The complex geographies of demerger

Many of the company profiles on this blog refer to the spatial impact of mergers - the tendency for big companies to buy-up smaller companies - appropriate their skills, knowledge and market share - in a bid to monopolise markets as much as possible. This is an inherent tendency of capitalism, as observed by Marx 150 years ago. It also explains why all the micro-economic theory they taught you at school or college is bunkum - as free market capitalism doesn't behave in space in the same it is supposed to on paper.

But Carphone Warehouse and Talk Talk, however, now have demerged. When they merged a few years ago in a move which was heralded as a significant development in the regional telecoms industry. Their demerger, however, is also heralded as a key development in the regional telecoms industry - and so good for the North West economy.

There are plenty of reasons to demerger - competition laws which act against the formation of monopolies or cartels - as a way of priming the newly created subsidiary business for sale to another company (something which is flatly denied by Talk Talk BTW), or as a means of establishing a clear business focus for the two demerged companies and therefore maintain profits (as seems the case with Carphone Warehouse and Talk Talk).

The spatial implications are interesting. All of sudden Irlam is HQ to a £1.5 billion company - establishing the town as in important node in the global industry - a move which refashions the town's economic identity - from industrial backwater to a global node. This probably will mean little for the local community, although the promise of 50 jobs + more to come - is obviously good news during an economic downturn. Talk Talk already employ 500 people in Irlam and 2000 in total across the North West. Their other key sites include a Warrington call centre + an office in Preston.

However, Carphone Warehouse have entered into a deal with US electronics retail - Best Buy - who plan to establish 14 50,000ft stores in the UK, including one in Liverpool - creating a total of 8000 jobs in the UK.

Best Buy were established in 1966 and are now a massive $45billion company - operating over 1100 stores the US, China, Mexico and Turkey - employing 155,000 people

Clearly the new British jobs are important, but Best Buy now have a 50% in Carphone Warehouse's 2400 UK stores. In effect an invasion through the back-door, which will threaten high street perennials such as Currys and PC World.

Source: Talk TalSk demerger 'good for NW' - Manchester Evening News

http://www.liverpooldailypost.co.uk/ldpbusiness/business-local/2010/03/29/talktalk-telecoms-business-makes-trading-debut-after-carphone-demerger-92534-26128221/

http://www.mcvuk.com/news/38229/Best-Buy-dates-UK-invasion

http://www.trustedreviews.com/peripherals/news/2010/03/29/Best-Buy-Announces-First-Store-Opening-Dates-In-UK/p1

How modern groceries work?

There was a time when Liverpool Road in Irlam was a bustling high street like any other in Britain, with dozens of local businesses, butchers, bakers, grocers and the rest. And like other high streets around Britain, retail trade has virtually disappeared leaving a trail of abandoned shops and derelict sites. Of course the loss of industrial employment had a major impact in the 1970s. But at the end of this decade Irlam had the dubious pleasure of welcoming the country's first 'hypermarket' a vast football pitch sized Tesco. Today the store has been rebuilt as a huge Tesco Extra, complete with a dodgy mezzanine level which adds a third to the floor space. The store is packed with everything you might need and sold as cheaply as possible. Although we might enjoy the opportunity to buy a tin of bins at 6p a pop, the cost to the high street has been devastating. As such Liverpool Road has never recovered its status as a retail area as local business finds it impossible to compete with this retail giant on their doorstep. The cosy 1950s image of the traditional British high street of friendly grocers, selling fresh local produce have long gone. Groceries is now big business, wrapped up in the world of global finance. It is perhaps no surprise then, that Tesco's Irlam store is now actually owned by Standard Life Investments - sold for just under £50m in January this year, as big city financiers rush to invest in long term and secure investments.

Source: Standard Life Investments buys Tesco Extra in Shrewsbury - Property Week

Green Belt - a temporary repreive?

Salford CC announced yesterday, in the face of growing community opposition, to shelve plans to allow the development of 98 acres of Green Belt between Irlam and Barton. This was certainly a great victory for the effective community campaign which attacked the plans on several fronts. But I feel that this battle is not over. Certainly the Salford Star shares my suspicion that the timing in terms of the announcement and retraction of the proposals in the lead up to elections in May, suggests that local politicians have been playing power games with the community, as Labour attempt to regain control of the ward they lost to the pathetic and now defunct Community Action Party. It only takes a few hundred votes to swing it in Irlam, given poor turnouts at local elections. I wasn't surprised to see the Tories attempting to gain some political capital with the community either.

But everything has now come to a convenient end as Labour saves the day with the decision to take the Green Belt development out of the Core Strategy.

My concern in where next for Chat Moss? The port development and associated infrastructure is about to enter what will probably be a long and protracted planning consultation. This development will have a devastating effect on the local environment, produce even further traffic problems, will probably not create the level of investment and jobs created, damage the identity of the town, and will remove 200acres of unmanaged open space.

The situation regarding the continuation of peat extraction also raises further concerns.

Further, there are now suggestions the Peel are aiming to develop the aerodrome with a concrete runway, with a long term plan to extend this facility into a commercial airport.

The positive outcomes of the Green Belt proposal, however, is that there is now an organised group of like-minded local people who have shown the skill and tenacity to stand up against big local government and business. A Salford branch of Friends of the Earth has now been established. This growing network of concerned local and activists is much welcomed, but I fear they will be called into action again sometime soon.


Source: SALFORD GREEN BELT - Salford Star - with attitude & love xxx

Kingsland's high spirits - Manchester Evening News

Kingsland are one of Irlam's success stories, employing 300 people at the former Co-operative bottling plant. Despite the credit crunch, the company has experienced a £20m rise in turnover over the last 12 months. Their story reveals some classic industrial location theory. Undoubtedly their continuing presence in Irlam is due partly to the Manchester Ship Canal, which Kingsland use to transport wine via barge from Liverpool. Their suppliers have a colonial feel - including Australia, New Zealand, South Africa, America, Chile and Argentina.

Source: Kingsland's high spirits - Manchester Evening News

For Peat's Sake

The continuing story of the destruction of Chat Moss is covered here in an interesting article in the Salford Star. It is now clear that 100acres of open land is at risk from development and peat extraction. I'm not an expert on peat extraction, but I know several people who are, who tell me any form of peat disturbance creates a significant contribution to Green House Gases. Peat takes 1000s of years to form - and is an essential store of carbon that otherwise would be floating around the atmosphere. As this research from Canada shows - any restoration will take 100s of years to replace the carbon lost - nevermind the impact on biodiversity and the negative visual impact on the landscape.

The devouring of the Moss, however, is not beginning to attract political interest from all sides. The Cons have been to quick capitalise on local votes in the run to both local and national elections, whereas Labour seem to putting out mixed messages - Salford is a Labour run council afterall - in control of the planning authority allowing these development to take place in the first place. Other than a band of committed local people the green movement is largely absent from the ongoing debate. Perhaps we should give them a call.


Source: SALFORD MOON WALK - Salford Star - with attitude & love xxx