subsidiaries and the idea now is perhaps that shareholder pressure and other factors have combined to push management into rethinking the way that they set everything up and the way that things are structured and the idea now therefore is that you would have quite a lot of deals perhaps happening over the coming months and years as Japan sort of reorganizes itself
to be a little bit more shareholder -friendly and perhaps a little bit more better -governed in sort of corporate governance terms. Okay, so there's a lot of hype about this potential deal.
What are the chances it actually happens?
The interesting thing about it is that unlike some other deals that we've seen where the very big Japanese banks have been a little reluctant to lend, this one seems a good deal more straightforward you've got Akio Toyoda as I say the chairman of Toyota motor.
He's as it were a good bet for those banks.
And so when the banks look at this deal, this actually looks like something that could potentially happen.
Yeah, that's the fts Leo Lewis.
Thanks, Leo Thank you very much. Wall Street banks are predicting that U .S. GDP actually shrank in the first quarter.
Back in March, companies were rushing to stockpile goods ahead of Donald Trump's tariffs and official data released on Tuesday showed the gap between imports and exports stood at about 162 billion dollars.
That could prove to be important when calculating gross domestic product, and it's what caused JP Morgan, Goldman Sachs, and Morgan Stanley to predict it's going to be a drag on GDP.
We'll see how close their estimates were to being right first quarter GDP figures come out today.
We've probably all heard the stereotype that Gen -Z does not like to work in the office.
Turns out, that is very wrong.
Gen Z is actually driving the return to the office.
So maybe they don't hate water cooler banter and casual Fridays are all right with them after all.
My colleague, Emma Jacobs, writes about work and careers for the FT. She joins me now.
Hi, Emma. Hi. So Emma, how widespread is this notion that Gen Z workers, those workers in their late teens and in their twenties, prefer working from home?
I mean, I think it's quite pervasive and we've had the likes of Jamie Dimon, the chief executive of JP Morgan Chase, they were leaked recording of him saying to a meeting that the young generation is being damaged by this being at home, they're being left behind socially, and that he wasn't going to take any kind of nonsense from people pushing back.
So I think that sort of set a tone and anecdotally, I guess there's quite a few stories from people saying, I mean, I spoke to somebody recently who said that they were trying to get somebody come into the office, but she couldn't come in because she was waiting at home for her parents delivery to arrive.
And so it's just this, you know, anecdotes are great, but they don't tell the whole story.
Well, is there actual evidence that young workers want to work in person?
Yeah, they do. I mean, there was a survey from JLL, which is as readers have pointed out a property company, and they have a motivation to get people into the office, but also, I they just tracked people that were coming into the office and they found that younger people were more inclined to come in.
I mean, that is also partly a property problem, which is that young people don't have amazing homes to live in and also they do want the opportunities to learn in person, but they don't want to be in the office five days a week necessarily.
I mean, some do, some don't, but you know they're people like you and me Mark.
Yeah, I definitely don't want to be in the office five days a week, that's for sure.
But, you know, what are they looking for, Emma?
I mean, what is it about the office that makes it attractive to younger workers?
I mean, I think that the office being not in their homes is part of it.
So I just want to reiterate that that is poor housing quality stock.
Yeah, and also they want to meet people that they can kind of learn from, but also are good for their network.
What the pandemic did teach, and some of the companies are still doing this, is that you can do a combination.
You can have in -person teaching, casual teaching, serendipitous chat, but you can also do that intentionally over virtual meeting.
How are companies trying to figure out strategies to address the lack of mentorship opportunities challenge?
So some of them are doing mandated office returns.
Some are doing partial, you know, in on Tuesday, Wednesday, Thursday, what doesn't work, I guess, is that people just coming in willy -nilly and hoping that they'll see somebody else that they might learn something from.
So I guess that it's trying to create, you know, anchor days, setting up networking opportunities, and you can create fewer places where people have to go into so that then you're not spread across a kind of dispersed geography, fewer offices total.
What does this all tell you about the future of in -office work, Emma?
I think it's still a work in progress.
And I think that the thing is, even five years after the pandemic, with the Jamie Dimon mandate to come back and young people aren't learning.
I feel like, and I've heard it from other companies where CEOs have done mandates, that actually it's not based on evidence that people want to come in five days a week, or even that it works and it necessarily is a profitable kind of productivity hack for the company.
But it's the kind of desire to return to things as they used to be.
And it's a shame to throw out the kind of flexibility, but also it's sort of experimental side that seems to be happening after the pandemic.
And I guess that we still don't know what the future is.
Soterios Johnson Emma Jacobs writes about work and careers for the FT. Thanks so much Emma.
Emma Jacobs Thanks.
Soterios Johnson See you around the office.
Emma Jacobs Thanks.
Soterios Johnson You can read more on all these stories for free when you click the links in our show notes.
This has been your daily FT News Briefing.
Check back tomorrow for the latest business news.
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