Sir Richard Branson, Virgin Group founder & chairman, discusses his joint venture with Wilbur Ross to buy failed bank Northern Rock.
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and there’s bratwurst over these fires there, fantastic. certainly set europe in a much better course than it has been in the last few years. the sense that we get from steve liesman, our reporter just over in frankfurt, he was talking to a lot of germanofficials. the sense he gets is this is not going to be something that can be a quick fix. that german officials and german bundz bank officials are concerned this is something that needs to be actually changed in the treaty. would you think that that’ssomething — i mean are you concerned that this is somethingthat we’re’going to see a quick fix to or a quick agreement on? i think that if can you get france and germany to agree, you then have a good chance that you’ll get most of the other nations to agree. so i think it’s a big enough step in the right direction tohopefully stabilize things once they push it through. but it’s anyone’s guess to be honest. i mean i couldn’t say what i think and wilbur who has the knowledge to say what he thinks. but, you know, this is been like a yoyo and it could continue to be like a yoyo. at least they’re talking sense and hopefully they’ll getsomething, you know, something agreed which will give comfortto the markets and obviously, you know, italy’s been very brave today and, you know, passing an austerity budget. that’s great.and a number of other countries have to do the same. britain which is my country. you know, they grab the bull by the horns about a year ago and i think they’re moving in the right direction.it’s going to be tough. i think at least countries are moving in the right direction and hopefully that will stabilize things. regardless of the situation and what happens, you’ve been looking around as has wilbur and you have seen some really great bargains when it comes to the banking side. do you want to explain why you think northern iraq is an attractive place? well, the banking industry in britain is in a mess. they ran into trouble a few years ago. we expected interest to northern rock to take it over then.you know, we don’t necessarily see this as a massiveopportunity. but we do believe that the virgin brand is extremelystrong. it’s one of maybe the top one or two most respected brands in the uk. we’ve already got a lot of experience in the financial services. and we think this will give us a platform to create, you know, really good quality alternative bank. well capitalized. and that’s what i think the public needs right now.and we’re used to putting out products that appeal to the public and treating them well. and so i think we already can build a big alternative in the same way we did in other industries like the airline industry or the train industry and, you know, the mobile phone industry, et cetera. wilbur, you talked a little bit about what you see here, too, is the bad assets have gotten taken out of the banks. that makes it a much different scenario right now?that’s right. and northern rock has more deposits than it has loans which is relatively unique among european banks. most of them have far more loans than deposits. and that’s why their dependent on the whole money markets and the top money things. with don’t have that problem. having more deposits make the opportunity to create loans and help the economy get going. can you find places to make loans? are you having trouble finding the right loans to make? we don’t have the bank yet. that’s still pending regulatory approval. but we’re confident that just as we have in florida and elsewhere that the banks we’ve been involved, we can find loans if you really look for them. richard, i know you also have another initiative that you’reunrolling today. the carbon war room we heard a little bit about.you’re launching to focus on jet fuel, renewable jet fuels? yeah.and we set up in response to global warming, we’re trying to get carbon out of the 25 industries that create the most carbon. and to do it in a that doesn’t damage the industry. we’ve done it with the shipping industry. we’ve done it with cities. the airline industry is an industry that puts out about 3% of the carbon in the world. and the art is to come up with clean fuels. we put all the profits into trying to discover clean fuels. we discovered some extremely exciting ones. we discovered a fuel that is anaviation fuel and created just from the carbon that goes up thechimneys of steel plants and aluminum plants. and what we’re doing is trying to list all the companies that are in this sector to try to guide the airline industry in into — which companies are likely to be winners and which companies will not eat into the food supply. so i’m hopeful that by 2020 the rate things are going that airline industry may be running most of its planes on clean fuels. and it’s much easier thing to do than most other industries in that there’s only 1700 fuel pumps in the world.obviously with the car industry or other industries, that’stougher. richard, andrew ross sorkin here. i remember being with you on that covering the weekend in which they put together before the carbon war room was developed when you were talking about how cost prohibitive it might ultimately be though to actually clean fuel for airplanes. how long will it take to develop something that actually makes economic sense? the exciting thing is that the fuels that are being developed are costing either the same or less than the jet aviation fuel that we currently use. and that’s at today’s price. there’s a possibility that as we start running out of oil that fuel prices could go upconsiderably. so i think this is not just good for — from a global warming perspective. it’s fantastic that the aviation industry will actually have a competitive fuel or competitive fuels which they can choose from which actually i suspect will keep the price of fuel down and also keeps the price of airline tickets down. so it already is a win-win situation all around. and, you know, you just take virgin atlanta ache lone, we spend over $2 billion a year onfuel. you know, we’re working with a company, a little new zealand company, and helping them get going. they’re the ones that are using the carbon that comes out of aluminum and steel plants, turning that into jet fuel. you know, we’ve got an enormous check that we can give them. so massive upside for them as a small company. and i think that, you know, veryexciting, very, very exciting future. before you go, richard, thereconstruction effort going on necker island? i know there was a fire there that took out most of it, what was a very beautiful property. i think you’re there right now. i am here right now. i’m going to marry my daughter off on the 20th of this month in the ruins of the old house. it is quite romantic and beautiful at the moment. then we’ll rebuild and, anyway, a year or so from now we’ll have the most beautiful home back again. but thanks for asking. one of the most extraordinary properties in the world. it really is. if i can just say to wilbur, great to be working together and i look forward to shaking up the banking industry with you.good to see you, richard. cheers. richard, congratulations onyour daughter getting married and we appreciate your timetoday. thanks so much. great.
