RBS Chairman Hampton to join GlaxoSmithKline

Updated 25 September 2014
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RBS Chairman Hampton to join GlaxoSmithKline

LONDON: Drugmaker GlaxoSmithKline has confirmed it had chosen Philip Hampton, who currently chairs Royal Bank of Scotland, as its next chairman.
Hampton will take the helm at Britain’s top pharmaceuticals group at a testing time. GSK was hit last week by a record $489 million fine in China for bribing doctors and has warned on profits in 2014 due to weak sales of its core respiratory drugs.
He will join the board in January, become deputy chairman on April 1 and chairman with effect from Sept. 1, 2015 — or earlier if released from other commitments.
The long handover reflects the difficulty of replacing Hampton at RBS ahead of next May’s UK general election, given the fact the bank is 80-percent state-owned and the government will take a keen interest in the appointment.
Reuters reported on Monday that GSK was under pressure to make changes, including a possible early replacement of the current chairman, Chris Gent, as a result of its problems which have undermined investor confidence.
A person close to the process had previously said that Hampton was set to be named as GSK’s chairman this week.
Several investors see the board change at GSK as overdue — Gent has been in the job for nine years — and analysts at Goldman Sachs believe a new chairman could “kick-start” change.
Gent, best-known for leading mobile phone company Vodafone during a period of rapid growth, was due to retire by the end of 2015 and the drugmaker said it had been planning for his succession over the last two years.
Before RBS, Hampton chaired supermarket chain Sainsbury and was group finance director at Lloyds TSB, BT Group, BG Group, British Gas and British Steel.
GSK will be hoping that the move placates investors while giving its pressured Chief Executive Andrew Witty time to turn around the business.
Witty, a veteran GSK insider who was appointed CEO by Gent in 2008, has been viewed as a star manager for much of his six-year tenure. But he has been tarnished by the China scandal, which forced GSK to make an abject apology to the Chinese people last week.
As the new chairman a key task for Hampton will be to help steer the drugmaker back to sustainable growth and, in the longer term, potentially finding an eventual successor to Witty.
GSK’s share price performance has lagged badly in recent months. While the Stoxx Europe 600 health care sector index has risen by around a fifth this year on optimism over new drugs, GSK’s shares have lost 11 percent as forecasts for its sales and earnings have fallen.
The company unveiled a far-reaching asset swap deal with Novartis in April that will build up its strengths in vaccines and consumer health, in exchange for exiting the hot area of cancer medicine.
But many analysts believe that even after the Novartis deal closes next year the new-look GSK will still struggle to grow as rapidly as its peers.
Possible actions to improve matters could include further cost-cutting and allocating more capital to buying in promising new drugs, Goldman analysts said, with a long-term option being to sell off the vaccines or consumer health operations.


US calling European cars a threat is ‘frightening’: Germany

Updated 11 min 2 sec ago
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US calling European cars a threat is ‘frightening’: Germany

  • ‘If these cars ... suddenly spell a threat to US national security, then that is frightening to us’

MUNICH, Germany: German Chancellor Angela Merkel on Saturday labelled as “frightening” tough US trade rhetoric planning to declare European car imports a national security threat.

“If these cars... suddenly spell a threat to US national security, then that is frightening to us,” she said.

Merkel pointed out that the biggest car plant of German luxury brand BMW was not in Bavaria but in South Carolina, from where it exports vehicles to China.

“All I can say is it would be good if we could resume proper talks with one another,” she said at the Munich Security Conference.

“Then we will find a solution.”

A US Commerce Department report has concluded that auto imports threaten national security, setting the stage for possible tariffs by the White House, two people familiar with the matter said Thursday.

The investigation, ordered by President Donald Trump in May, is “positive” with respect to the central question of whether the imports “impair” US national security, said a European auto industry source.

“It’s going to say that auto imports are a threat to national security,” said an official with another auto company.

The report, which is expected to be delivered to the White House by a Sunday deadline, has been seen as a major risk for foreign automakers.

Trump has threatened to slap 25 percent duties on European autos, especially targeting Germany, which he says has harmed the American car industry.

After receiving the report, the US president will have 90 days to decide whether to move ahead with tariffs.

Trump in July reached a trade truce with European Commission President Jean-Claude Juncker, with the two pledging no new tariffs while the negotiations continued.

Brussels has already drawn up a list of €20 billion ($22.6 billion) in US exports for retaliatory tariffs should Washington press ahead, the commission’s Director-General for Trade Jean-Luc Demarty told the European Parliament last month.

The White House has used the national security argument — saying that undermining the American manufacturing base impairs military readiness, among other claims — to impose steep tariffs on steel and aluminum imports, drawing instant retaliation from the EU, Canada, Mexico and China.

Trading partners have sometimes reacted with outrage at the suggestion their exports posed a threat to US national security.