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Hello and welcome to World Business Report on the BBC World Service. I'm Will Bain. Thanks for being with us. Coming up on the programme today, in the last hour or so, Saudi Arabia and the United States have announced a number of economic tie-ups during President Trump's trip to Riyadh. We'll be live in the Gulf shortly to find out what they've been chatting about.
Also today is African business leaders meeting Cote d'Ivoire. How do they see the United States when it comes to trade and economic development? We'll hear from the CEO forum in the capital, Abidjan, and the international airline hoping AI can cut flight delays. AI is in our everyday life. If you look at the complexity of airline operations these days, it's quite obvious that you start thinking about getting AI
Yeah, plenty for us to get to. Fascinating conversation there with the Chief Operating Officer from British Airways. So if you've ever been stuck, stranded, perhaps you're listening to the World Business Report podcast as you wait for a delayed flight now. Perhaps it could be a thing of the past, or if not a thing of the past, then certainly reduced with the help of AI. We'll be chatting about that a little bit later on in the programme. As I say, we'll be in the Gulf shortly as well to hear about
That Saudi-US trade deal, which does include, it appears, an enormous arms deal, sale of arms from the US to Saudi Arabia and a pledge for massive investment.
We're going to start with another pretty grim day for the Japanese car maker Nissan and in particular its workforce as the company announced a further 11,000 layoffs around the world as it continues to struggle with the rapidly changing global car industry. Brings the total amount of layoffs they've announced in the last two rounds since November last year to 20,000 worldwide. Fiona Sincott is with us. Fiona, Senior Markets Analyst.
at City Index Fiona great to have you back on the programme thanks for being with us thank you this is a company that we've talked about its woes quite a few times it feels like on the programme in the last four or five years so this news today not a total shock but the scale of it and its ongoing problems interesting nonetheless
Yes, completely. And I mean, you know, if we think about this announcement, obviously it comes in the wake of Trump's trade tariff and the wars and the challenges that that brings. But I think, you know, as you pointed out, the challenges for this carmaker was actually sort of in place well before that. It's been hit repeatedly.
hard by low-cost competition from Chinese car makers. And it's reported a loss of $4.5 billion for the year ending 30th of March. So, that just highlights the extent of what we've seen. Obviously, there was some restructuring that had been in place. And now they're sort of looking at what to do next. And the scale of these job cuts, as you pointed out, are much larger than what
we were expecting. Yeah, we'll have a look at the routes ahead as well with Fiona in a moment because that has had an impact on Nissan's share price today. But first of all, for a bit more background, we spoke to Katrina Hamlin. Katrina is a financial columnist covering the Asian auto sector for Reuters Breaking Views, who spoke to us from Hong Kong.
I was not particularly surprised. So the company reported a net loss of $4.5 billion for the financial year that ended in March. I know that sounds pretty bad, but they had already revised down their profit forecast, I think, four times in the last year. So we knew that they were in great difficulties.
On the plus side, they shared more details of their turnaround plan and there was some good news on that score, I think. Yeah, and we'll talk to us about that, I suppose, and incorporate within that what they think's gone wrong, what you and other observers think has kind of gone wrong. It's been a string of problems, really. I guess it started around the time their former chairman, Carlos Ghosn, was ousted.
Thank you very much.
So they've been struggling in terms of sales. Their sales numbers have fallen quite dramatically. And then more recently, their margins have really suffered as well. Their new CEO, Ivan Espinosa, said today that basically they've got to the point where their fixed costs are higher than they should be given where their sales are at.
So they had to make some pretty serious changes. Right. Talk to us about the turnaround plan then. And do you get the sense that we're at the bottom here, which I suppose is the key next question from the company? Yeah, it's a really hard question to answer. Have they thrown the kitchen sink at us or not? But they've definitely made a much more serious effort than they have done in the past. So to give some context, they said they're going to lay off about 20,000 people and close seven of...
of their 17 factories. And that essentially doubles the targets that were set by the former CEO back in November. So it's a much more kind of decisive effort to cut their costs.
Ideally, they would also improve their sales, but that is much, much harder to do, especially in this environment where you've got tariffs weighing on the US market, which is still their largest market. I think that will help them a lot. Although, you know, it remains to be seen whether they can do that in a tight timeframe and change things for the better in a matter of, you know, a year or two. And you've mentioned Carlos Ghosn there. He, of course, at the centre of one of the other kind of tensions, I guess, they've had in terms of
of being part of these sort of conglomerates and tie-ups and alliances between some of the big car makers to try and get the kind of financial firepower needed to make that kind of shift in EVs in particular that you mentioned. Lots of question marks about where it sort of goes, what kind of partners it looks for now as well. Is that essential from your point of view? Does it have the kind of financial muscle to get back in this race without partnering up with someone?
I've had a couple of views on this. There are people who think that they should kind of put their own house in order before they go for a partnership. And I can sort of see the sense in that because, as I'm sure you know, they were discussing a merger with Honda very recently. That didn't work out. And basically, it lost a lot of time that they could have spent getting on with their turnaround and doing other things. But then on the flip side...
As the industry electrifies, scale is probably more important than it's ever been. If you don't have scale, then it's really, really difficult to electrify in a profitable way. And they have said that they are going to continue thinking about partnerships and exploring different ways of working with different partners.
Thank you.
Yeah, you know, often we do see this when there are large scale cost cutting processes or large scale sort of headcount reduction that can be considered to be a positive in the sense that, you know, it's kind of the beginning of the end of the problems. Yeah.
getting costs under control and taking a very serious effort to do so. So I think that's obviously one of the things. Obviously, then there's also the backdrop as well of the sort of more encouraging news surrounding trade tariffs globally that may have helped that rise in the share price as well. Yeah, absolutely. They're a fascinating company, as Fiona says as well, about just the general travails of the car industry, full stop and sort of
future ahead for that too. We're going to talk a little bit of trade and tariffs now as well. We've been talking a lot about trade barriers in the last few weeks on the programme, but President Trump has been kicking off his three-day tour of countries in the Middle East, talking about deals instead.
Yeah, official welcome there for President Trump following in his own footsteps because in his first term he also chose to kick off his overseas visits in the region as well. So what are the US president and his host Saudi Arabia hoping to get from the week and talks our Middle East correspondent Samir Hashmi joins us from Jeddah in Saudi Arabia. Samir, great to have you back on World Business Report. Thanks for being with us.
Likewise, thank you for having me. There's been a few announcements today. Before we come to kind of the details, talk us through what President Trump's been up to.
Well, President Trump arrived in the morning in Riyadh. He was welcomed by Saudi Arabia's Crown Prince Mohammed bin Salman. They had a bilateral meeting after that. Mr. Trump has brought with him a huge entourage, which includes prominent CEOs, Wall Street CEOs and other technocrats who are part of this entourage. So you have Elon Musk, who's given him company, along with some of the big CEOs from BlackRock,
Even Sam Altman is here accompanying him. So he's really got a Wall Street Titans and a galaxy of business leaders from the United States as part of
This really signals that it's all about deal-making and investments. And that's what we heard later in the day after both the sides, Saudi Arabia and the United States, signed a host of agreements, economic cooperation agreements. Yeah, talk us through some of those deals in a bit more detail, because as we're chatting about right at the top of the program, arms seem to be one, but also a kind of investment pledge in the other direction from Saudi.
from the Saudis, presumably towards some of those companies led by some of those leaders you were talking about? So, yes, the big headline number is that Saudi Arabia has agreed to invest $600 billion in the U.S. economy. It's in a host of sectors. Yes, defense is on top of that $140 billion deal, which would include the U.S. selling arms to Saudi Arabia. That would include air missiles, aircraft, state-of-the-art aircraft,
training, helping them with setting up a lot of academies. So it's a host, a huge list in that. But it's definitely one of the biggest deals signed by the United States with any country as far as defense goes. We're still waiting for the specifics of the deal, but the other sectors that would include investments would be energy, which is also right up there. Space programs, because Saudis are playing a very active role in that. We are hoping to hear something on technology because Saudis are investing big time
in AI and technology. In fact, just yesterday, the Saudi Arabia's conference announced the launch of a new Saudi AI company.
So we're waiting for specific details on that front. There is a buzz that the U.S. might announce easing of restrictions on exports of U.S.-made AI chips to Saudi Arabia and the UAE on this trip. But we are waiting for official confirmation on that. Yeah. In fact, in the time that we've been speaking, Samir, on our live page that people can follow too on bbc.com.uk,
forward slash news and you can hit the headline there. Looks like exactly as you're saying, a $20 billion investment pledge from Saudi Arabia in artificial intelligence data centers around the US as one part of this deal as well. You've been getting a bit of reaction too from other kind of analysts in the Middle East as well to what's been going on today. Samir, what have they been telling you?
Well, the number is huge because if you talk about $600 billion, that's larger than the size of the Saudi economy, the figure.
And Saudi Arabia has been facing a lot of challenges because oil prices have plunged, which has really put pressure and created budgetary challenges for them. But Saudi Arabia is also opening up its economy. It's investing a lot in various sectors as it tries to diversify its economy away from oil. So is this number realistic? Can the Saudi Israeli invest $600 billion? I spoke to Karen Young, who's a leading Gulf expert at the Middle East Institute based in Washington.
These are very big numbers. You know, they're not really realistic in terms of what would flow in direct investment. It's about sort of long-term strategic investment in the United States. But yes, he wants the announcement. He wants to have a big poster in a meeting that describes, you know, where these investments might go and some estimation of what they do in the American economy in terms of job creation or his big push, of course, on domestic manufacturing.
Karen Young speaking to Samir there. So where does President Trump go next, Samir? Because we mentioned it's a couple of days he's continuing to travel around the region to some of those big economic centres. Well, that's right. So today he is in Saudi Arabia until tomorrow. Tomorrow he'll be attending a regional summit where he's going to meet leaders of the Gulf states. And then he's going to fly to Doha, which is Qatar, where he's going to be meeting the ruler of Qatar. And then on
The last day of his trip, which is the 15th of May, he will be visiting Abu Dhabi. So these are the three countries, Saudi Arabia, Qatar and the UAE, the three big giant economic hubs of this region where President Trump is going. And yes, he's expecting to sign and announce some more deals during the next two days. Yeah, interesting, isn't it? That it's not about tariffs with these. It's about...
in both directions too, gone from kind of the defensive to the offensive. Very interesting, isn't it? Samir, thanks so much for the updates there. Samir Hashmi speaking to us from Jeddah.
Wow.
No, completely. And I mean, I think it's also, you know, President Trump really wanted to make a big song and dance about this as well, given all the bad news that we've been having over most of April regarding trade tariffs. Obviously, things really do start to feel like they're turning a corner this week. So, yeah, this is really encouraging news. I mean, if we just even have a look at sort of that chip news forecast,
is really helping sort of, you know, stocks such as Nvidia, which had been, you know, one of those stocks that had been really hard hit by sort of trade tariffs and fears over tariffs, is up over 5% today. So we're seeing a big reaction. Yeah, it looks like in the opposite direction as well. The United States having to export gas turbines, other kind of energy solutions to...
to the Saudi Arabians and also selling Boeing 737 passenger jets as well worth just shy of $5 billion as well. So it'll be interesting to see what Boeing's share price does over the afternoon. We had, Fiona, as you mentioned, I guess the kind of bounce back yesterday on stock markets all around the world from the US-China kind of trade truce. Where are we today more broadly in sort of company stocks and share news?
Yeah, so I mean, if we just have a look at the US to start with, I mean, we're seeing US tech stocks, so the Nasdaq 100, that's recovered again. It rose 4%, 4.3% yesterday. It's up a further 1.2% today. So really strong gains. Again, helped by obviously this news that we're hearing from the Trump deal with Saudi Arabia, but also because we're still seeing that recovery, I think, from those fears over that trade war.
Yeah, we saw a bit more of that, didn't we? I'm looking at some wires coming down again since we've been on air. Chinese finance ministry to pause the 24% tariff rate on US goods for 90 days. China finance ministry to cancel additional tariffs imposed on US products. More drip drip coming from those weekend talks.
Yes, exactly. And that's the drip drip that the investors want to see. That's what the market wants to see. So as I said, US is broadly higher. We saw even Europe has managed to put in a few gains as well. The DAX was trading up around its all time high still. So yeah, we are seeing the mood has definitely improved to where we were just a month ago.
The one cloud, if not a fully black cloud yet, then a sort of ominous one, you know, the type of one where you think, am I going to have to run in from the garden as this one comes along? Is this US inflation data, isn't it? Because that's been the worry about what all this tariffs news was doing. It was muted. We've just had it in the last hour or so, but there was sort of an ominous element to it.
Yes. So, US inflation was actually slightly cooler than expected, down at 2.3%, down from 2.4%. Interestingly, this is the third straight month that it's actually come in cooler than expected, which is encouraging. However, I think the thing to bear in mind here is that
you know, this potentially could start increasing now as we go out and we see those impacts of tariffs. Those next data sets are certainly going to be things that are going to be higher up in the programme than where we've mentioned it today, I think, exactly as you say. Fiona, great as always to get your insight. Fiona Sincotta there, Senior Market Analyst at Citi Index in London. You're with World Business Report on the BBC.
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Well, let's take you to Abidjan in the Côte d'Ivoire, where over 2,000 CEOs, investors, heads of state and ministers are gathering at the Africa CEO Forum. The event focuses on the pivotal role private sector can do in driving Africa's economic development. We caught up from the conference with Titian de Couray. Titian is the director at the Emerging Africa and Asia Infrastructure Fund at the global investment firm 91.
The U.S. is a strategic partner for Africa. It has always been and it will as well. Of course, the recent announcement has had some negative impact. But rather than discussing the negative impact, I think the focus is more on how Africa can mobilize internal resources.
How could Africa tap into other partners, focus on the South-South? Tell us more about that, because we were actually talking to Nazir Razak, who heads up the business council for ASEAN out in East Asia on the program at the back end of last week, talking about exactly the same kind of thing. I guess minds refocus to markets closer to home. So what are you hoping to hear? What are you hoping to talk about in that regard?
I think in that regard is the pursuit of new partnerships. The needs are huge across the continent, across sectors, infrastructure, healthcare, social infrastructure, in the water, in the transportation, on the logistics.
It's 1.3 billion, you know, population continent projected to grow even further with huge needs across both and also private sector participation across both. First, locally, how African entrepreneurs can step in and also, you know, invest in projects. And round us out then, what would look like a good couple of days for the forum? What would...
What kind of success do you think? Some of these opportunities ahead on the infrastructure space, which will support further the connection across African countries and support that intra-trade that is required so much. Institutions like the Emerging African Asian Infrastructure Fund have been supporting some of these fantastic initiatives.
opportunities. There is a wonderful project that we backed about a cross bridge between Zimbabwe and South Africa reducing significantly the waiting time just between these two neighbouring countries. These are the sort of concrete action, more projects like these that we need to see across all countries. Well, just follow up with one on that then, Tidiane, as well, if you can. What are the barriers to that? Is it
having, I guess, partners that you believe you can rely on to put up their stake as well, that they're going to go ahead with it, that they're going to smooth out things that you can't smooth out on the ground. Is that what enables more of those projects to come along?
Most people think raising capital is the hardest thing. I would say no. There is capital to back projects. What we need are bankable projects being developed by local sponsors, champions, international players, developing this project to the point or stage where the final capital will come in. But for that, you also need a state of governance that is enabling investors
private sector entities to take the risk to think about ideas about projects and try to implement that. You have so many things that are happening at the same time. It is a bit challenging to just pinpoint one item, but
We just need coordination across all this, from governance, from transparency, from stability. Moving from just one country to the next, a change of regulation, you completely have different roles. Africa needs consistency. Africa also needs to think about
the big game about joining forces together for scalable projects. For big investors, sometimes projects about Africa are too small. But what is preventing neighbouring countries sometimes to join forces and putting together one project? So it's a combination of several things, but Africa is achieving great stuff. We just need those things to happen more quickly and more efficiently. Tidiane de Couray there of the global investment firm 91, speaking to us from Abidjan in the Côte d'Ivoire.
Now, a familiar photo for weary travellers. You drag yourself through the security queues and into a packed airport departures terminal, only to be confronted by this. Your flight will be delayed due to late arrival of the aircraft. Thank you for your patience and understanding.
The dreaded flight delay, but one of the world's biggest airlines now hoping if not to make that sound a thing of the past, then certainly less frequently played because British Airways reckons it's making huge strides in cutting delays thanks to the use of AI. It's been a big investment, £100 million, more than $130 million in what they call operational resilience, i.e. cutting back on things like delays. But it appears to be working with a boost, according to the airline Acero.
and the number of flights leaving on time from its main base at London's Heathrow Airport. And BA's Chief Operating Officer, René Ducrute, told us more.
All the data we have to start visualizing with dashboards, the data that at least everybody that has to make decisions on the day sees the data. Then the next thing is you automate all the repetitive tasks. And then you get to the point where you can start thinking about optimization. We talk about AI, we talk about machine learning, prediction models, algorithms.
And that's what you need to start optimizing. And the biggest nice thing that we did and what we're still doing and what is really important in operations is prediction models. If we can predict when an aircraft comes in late to Heathrow, we might give that aircraft a little bit more time before it goes on its next flight. If we have a flight that goes from Heathrow to Amsterdam and back,
That flight, when it comes back at Heathrow, has another flight after that. But if there is low visibility forecast in Amsterdam, we know that it will pick up delays in Amsterdam. So then we predict that delay. We make sure that the next flight from Heathrow, it has more time and it doesn't get a flight that has only a very short turnaround at Heathrow because we know it will be late for its next flight. Right. So it doesn't sort of take away the delays completely because it's fascinating how it works.
But it sort of stops the knock-on effect of those delays to lots of other flights as well. So it means you've just got sort of one flight that's impacted rather than 10. Exactly. A lot of things that we cannot prevent, we cannot change the weather in Amsterdam. But what we can do is influence the outcome and influence as much as we do ourselves, all the things that we can influence, we should influence. And that's why AI comes in. Right. And so it's not just weather, presumably, that it's pulling, but what?
air traffic, so you know how busy it is, delays at other airports, all that kind of stuff as well. Delays are very much traffic on another airport, why an airport has restrictions, or much traffic on the routes that we fly. In Europe, it's quite congested in peak summer, but it can also be because we have a technical problem in a station, and that flight will be a little bit later back in Heathrow as well. And so how does it pair up with...
with human beings. Human beings were probably presumably doing a lot of those tasks before. And yet I imagine from the way you're talking about it, there are still things that your team...
at BA are still having to do as well? You know, if there's a strike somewhere or something, only a human being can know about that and plot that out? Or how does the sort of teamwork work between the tech and the people? This is not about replacing people. This is giving our people the best opportunity and the best tools to make the best decisions. Because that single flight to Amsterdam we talked about where it's fog, that's the only thing that's happening in our network.
a person can do that as well. But if you are dealing with over 700 flights a day, then coming to the best solution for the whole system, for the whole network, that is difficult for an individual because typically people make decisions
You can handle a couple of variables at the same time as an individual if you make a choice. AI, the machine learning, the capabilities can take all the variables at the same time and make that optimum solution. And that's brilliant. Yeah. And...
clearly having an impact as you guys have outlined today. Just in terms of that as well then for other kind of, it's not just the airline industry, is it? You could use it for a whole bunch of things in the way that you guys are using it by the sound of things as well. The cost benefit, obviously extremely expensive, really the startup of all of this and all the energy and everything it uses. But do you think sort of down the track that cost benefit in terms of the seesaw will shift in kind of your favor? Yeah.
I think it will. It is expensive. And I think we haven't done brilliantly in the past. And these tools help us serving our customers and living up to that promise that we deliver to them.
That's the chief operating officer of British Airways, René de Groot, there on their use of AI to try and cut delays. Really interesting, wasn't it? Just about it from us here on World Business Report. Remember, Sam Fenwick and the team will have the late edition of the programme and the podcast is available, of course, wherever you get yours from every day of the week. But thanks to our team today. You've been Hannah and Victoria. Stephen has been helping them out. And Patrick has been driving the programme, making sure you hear all of our contributors. Thanks so much for listening.
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