Going back a few years now I can remember learning of a new multi-skilling scheme introduced by the powers that be at the enormous Nissan factory near Sunderland in the North East. It began as it always had, in that you would leave school and serve your apprenticeship in a given area of speciality. Up until recent years this was all the learning one would undertake. However, once your apprenticeship has been served they would now encourage further part time training in another two functions, the idea being that work would be more varied & therefore interesting. I’m sure many thought this was brilliant & forward thinking.

So why might I be mentioning this and to what relevance does it have to either investment and/or the current economic climate? Well firstly it comes off the back of another blog I wrote a few days ago regarding the recent buoyancy of the food retail industry so I wanted to diversify my opinions towards an industry that seems to be experiencing the opposite during these harsh times. Do people need to buy food? Of course we do. Do people need to buy cars? No, we do not. Let’s face it, for the majority of us cars are a luxury where as food is a necessity. On this basis the two seem incomparable, but for me both industry sectors had three things in common with the banking sector, being oversight, arrogance and complacency.

We have all known that the cost of oil will rise over the years as it has indeed has done for the last decade. We all know that this will not particularly improve in a hurry either. More and more people such as I living in urban areas fail to see the need to own a car due to the expense and availability of public transport.

In recent months we have seen the likes of Honda announce a halt on production for what will be four months come the end of March. Other manufacturers in the UK such as Vauxhall, Mini & the aforementioned Nissan have initiated other short term closures, the latter also announcing redundancies.

With the European car market showing no signs of recovery, will this just be the beginning for what could become a beleaguered industry in the oncoming quarter(s)? On the day the government announce a second bank bail-out there have been calls in the media for them to follow their example by stepping in to rescue the motor industry also. Personally, I can’t see it.

Yes the recession hasn’t helped at all and this is only too well highlighted by the manufactures of the more ‘top end’ vehicles such as Jaguar/Landrover and Aston Martin who have announced redundancies in addition to production halts at both and also at their rivals, Bentley. Will it stop here? In my food retail article I highlighted the media ‘scare tactics’ by way of their lack of reporting on the acquisitions & investment waiting in the wings but in this case I just can’t see it, the food Retail industry benefiting fortunately by virtue of need.

With seemingly neither private investment forthcoming nor the likelihood of the government stepping in to save the day, I only hope that, in particular for the affected workforce, these companies have learned from the collapse of Rover and have contingencies in place to weather the storm; particularly in the case of Nissan having invested so much in their people. Accusations of oversight, arrogance and complacency are one thing and will be a pivotal factor should things worsen, which will make the oncoming quarters vital to their futures. Where it will really become a key factor is if they hedge their future production plans against the hope that if & when the economy recovers, the industry will follow suit. As oil prices continue to rise & the trains continue to take more of the strain, I’m not convinced it will.

Sterling has taken a dive against its major currency partners as the UK unemployment rate has risen to 6.3%. Global equities are in negative mode after market reaction to the Federal Reserve rescue package was luke-warm, fuelling gains in the safe haven currencies overnight.

Click Here For Currency Solutions

Pound Sterling - UK markets

Sterling has declined across the board overnight as investors favour risk aversion and following news that the UK unemployment rate rose 0.2% in January. Sterling is currently trading at 1.44 versus the Dollar and has dropped to 1.11 against the Euro. The Pound is also down over 1.5% on the Yen to 129.

The UK unemployment rate has risen to 6.3% in January, a 0.2% rise in line with market expectations. This could have a bearing on Sterling exchange rates throughout the day as unemployment is closely linked to personal consumption and business confidence. The former Chief Executives of RBS and HBOS faced the Treasury Select Committee yesterday to explain the failure of the banking system. Under a grilling from MP’s the RBS Former Chief Executive Sir Fred Goodwin apologised for the banks failure yet RBS, of which the taxpayer now owns 70%, later announced 2,300 job cuts. The Bank of England’s £50 billion facility to purchase assets becomes operational this Friday and the Bank’s Quarterly Inflation Report is due today at 10:30 am.

US Dollar - US Markets

The Dollar has gained from an increase in risk aversion overnight yet equities remain in negative mode after details of the rescue package failed to inspire confidence in markets. The Dollar is down to 0.77 on the Euro and has gained 0.6% on the Pound.

Wall Street took a plunge yesterday as the much anticipated speech from Treasury Secretary Timothy Geithner failed to address the tough issues and quell investor fears in the US. In the eyes of investors three factors need addressing immediately by the Federal Reserve; how to stop banks failing, how to alleviate toxic debt, and how to stimulate property and credit markets. Geithner’s speech yesterday was short on specifics and heightened fears that a drop in confidence at this early stage could sabotage the entire package. The Standard and Poor’s declined 4.9% following the announcement and crude oil has fallen back to $45 a barrel amidst unease surrounding the US economy. Trade balance figures are out in the US this afternoon.

Euro – European Markets

The Euro has strengthened overnight, benefitting from the increase in risk aversion and grim UK unemployment figures. The Euro-Sterling exchange rate has climbed to 0.89 and the Euro is up to 1.29 on the US Dollar.

Despite the ascending Euro, equities remain in negative mode this morning, taking their cue from US markets. Switzerland’s second largest bank Credit Suisse, announced a $5.2 billion write down in the fourth quarter of 2008. This is significant in that the bank avoided the worst of the sub-prime crisis, yet was hit by the Lehman shocks in its investment sectors. Credit Suisse is to cut 5,300 jobs and shares plummeted yesterday. Car manufacturer Peugeot also posted losses and this dragged European equities down. The German Consumer Price Index is confirmed at -0.5% this month taking yearly inflation to 0.9% supporting the case for further rate cuts from the ECB in March. There are no major announcements in the Eurozone today and the ECB monthly report is due tomorrow.

Other Currencies - Highlights

Chinese export levels have plummeted 17.5% due to the global recession and these figures have been reflected in the shrinking trade deficits of major Chinese importers. The Aussie and Kiwi Dollars weakened overnight as risk aversion returned and boosted the safe haven currencies as the US bail out plan failed to inspire market confidence. Australian business confidence and unemployment rate is due tomorrow and New Zealand retail sales figures are released on Friday.

Click Here For Currency Solutions

It seems like such a long time ago now, but it was only a matter of a few months ago that Icesave collapsed which plunged many UK savers’ funds into chaos.  Speaking to friends in Reykjavik at the time, they had a collective bleak view of their nation’s economy and were understandably concerned. Therefore it caught my eye flicking through the paper a few days ago when I saw a headline worded something along the lines of “Iceland to the retail crisis rescue”. Hmm, interesting, I thought. Thus I took the time to have a read of this and see what had happened.

Now this you could easily put down to stupidity on my part. However, as someone who neither purchases nor consumes meat products I have not felt the need to enter an Iceland frozen food store for some time! Indeed it was not the country that had made the headline in this instance but the retailer, who announced that they had purchased 51 former Woolworths stores creating somewhere in the region of 2,500 jobs.  As a keen media watcher I can remember the pre-Christmas scare stories of Woolworths demise and the job losses that would arise from it, but isn’t it funny that articles regarding this and other possible acquisitions were kept quiet until now when surely they were already in pending and certainly speculative?

So what of other acquisitions? I have also read keenly that the Co-op group have won approval to take over Somerfield, although in the process have been forced to sell 13 of their own stores, with Waitrose waiting in the wings heading the queue to add these to the 9 others they intend to also open in 2009. The articles reporting on these give approximate figures of between 5-6000 new jobs being created in addition to the thousands who will keep their jobs but simply change uniform.

I will watch this with interest, particularly if the Somerfield brand ceases to be. The shopping arcade by where I grew up is dominated by 2 supermarkets on either side, one Co-op and one Somerfield! Competition has been fierce between the two over the decade or so I lived there and even before when Somerfield was Gateway. Now will there be 2 Co-ops instead?

And it doesn’t stop there either. Waitrose are not the only supermarket chain announcing expansion plans. Sainsbury & Tesco will create around 15,000 new jobs between them this year as they too open new stores and no doubt in recognition of the paradigm shift that has seen many people providing the “less reputed” chains with their patronage recently.

And it’s nice to read isn’t it? We’re in the times of doom & gloom are we not? Personally it makes perfect sense. I’ve long been an advocator of the theory that in times of recession and economic difficulty, recession proof industries continue to flourish if investment is achieved. It’s fair to say that there is a degree of recession proofing when one considers the food retail giants in that we must eat! We must buy food!  Therefore these businesses investing in their futures now should not come as any surprise, and as the economy begins to recover it will be these who prosper further.

Refreshing. Totally refreshing! For the past few days it has been non stop discussion regarding the loss of jobs in the UK due to the recession increasing its cold grip on the country, with Barclays announcing further redundancies, Land of Leather on the verge of calling it a day and major car factories declaring shorter working weeks and months.

But yesterday, one of the leading supermarkets Waitrose announce they will not be making redundancies, quite the opposite, they will be creating another 4,000 jobs this year, with the creation of 22 new stores nationwide.

Waitrose Managing Director, Mark Price, commented:

“I’m delighted to announce the biggest period of growth in the history of Waitrose. There is a real weight of evidence that businesses that continue to invest during tough economic times fare much better when the economy begins to recover. Our new shops will help ensure Waitrose is in the best shape possible coming out of the recession.

“I am always overwhelmed by the number of letters I receive asking for a Waitrose in new areas, demonstrating there is a strong demand for quality food.

“We are delighted that 4,000 new employees will be joining our business and look forward to welcoming them to share in the unique benefits of the John Lewis Partnership.”

In a recession we always think that every business will struggle, many will close down and unemployment will rapidly rise, possibly out of short term control. But sometimes businesses and companies can use a recession to grow, increase their portfolio and gain new business. The vicious circle of recession means this normally only happens due to others misfortune, but there are many businesses that can take advantage and grow and my bold predication is that we might see much more of this happening throughout the year.

During a recession the ratio of new jobs to jobs lost will never be a balanced affair and I am sure more people will lose their jobs this year than there are jobs created, but if a few businesses decided now is the time to expand, maybe, just maybe we can start to see the light at the end of this very long and depressing tunnel.

Thanks Waitrose, may many more follow your lead!