CNBC Business

RADAR

Making fuel and making movies

Answer the call

At this year’s Paris Air Show, US Air Force Secretary Michael Wynne issued a challenge. By 2016, he said, the Pentagon plans to fuel its entire military fleet on a synthetic-fuel blend, reducing dependence on oil. To meet this target, energy companies must develop more efficient synthetic fuels than currently exist. Those who succeed stand to pocket a sizeable chunk of the US military’s $11bn (€8bn) annual spend on energy.

Entrepreneurs can draw inspiration from the Anglo-Persian Oil Company (APOC), which in 1910 was a near-bankrupt enterprise struggling to market sulphurous Iranian oil on the European domestic fuel market. When Winston Churchill became head of the Royal Navy in 1911, he began a controversial campaign to shift the fleet from coal to oil power. APOC recognised an opportunity and, with Churchill’s encouragement and patronage, worked to demonstrate that Persian Gulf oil was a viable long-term alternative to Welsh coal.

By the time the war began, the Royal Navy had acquired a 51% stake in APOC and was designing its newest destroyers to burn oil rather than coal. When the armistice came, oil was in the mainstream of military and civil engineering and APOC, now renamed British Petroleum after commandeering the title from a small German company operating in the UK before the war, had taken the first steps to becoming a “super major”.

The coal-to-oil transition was an example of “command technology”, with military planners urging industry to innovate at speed. With alternative fuels today promising to be as epoch-changing as was oil a century ago, history suggests that when the world’s biggest-spending military issues a call, ambitious businesses should rush to answer it.

Make the first great European business movie

From the fast-talking corporate raiders of Wall Street to the whistleblowers of The Insider, white-collar business has provided a rich seam of inspiration for Hollywood. In Europe, with the possible exception of the 1989 satire How to Get Ahead in Advertising, there has never been a really great business movie. Aspiring moguls wishing to change that fact may want to bear a few things in mind…

Avoid cliché
Europe’s avoidance of business as a cinematic genre is in part a rejection of the clichéd characters to be found there, but business doesn’t have to be treated this way. Orson Welles’ flawed media baron in Citizen Kane shows that it is possible to combine a business theme with complex characterisation.

Use poetic licence
It is, of course, impossible to turn a bulk paper-clip transaction into compelling drama. A movie should therefore focus on the emotional highs and lows of business life rather than administrative minutiae.

Location, location, location
While a suburban industrial estate may make a perfect setting for situation comedy, it’s not a promising location for great drama. Tales of weapons dealerships set in the Baltic or fashion houses in Milan are likely to make a bigger splash at the box office.

Know your audience
The average cinema audience wants escapism. The average entrepreneur wants ideas. So, why not make a business movie for business people? Send the audience away inspired and stimulated and you could be onto a commission as well as a ratings winner.

Padraig O’Ceidigh

Position: Chairman, Aer Arann
Nationality: Irish

While the no-frills Irish behemoth Ryanair was celebrating annual passenger numbers exceeding 40 million, Galway-based Aer Arann stealthily launched six new routes between Ireland, the UK and northern France this summer, taking its weekly flights above 600 and its annual passenger numbers towards 1.5 million. This expansion consolidated Aer Arann’s position as one of Europe’s fastest-growing regional airlines and confirmed the company chairman, Padraig O’Ceidigh, as one of the shrewdest entrepreneurs in European aviation.

When O’Ceidigh purchased Aer Arann in 1994, the company had a staff of 10 and had failed to turn a profit in its 20-year history. O’Ceidigh was on his third career, as a lawyer, having abandoned previous jobs as a maths teacher and an accountant. On little more than a whim he mortgaged his house, persuaded a golfing partner to stump up half the investment, and launched Aer Arann on an expansion that now sees it generating an annual turnover of €110m.

O’Ceidigh achieved this growth not by challenging bigger rivals head-on but by tapping EU subsidies to serve commercially unviable regional routes. With a target of doubling revenues by 2009, and an expansion of services further into Europe seemingly imminent, it is unlikely that O’Ceidigh will need to change career for a fourth time.

Broken promises

Gordon Brown’s about-face on a European referendum highlights the UK’s apathy towards the issue

I have a nasty feeling that he has gotten away with it. UK prime minister Gordon Brown, I mean. In dropping his manifesto commitment to a referendum on the European Constitution, the PM is perpetrating one of the worst electoral swindles of our epoch.

His ruling Labour Party promised a referendum, not once, but twice: first in the European election of 2004, then in the general election of 2005. On both occasions, the intent was to appeal to Tories by reassuring Eurosceptics that they could still vote Labour. And, on both occasions, the tactic was a brilliant success.

Now, having been elected on the basis that the country would be allowed a vote, Gordon Brown is flagrantly welshing on his pledge. What’s more – and this is the really depressing bit – hardly anyone seems to care.

Faced with this blatant breach of promise, most voters have reacted with a resigned shrug. A few have signed petitions demanding a referendum. One or two have written desultorily to their MPs. There has been no wave of demonstrations, no vigil outside Parliament, no angry crowd shuffling toward Downing Street with pitchforks and flaming torches. The issue of Europe continues to rank at around number 11 on people’s list of concerns, well below taxation, immigration and education.

I am reminded of eastern Europe in the 1970s or 1980s. There is Mr Brown, the dark-suited, dark-faced apparatchik, woodenly trotting out the party line without expecting anyone to believe him. And here are we, the voters, cynical, dispirited. People want a referendum alright – 80% tell the pollsters that they want a vote, and 70% say that they oppose the Constitution – but they have reached the view that, whatever they do, the EU will carry on. After all, when Denmark voted “No” to Maastricht, when Ireland voted “No” to Nice, and when France and the Netherlands voted “No” to the Constitution, the response in Brussels was always the same: to swat the result aside and carry on regardless. Small wonder that people feel resigned.

But, of course, it is precisely our resignation that our rulers rely upon — just as the leaders of the Comecon states looked for acquiescence rather than approval from their subject peoples.

Eventually, of course, the populations of eastern Europe overcame their fatalism and, almost immediately, the system melted away. There is no sign of a similar reveille in the EU today. To pursue the parallel a little, the “No” votes in France and the Netherlands are less like the velvet revolutions of 1989, which marked the downfall of the old regime, than the Budapest uprising of 1956, which marked the beginning of popular protest. Or, to paraphrase Churchill, this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.