Fiat shows C&W the right road

JUST at the moment one might have expected Graham Wallace to be heading for the door at Cable & Wireless, the beleaguered chief executive is tightening his grip on the management.

This despite increasing disillusion among big battalion shareholders and bankers. Don Reed, the head of C&W's poorly performing global division, is to be based full time in the United States to support Wallace. This regularises the previous situation where Reed lived in Florida, but was technically working out of London.

Similarly, other executives are being moved around the corporate hierarchy in a way that increases rather than diminishes Wallace's grip on power. All this shuffling of the deckchairs is taking place as C&W businesses come under increasing pressure.

The disclosure that its much-vaunted Caribbean ventures are facing serious new competition will come as no surprise in a global telecoms market bristling with over-capacity. And as if to underline the problems, the bears have been taking a run at Hong Kong-quoted%CW shares, driving down the price in the belief that Wallace may be required to sell his remaining 14.1% stake to raise cash.

Such a disposal, and the neglect of profitable offshoots to support those that are hopeless, is an all too familiar parallel with the past 18 months at Marconi.

One reason why Wallace is allowed to remain at his post is because of claims that there is no one to put in his place. Cynics say he is waiting to be sacked so he can collect a 'golden handshake' that may not be forthcoming if he resigns.

Either way, there is a neater solution. Wallace could follow the example of another troubled chief executive, Gabriel Galateri, who resigned from Fiat yesterday, but says he will remain in the job until a successor is found.

C&W chairman Sir Ralph Robins and the other non- executives please note.

Trade record
WILLIAM of Orange must be spinning in his sarcophagus. Not since he ordered the compilation of trade records in 1697 has this island nation run up as large a trade deficit with the rest of the world as it did in October.

This places those other records beloved of Labour, such as the lowest inflation and interest rates in 40 years, in some historical perspective. As it stretches back over 300 years, it may even meet the Mervyn King test for valid economic data.

The monthly trade deficit reached £3.6bn and, as far as can be told, there were no extra imports of jumbo jets to swell the figures - an excuse once offered by the late Harold Wilson.

The figures provide graphic evidence of the serious imbalances in the economy. On one side, manufacturing is dead in the water, with exports falling to £14.9bn. The biggest decline was in trade with euroland, but business across the Atlantic is also suffering.

This is not that surprising, given the slow or negative growth in large parts of euroland and the stuttering recovery in the US. Matters are not helped by the firm pound, which makes British goods more expensive overseas, particularly at a time of goods price deflation.

Moreover, the exchange rate is not likely to become any more helpful if the new American economic team headed by John Snow begins to pursue a more competitive dollar policy.

On the other side of the trade figures, imports remain firm with the country sucking in £18.4bn of goods in October, more than £200m up on the previous month.

It is interesting to note that imports of consumer goods, other than cars, are starting to weaken. They are down 5% on May, which suggests, as the British Retail Consortium indicated earlier this week, that consumers are beginning to hold back. If a break in voracious consumption is on the way, it could eventually open the door for the Monetary Policy Committee to lower UK interest rates.

But as MPC leaders Sir Eddie George and Mervyn King point out, with housing still bubbling away, we are still some distance from a cut.

Sly move
THE rise and rise of Sly Bailey from classified ads sales girl at the Guardian to chief executive of Trinity Mirror at the age of 40 is a story of our time. The IPC executive who made her name in the glam world of fashion magazines could not be more different from the inky-fingered regional newspaper man Philip Graf whom she replaces.

Experience in selling IPC to AOL Time Warner for £1.1bn should hold her in good stead if a plan to split the Mirror from the regional Trinity newspapers is advanced, or if she sells the whole group (worth much the same as IPC).