Dear friends, we here in the UK – helpfully defined by our un-elected European bureaucrats as England, Wales, the Channel Islands, the Scilly Islands and the Isle of Man – seem to be obsessed by our imminent departure from the European Union. Our central Bank of England warn of economic collapse on par with Zimbabwe, even though they have done this many times before on other pivotal occasions with 100% inaccuracy.
The parallels with the now infamous punitive settlement lead by France over Germany in 1918 are scary. One hundred years on we see envy and spite at the heart of international politics, whilst individual politicians have direct personal links to equally murky companies such as KPMG, Deloitte, Ernest & Young, Goldman Sachs and more.
I had the honour of visiting South Africa a few months ago. As a visitor, I can only really get a snapshot of what is going on, but the bottom line is whatever is considered to be ‘bad’ in South Africa appears in better clothes with more subtle phrases almost everywhere in the world. As a matter of public record, it is surprising that major companies such as those named above appear in less than glowing terms as each scandal migrates from a secret affair to a something visible to all.
The United Kingdom, which also includes Northern Ireland as well as Scotland, joined the European Economic Committee (EEC) in 1973 without a democratic vote. Subsequently the government was thrown out, and a specific referendum was held in 1975. Since then the EEC has become the European Union (EU), which married political unification with economic union. The UK as a member state – and always, always a major financial contributor – were part of the negotiations, even though the politics were frequently opaque.
On 22nd June 2016 our then Prime Minister David Cameron, fresh from an unexpectedly strong general election result, decided to hold a public referendum which was aimed at stopping more than 40 years of Conservative Party in-fighting. Voters were openly lobbied to stay in the EU in the expectation that no matter how the referendum questions were asked, the plebs would do the right thing.
Except. 17 410 742 people voted to leave the EU, and 16 141 241 people voted in the expected way – just 25 000 votes were spoiled.
The Conservative Party were thrown into complete melt down, not least because Prime Minister David Cameron quit the day after the result, to be replaced by prominent pro-EU Theresa May.
What followed was a very public failure of our politicians to make policy. The primary issue is, unlike the plebs, the House of Commons and the House of Lords are more than 80% in favour of staying in the EU. This is largely driven by personal gain, rather than some sort of belief in the greater good.
After years of amazingly incompetent ‘negotiation’ by both the EU and the UK, we have a deal which has been agreed without any input from the House of Commons or the House of Lords. This grave political error will ensure the end of the Conservative Party for at least a decade. The bigger picture is the idea we have only two options – stay in the EU (which will have some sort of punishment for daring to challenge it at all) or go into a wishy-washy arrangement where the UK pays the EU but gets nothing back at all.
There is a third way, but once again, having not learnt from the last referendum, the political community don’t want to talk about leaving the EU completely on 29th March 2019.
The effect of the whole sorry episode, partially orchestrated by the companies named above, has been to engineer panic. Will the UK survive? Regardless of the decision, yes. Will the UK prosper? Regardless of the decision, yes. Do we have a political crisis? Emphatically yes, and that will be the next big thing.
Everything in the EU is great
However, this week I have come across the idea that Germany and, specifically, Deutsche Bank are bankrupt. Officials have raided Deutsche Bank offices in Frankfurt, seeking documents in relation to alleged fraud. Two execs from Deutsche Bank have already been fired as a result. The story is rolling.
Do the BBC, ‘read-all-about-ITV’, or any other snooze channel report this? Nope.
This comes on top of a scenario of global banks buying up worthless debt, just as the system did in 2008. The outcome is Deutsche Bank is the biggest owner in the world of worthless debt. It means a huge – and that is a really, really big economic collapse, possibly initiated by Deutsche Bank – will come anytime between now and 2020. The European Central Bank (ECB) will bail out Deutsche Bank if it fails, but the debt is so great the ECB will not be able to keep pushing in cash fast enough for more than a few months.
Germany is a house of cards built on sand. No Germany, no EU. Over to you, Jean-Claude Juncker!
How does that affect South Africa?
The above illustrates how events happening elsewhere affect mining, manufacturing as well as financial sectors all over the world. Jaguar Land Rover have committed a major strategic error again by not rolling out enough EV or PHEV powertrains, with the result they are in a poor position to manage trade tariff wars between the EU and the US, the downturn in China or the downturn in the EU – which have all happened at the same time. The result? Short week working and extended holidays.
This is the time we need our politicians to be brave, and set policies in place to ensure the best possible trading conditions internally as well as with the rest of the world.
Come home to a real fire
For some years Hyundai-Kia have had an issue rumbling below the water line. The issue involves the petrol engine ‘Theta II’, built in 2.4l naturally aspirated and 2.0l direct gasoline injection turbocharged forms. What follows is based on recall information published by NHTSA.
Hyundai USA recalled 470 000 model year 2011-2012 Sonatas equipped with 2.0l and 2.4l Theta II petrol engines. The recall involved two manufacturing errors – the machining of the crankshaft may have left debris inside due to inadequate cleaning, and the crankshaft journal grinding process may have compounded the error. The suggested mechanism was the crankshaft – a primary part of the lubrication system – could feed inadequate supply of oil to key bearings and so causing premature wear. The problem was confirmed when a Hyundai-Kia engineer decided to inform the NHTSA directly, which did not please the company.
Hyundai USA expanded the original recall in May 2017, adding a further 572 000 vehicles with Theta II engines which included:
2011-2012 Hyundai Sonata (2015 recall)
2013-2014 Hyundai Sonata (2017 recall)
2013-2014 Santa Fe Sport (2017 recall, 5 seat, standard wheel base)
In June 2017 Kia USA recalled 618 000 vehicles over the same issue:
2011-2014 Kia Optima
The 2011-2013 Kia Sportage and 2010-2015 Kia Soul also have customer complaints, but were not specified in the recall.
The Theta engine family was engineered between Daimler-Chrysler, Mitsubishi and Hyundai-Kia. Manufacturing of the Hyundai-Kia Theta II engines took place in the US as well as South Korea. The issue – if this is indeed the primary cause of vehicle fires – is isolated to engines built by and fitted to Hyundai-Kia vehicles, with engines built by the US plant.
The problem has been elevated to the USA Senate, when both Hyundai USA and Kia USA were called to give evidence on October 2018. Since June 2018, there have been 103 Hyundai-Kia vehicle fires reported in the US. The NHTSA investigation continues….
(Note – none of these vehicle engines and problems are to be found in the South African market, reckons Stanley Anderson, director for Hyundai South Africa.)
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