Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant the accuracy of closed captions. These are derived automatically from the broadcaster's signal.
Business Sunday -

View in ParlView

(generated from captions) This program is captioned live. Welcome to a busy Business Sunday. Good morning. I'm Ali Moore. We talk to the CEOs -

and Mitsubishi's Tom Phillips. Coles Myer's John Fletcher who's leaving the car-maker its new make or break model. just as it unveils of the dice for survival. The 380, Mitsubishi's last roll

Three

years in the making and at

least partially under wraps. We're still hiding the grille. Why? What's so special Trying to keep a bit of mystique on October 13 until the public launc And on remote Norfolk Island, that's taking on the big boys. the betting agency wagering division Michael Piggott Chief executive of Tabcorp's isn't happy about it. and other Pacific island They followed Vanaut that have opened up tote and setting themselves u of taking bets from the mainland, with the primary purpose to the mainland to bet on providing no racing themselve as pirates I think they're referred to As well this morning -

and the growing fuel crisis. Sony in trouble the latest on Hurricane Rita First -

with Georgie Gardner. and other news Good morning, Ali. is a long time between drinks, Well, 72 years sore heads this morning and there's no doubt there'll be some the Swans' thrilling Grand Final win as fans continue to celebrate by just 4 points Sydney beat West Coast since 1933. to claim their first AFL title The Swans arrive home this afternoon, to a lap of honour around the SCG where they'll be treated piece of silverware. to show off their prized they went as Premiers. Wherever they went, have waited so long to see it happen Heroes to thousands of Swans fans who 72 years in the making, savour every minute of this sucess. Sydney and its followers wanted to And what a victory, Grand Finals in 40 years. one of the most thrilling and closest as his finest moment in football. Swans coach Paul Roos describing it to us up here It means a hell of a lot to you guy but I hope it means as muc how long you've waited, because I know I know how frustating I know how hard it's been, '96 we got there and we missed out, and I hope you have a great night but it's been a great da Barry Hall, It's just as sweet for skipper who survived a striking charge to lead the Swans to victory. in NSW as well, It's great for football a premiershi we're the only State that hasn't wo so it's fantastic With the party well and truly starte for the fans and players. it's not likely to stop any time soo fronted up to their fans, Losing hurts, but still West Coast for the Eagles. determined better things are to come it is just the beginnin It's not the end, and we've got a great group Thank you very much We'll get better It was a thrilling contest, finished the game with ball in hand. a man they call leaping Leo Barry COMMENTATOR: Leo Barry, you star. history is over. The longest drought in premiership with celebrations under way, Winning by just 4 points, with some Swans of old, Sydney players enjoyed it South Melbuorn Swans. even those from the original kicked up his hells. kicked up his heels. Irishman Tadgh Kennelly had the cup in hand, And as soon as Roos and Hall they were swamped by team-mates of the silverware too. keen on getting a hold as a players, as a player, Roos, who went without a premiership success with the masses. made a point of sharing his first 72 year To the people who have waite win the premiership to see South Melbourne/Sydney Swan here it is celebrations spilled into the rooms. After soaking it up on field, medal for being best on ground. Chris Judd was given the Norm Smith the Eagles have heavy hearts. But without a premiership medallion, without what they came for, They go west to go north of the Murray River with the AFL premiership cup this morning anything to go by, and if overnight celebrations are

Sydney is in for a sizeable party. National Nine News. Leith Mulligan, has pounded the US Gulf Coast, Hurricane Rita leaving a trail of destruction. as was feared. But the damage is not as bad was Port Arthur in Texas One of the worst hit areas a roof caught in power lines. where this home video shows were spared direct hits, While Houston and Galveston was still too fragile to cope the ravaged city of New Orleans with its levees breaching again. over the military operation, In Colorado, President Bush watched determined to ensure weren't repeated. that mistakes from Hurricane Katrina

The first order of business now is

people of harm's way. to search and rescue teams to pull

to a category one hurricane, Rita has now weakened but fires at power stations in Texas without electricity. have left around a million people gas leak at the Kurnell oil refinery The NSW Government will investigate in Sydney's south taken to hospital. which saw 14 employees yesterday morning, During a routine maintenance check was found to be leaking. hydrogen sulphide gas evacuated and treated for nausea, About 30 workers from the site were and eye irritation. shortness of breath its own inquiry. Caltex will also carry out Defence Minister Robert Hill Hamid Karzai has met with Afghan President in Afghanistan. to discuss Australia's involvement A new deployment of Australian troop this month arrived in the country earlier fight rebels. and is now helping Afghan forces

We have quite a substantial aid

program now. We certainly, apart

from the military aspect, want to continue to assist Afghanistan. Senator Hill says send more troops to the country a decision on whether Australia will will be made in November. into the the NRL Grand Final West Tigers are the first team 20-12 after upsetting favourites St George of 41,000 fans at Aussie Stadium. in front of a sellout crowd leading 16-6 at halftime. The Tigers got the jump on St George, They sealed it in the second half with a try to Dean Halatau. Parramatta will meet the North Queensland Cowboys this afternoon to decide who'll now play the Tigers in the Grand Final. A look now at the weather around the country. And that's the latest from the newsroom. I'll be back at 8:30 with an update. Ali. Well as you've just seen, Hurricane Rita has not had the same devastating effect as Katrina.

As Rita blows itself out, the economic cost will be tallied, including the time and production loss from the closure of gulf oil refineries and rigs. Nine News Correspondent Rob Penfold is in Texas and joins me now live.

Rob, good morning. Not as bad as

Katrina but still a major shutdown

of oil facilities? Yes. It is a

real worry, because the huge amount

of oil, gas and chemical production

happens here in the gulf. There is

about a quart of of America's

production altogether happens here.

Because of the hurricane, 745 rigs,

which is an extraordinary amount as

you can imagine, were evacuated.

Nearly all production has been shut

down for the moment. That is a real

worry for Americans. Do we have any

early estimates of damage? There's

been significant damage to two

large refineries to Port Arthur,

the one mentioned in the news. One

will be out of action for a month.

Otherwise it appears most of the

others have escaped damage. They

really won't know for a couple of

days because they need to get the

helicopters up. The weather is too

bad for to get the choppers up.

There is a question mark over that.

They are hoping there hasn't been

significant damage. On top of

Katrina and obviously with the

delays before production, what are

the economic consequences? The

price of fuel? This is a worry for

consumers in the States. We've

been hit with higher energy prices

for pet role, gas and home heating

fuels. We are already paying an

extra $30 for a full tank of petrol

compared to a year ago. Home

heating bills could go up by 60%.

This is all speculation at the

moment. It is enough to worry

everyone in America. Of course, the

hurtain season isn't over yet. We

could get another. Which is just

what you need. If you have fuel

worries, so have we. Thank you very

much for joining us this morning. OK, alley. Thanks. Back in a moment with more on rising fuel prices - the topic that's galvanising Australia.

This is the ultimate BBQ stopper.

This is the issue that will well and truly make Australians stop and think how they get to work, whether they pick the kids up or whether they catch the bus. MUSIC PLAYS BACKWARDS, KIDS LAUGHTER A great retirement. For 80,000 Australians, the first step has been a visit to Retireinvest. Tell me how you want to live when you retire... ..and we'll work back from there. Call 1800 633 080 now, because good advice today means good living tomorrow.

The rising price of fuel is really starting to hit home - truck drivers are on strike, the Federal Government is meeting the oil companies next week and all over the country individuals and businesses are hurting. Peter Harvey covered a recent petrol summit for National Nine News and here are his thoughts. On the face of it, it looked like a non-starter - a petrol summit without petrol companies. The four major refiners staying well away, but no-one else was. More than 40 peak business, consumer and motoring organisations clambering on board on NRMA-inspired bandwagon to talk about the only topic that mattered last week, this week and almost certainly for a lot of weeks to come. Try a very, very long time. This is the ultimate barbecue stopper. This is the issue that will well and truly make Australians sto and think how they get to work, whether they pick the kids up or whether they catch the bus, where they go on a holiday. An acid test coming later this week. The October holiday weekend, The October holiday weekend usually sees a very great deal of medium to long distance driving and this year things could be very different. But back to the summit. At first very cool on the idea, the Federal Government quickly picked up on the national mood, sending Revenue Minister Brough to announce the Prime Minister did, after all, have plans to help, giving the green light for the use of alternative fuels such as ethanol. In a world of high oil prices, it is important that unnecessary barriers preventing the development of an alternative fuels market in Australia are removed. That brought the oil companies out -

Caltex saying it was ready to play a role in developing an appropriate share of the Government's target

of 350 million litres of biofuel by 2010. Shell also welcomed the Prime Minister's announcement, calling it a step towards restoring consumer confidence in biofuels as a sustainable part of the Australian fuel mix. And just as importantly, John Honan's Manildra group, the nation's biggest ethanol supplier, said the industry would be able to gear up to meet that 2010 target But to many, if not all, delegates to the petrol summit, a very large worry remains. Lack of government regulatory agency

oversight of increases at the petrol pump, price hikes that business economists claimed will have the same impact as a 2% jump in interest rates. Yes, we have to be connected to the world because we're part of it but we're using a system that results in excessive prices that they don't need to do it. Far more to the point...

If there were allegation against the trade unio like the allegation against the petrol companies, the Government would be into it like a rat up a drain pipe Mr Howard will meet the petrol major this week. Where the talks go, difficult to be certain. But the Prime Minister is clearly on the record, warning that forcing petrol prices down runs counter to economic and political sense. Once tax is reduced in the name of giving temporary relief, there is near 100% resistance to it going up again when the reason for the relief has disappeared. Of course it may be an extremely long time, if ever, before that vanishing act occurs. Peter Harvey reporting for Business Sunday. Now with more on our high petrol prices and their growing impact, here's Terry McCrann. The PM is exactly correct. He said Friday that any meaningful cut in the petrol excise would have to be 5 cents to 10 cents a litre and that would cost billions Funny thing, he discovered Friday that he had those billions. Indeed, more than enough extra billions to deliver the higher 10 cent cut. He should do it. And do it now - precisely because of where those extra billions came from. You. The Budget is taking an extra $3 billion a year in tax revenue than was projected just four months ago in the Budget in May. The best way to give it back is by cutting the petrol excise. It would help consumers. It would help business, acting directly on business costs. It would help inflation. It would help the economy. There is no particular reason why the excise should be the one tax chiselled in stone, never to be changed. It would also - and I'm sure this would never cross the PM's mind, be good politics. As it stands, higher petrol prices are going to start to have real impact on consumer spending. The evidence is pretty clear If they go even higher, thanks to Hurricane Rita, that cold prove devastating. that could prove devastating. Coles Myer and Woolworths have the biggest interest. It will be harder for Coles Myer to become just Coles once again. High petrol prices will arguably have an even bigger impact

on both the cost base and revenue of a transport group like Toll. Perhaps it's time for Toll to detail exactly that impact in the context of its offer for Patrick. Coming up - Coles without Myer. Now a very real probability. Analysts believe it will be hard to offload in its present form.

Who would buy Myer? Quite a number

at the moment. There's been reports

about 13. They are largely accurate

There are millions of super fund and union members out there.

There's a low-cost bank that's been created for super fund members and union members. It's ME. And switch to Members Equity Bank - the Super Funds Bank.

No chief executive likes to shrink his company, but Coles Myer's John Fletcher could well cut loose the struggling Myer department store chain, by early next year. When the venerable Myer merged with the G J Coles supermarket business in 1985, it was a retail conglomerate for the times. Now, with changing consumer patterns, the two have become Australia's retailing odd couple as Adam Shand reports. It took an extraordinary performance from its discount chain, Target, and a currency windfall but Coles Myer eked out a 17% rise in annual net profit to $678 million. Could Coles Myer deliver when times got difficult? And deliver it did. Deliver it did. And therefore I continue to say it's with some pride that I get the opportunity to lead what is a great team now. There was obvious satisfaction for chief executive John Fletcher. The rescue of Coles Myer's non-food businesses

had been his first priority when he joined in 2001. Back then, loss-makers like Target and department store chain Myer Grace were considered ripe for sale. I don't think anything's off the agenda.

I think the only thing in my sort of early look at the company you can say is that you would be silly to do anything other than work hard to restore the non-food businesses back into shape Now, four years later, Target is one of the great drivers of Coles Myer's profit but Myer continues to flounder, posting a loss in the second-half and recording a retail margin of just 1.25%. But let me say this -

this business is a far cry now from the one that Dawn took over in 2002 Coles Myer wants to sell its department store business by early next year. Analysts like Ross Honeywell believe it will be hard to off-load in its present form. Myer boss Dawn Robertson has damaged the business by driving sales growth through discounts.

Well, department stores are about discretionary spending and the further down you drive them towards the discount department store level, the Targets, the Kmarts, the Big Ws, the more likely you are to estrange the consumers who in fact are looking for the higher discretionary choice. Honeywell says the future of department stores lies with neoconsumers - the big-spending, brand conscious shoppers who make up 24% of the population but more than half of retail sales. In the past three years, the proportion of David Jones customers who fit into this so-called neoconsumer profile has risen by 50% while Myer's share has fallen by 7% as John Fletcher has taken the store downmarket. Up to 13 potential buyers have expressed interest in Myer but the new owner will have to bear the cost of 25-year leases with landlord Westfield. To break one lease with Westfield, if Westfield allowed it, is going to cost them $15 million to $20 million for every store they do In a recent interview on Business Sunday, Westfield's Steven Lowy indicated a willingness to talk about department store closures in his malls but there will be no easy exit. We're actually having discussion with the in changing what is basicall

underproductive department store space into either new department store space for the or for other or in effect taking back those boxe and carving them u into new retailer that the consumer is looking for That's in a holistic approach, we would welcome discussion with Coles Myer in what they would like to achieve Adam Shand. Well, I caught up with CEO John Fletcher just after the retailer's results were announced in Melbourne, and asked him about his current review of Myer's future. Is shareholder value likely to be created in a better way by a sale or a demerger? Or is it better created by keeping it within Coles Myer? And the only way we can find that out, because we know what we think we can do with the business, we've got the 5-year plan, is to test the market and we'll go through this process and the board can once and for all make that decision. If we look at the results for Myer, it lost money in the second half Overall for the year, it halved its pre-tax earnings How different, really, is the busines from the one that Dawn Robertso took over three years ago What Dawn's had to do - what is a department store about? Let's get it back to basics.

She's done that, I think, with merchandise and product and brands. Her next journey is to take cost out, to start to have it comparable to other department stores around the world. Are costs all that are left to get this to benchmark It's primarily that.

I think we'll do a bit more around private branch. We might allocate more of the store space to apparel but in broad terms, I think her strategy of brands, fashion, differentiation is right and that won't change and now it's what can we do to make the cost base lower? If it's all that relatively simple and if so much has been achieved, as you say, why don't you keep it We might. That's the point of this. We might. We understand what we think we can do with it. What we need to understand is does someone else think it's worth more than that? Dawn Robertson earne close to $4 million last year That's one dollar for every $18 of Myer's ebit That's a very, very big salary Look, I'm not going to get into talking about individual executive' salary and rem. We have to report to shareholders and it's there for the public to see.

We put together a team together that we think was good enough to turn around this company and the record speaks for itself. I understand she's been in the US looking at job opportunities She is off contract, correct She's on the same contract terms as all of us.

Which is rolling one year. And so how long will she stay

She wants to continue the journey. Her view is this is basically her business that she started and she wants to finish the journey She's got residency in Australia, the kids are happy. Dawn wants to stay. Most analysts say a third of the 61 Myer stores aren't performing That's wrong I think as a guess it's wrong but I think people that - But is there a guess here I mean, you know Yeah, we do know and every brand we have - every brand, including the best one we've got, which by returns is Target, has underperforming stores from time to time. Some of the best retailers in the world, like Tesco, have underperforming stores and they come in and they come out. Your job is to make sure you do one of two things - you move them into performing store or you do something about them. You've just got to keep saying, "Does the fleet work? Are they in the right locations?" If they're not, you close them, rebadge them or often move them and that's just the role of retailing. I wouldn't want to say that we'll never close another Myer store but I couldn't say that about any other brand either. If you do sell Myer, it will be as one lot It won't be broken up We would definitely not break it up That's a categorical no Even if expressions of interest show that you'll get more selling it bit by bit I just can't imagine how I could get an expression of interest that would demonstrate to us that we would get more by breaking it up Who would buy Myer Quite a number at the moment.

There's been reports about 13. They are largely accurate and this is without even asking. I mean we just announced we were doing a review and 13 people called up and said, "We'd like to be in it." The next day or so we'll actually put out formal expressions of interest and actually ask, "If you do have an interest, now is the time to and and talk to us." You're happy with these result and you're on track for the $800 million target for this year What could derail that We're four-fifths of the way there.

Four-fifths of the way that people in '01 said it was impossible. Now there's not too many companies in Australia that have doubled their profits in four years. We've got one year to go. We believe that despite a cautious consumer, high fuel prices, that we can do it. John Fletcher. And on the 'Sunday' program today -

Russell Crowe, master actor and badboy, talks to Peter Thompson.

Your public profile just exploded?

Yeah. Obviously, it was

complicated, messy, psychologically complicated, messy, psychologically

damaged weirdo. That is the

fundamental requirement for my job.

It is an unfortunate thing that

people just don't simply understand

that and just leave me to my padded cell. And next on Business Sunday - Japanese giant Sony facing hard times. Rival Samsung has been faster off the blocks, launching a strategic attack on design, technology, image and price the elements that made Sony a household name.

Sony is facing increasing competition. But first with a news update, is Georgie Gardner. The Swans will arrive home in Sydney this afternoon with a treasured piece of silverware - their first AFL trophy since 1933. The team celebrated their Grand Final win in Melbourne overnight, following their thrilling 4-point victory over West Coast. Hurricane Rita has pounded the US Gulf Coast

but her path of destruction wasn't as bad as first feared. Mass evacuation efforts from the region appear to have worked, with no reports of any deaths. And Wests Tigers are the first team into the NRL Grand Final

after upsetting favourites St George Illawarra, 20 points to 12 at Aussie Stadium. More news in the 'Sunday' program at nine. For now, back to you, Ali. This week, Japanese electronics giant Sony warned it would post a loss for the year in order to fund a major restructure. The reforms come as rivals chip away at Sony's market dominance. As Karen Tso reports, Korean upstart Samsung is using the digital age to tap into technology hungry consumers and its brand name is now claimed to be worth more than Sony's. On the global stage, Sony's lost none of its fanfare, but it masks the panic behind the scenes. The core electronics business where Sony earns two-thirds of sales has produced a loss for two years running. It's forced another wave of cost-cutting, with Sony to shed 10,000 positions world-wide. The last time they introduce a restructuring plan, it was specificall for cost reduction purposes If they really talk about stirring growth, especially, especiall in the electronics division

Sony will adopt a plan to speed up decision-making as its first non-Japanese chairman, Howard Stringer, addresses criticism the company's been too slow to embrace digital. Our new structure is simply streamlined. Decision-making authority in key areas across horizontal line such as product planning, technology strategy, procurement and manufacturing processes will be consolidated. Rival Samsung has been faster off the blocks, getting products on shelves at a blistering speed while launching a strategic attack o design, technology, image and price the elements that made Sony a household name. Samsung's overtaken Son

on the list of the world' most valuable brands How have you managed to achieve that We have introduced a lot of first market product. that kind of activities in the past You know, Sony has been reputed for it seems, you know, but in the recent years, that kind of thing didn't happen. values Samsung at $19 billion Global consultancy Interbrand on a list flanked by icons and ranks it number 20 such as Disney, Coca-Cola and Toyota Sony slots in at 28 - On the same list, eight rungs below Samsung. and speed, as I mentioned, Creativity is more important is more important. a lot from our Japanese companies So, frankly speaking, we learned when we deal with another product. in the past But when it comes to a digital era, at the same starting line we thought we could start in terms of R&D but we showed more speed and introducing a new product. that Sony will try to replicate. It's this speed one in five product lines will be cut The company's president says and 11 manufacturing sites closed relationship with Samsung. but it will keep its cosy The two currently work in tandem, to cut costs. sharing research and development so they will try to come back. I think Sony is a great company When we come back -

facing the music. another Japanese company at Mitsubishi. It's make or break time This is the last roll of the dice? This is a critical product, yes So if it sells, you live. If it doesn't, you die? Yes a cup of coffee? Thanks. Peter, can you bring me Certainly, sir. Right away. a cup of coffee, thanks? David, can you bring me Certainly, sir. Right away. Figures out this week prices, car sales are booming. show that, despite soaring petrol have never been so affordable. New vehicles, it seems, growing market is small cars - But, not surprisingly, the fastest given the prices at the pump. big gas guzzlers losing their appeal All this is sobering car-maker, Mitsubishi. for Australia's smallest and frailest in Australia Its future as a manufacturer model, the 380, hinges on the success of its new a big, 6-cylinder family car the production line that started rolling off this week in Adelaide in a fortnight. and will be officially unveiled Tom Phillips, Mitsubishi's local boss, for the reception. is not staying around Two weeks after the car is launched, after five years in the job. he retires plant for a look at the past I joined him at his Adelaide assembl

and the future. So this is it?

This is it the hope for the future? This is the 380, The hope for the future of the dice for survival. The 380, Mitsubishi's last roll at least partially, under wraps. Three years in the making and still,

And you are still hiding the grille? We're still hiding the grille

Why? What is so special? the public launch on October 13 We want mystique until Will we be surprised when we see? but I think you're going to love it I don't know about surprised, You love it? I love it, yeah You're to buying one? I'm going to buy it, yeah You're buying one?

make it happen, Tom Phillips, the man who helped who build it. as much hands on as the 1,500 worker How are you? Do you like it? Love it on the factory floor, Everywhere you walk Tom Phillips is warmly welcomed and not just because he is the boss. at death's door more than once. On his watch, Mitsubishi has been haven't you You've had an extraordinary time,

in Japan You've had six company president the shutdown of local operations You've had constant gossip about You've had a worldwide sales slump as a partner You've lost Daimler Chrysler

at you has been Everything that could be throw some challenges. Well, as I said, there have been We just move on. circumstances hit us from overseas, There have been quite annoying it so we just try and put it aside. but there is nothing we can do about So if you succeed with the 380, head office rather because of it it will almost be in spite of your I think that is a good summary, yes Tom Phillips is credited In Australia,

back from the brink. with bringing Mitsubishi the Adelaide engine plant Last year's decision to close cut staff at the assembly plant, the new car was made on his watch. push ahead with the investment for whole factory for building the 380 How much investment went into thi Around $250 million. For one car One car. to have two cars. It started off we were going Then I think April last year with Daimler Chrysler. there was some disruption capital into the company They were expected to put some more but they decided not to. So two became one? Two became one. A tragedy. of money for one car Is $250 million an enormous amount for one car. It is an enormous amount of money If you went back over it again, of money for just one car. we would never have spent this sort the future was killing confidence. The money spent and uncertainty about face of the bid for revival. It was Phillips who became the public to be better built, better backed ADVERTISEMENT: In fact, it's goin than any other car in Australia. a good head for radio" and so on. "Well, my friend, they say you have later or a couple of months later, We did some research a month or so out there who didn't like it. and there were only 8% of the people It worked. So it worked

was my wife, Of those 8%, one of them and too worried. who said I looked too serious Well, I was seriously worried. That's why I did it. there would be no new car. Back then, he was seriously worried about selling it. Now he only has to worry of this car just last Monday. We formally started production the odd doubts Until then, there's still been going through people's minds - is it going to happen? and previous test cars. We built many pilot cars to mass production on Monday, Until we said formally we go there is... There was a little bit of doubt yes. ..there was a little bit of doubt, Not now, though

Not now, no.

It's happened, yeah. Now it's just got to sell It's got to sell. That's the next bit. It will sell. Are your fingers crossed Well, everything is crossed but I'm very confident about what this car is going to do. When the 380 goes to market on October 13, the timing couldn't be worse - petrol prices around $1.40 and big passenger cars a shrinking market.

But if you had your time again I know you can't plan for the short term - but if you did it over again, would you build a V6? Well, I don't know I think when I look at it now what our options were back then, we would probably still do it The reality is that having one car is not going to ensure that we will go on forever What we have to do is get some run on the board with this, put our hand up for something else and then try and go to the next step This is the last roll of the dice? This is a critical product, yes So if it sells, you live. If it doesn't, you die? Yes If Mitsubishi is not to die as a manufacturer

and become a pure importer in Australia, the 380 has to meet its targets. That means selling 32,000 cars a year. Only then is there hope of getting another car in production in Australia. This car has a shelf life of probably five to six years. Within that period, of course, you know, if there is going to be another car, there has to be a decision made well before that period is up. It is probably 2008

before we have to sort of say, "What is happening next?" But they are not going to do anythin else until this car proves itself No, that's right. So you've got a year I think through the next year that will decide what happens after this car. But Tom Phillips won't be there for that decision. At the end of October he retires. The timing has confused many, especially on the factory floor. Wouldn't logic dictate that if this is your baby, if this is the hope for the future for Mitsubishi, you would stay and see if it works Well, I'm very, very confident about it. I'm sure it's going to be a success It's never a good time. I thought long and hard about this. If I had left it and retired after the car had been released, then there would have been people saying, "You don't believe the car is going to work." You weren't pushed I wasn't pushed, no. Did you go earlier than you thought

Did they find a successor earlier than you thought I have always had in my mind to get this car to market and then go. But I wasn't expecting that they would have a successor as quickly, no. But that has happened. So 40 years and three months after entering the car industry and five years after rising from head of sales at Toyota

to head of everything at Mitsubishi, Tom Phillips is easing himself out.

I met up with a lot of people and worked for a lot of people who have a level of passion that I've never experienced before in my life. That's the reason why if I have put any effort in, the effort has been there because these people deserve some success.

That is why I want to see this car work. It's been an incredibl intense five years

What is it going to be like when yo wake up on November 1 no longer CEO of Mitsubishi I think it's going to be pretty good, actually. And Tom Phillips will stay on as a consultant to Mitsubishi for the next two years.

After the break - the mouse that roared. Norfolk Island takes on the mainland. Certainly AusTOTE is beginning to gain traction, on some thoroughbred races. attracting pools of up to $10,000 for a better price. Punters are always looking that's got to be a good thing. If we get a better return, and poker machines, Despite the inroads of casinos horseracing is still big business. more than $124 million Last year Australians bet

on the Melbourne Cup alone, some $233 million on the day. while totes across the country took Spring Racing Carnival And this year's is forecast to be bigger again. But as Katrina Nicholas reports, one unlikely player wants and closely guarded pie. a slice of the TABs' lucrative a chequered history. Norfolk Island has had as a penal colony Despite beginning life to the 'Bounty' mutineers, and later home a sleepy tourist destination, it evolved into except for a recent grisly murder, no track of its own, but now, although it has $11 billion-a-year racing industry it's taking on Australia's of Tabcorp's wagering division, and chief executive Michael Piggett, isn't happy about it.

and other Pacific island They followed Vanuat and betting operator that have opened up tote for several and they've been going on now well, many years reall setting themselves u of off-shore operator of taking bets from the mainland, with a primary purpose to the mainland to bet o providing no racing themselve they're referred to as pirates but simply, you know, an Australian territory Norfolk Island is actually business venture, AusTOTE but the actions of its latest by the mainland operators. are seen as simply un-Australian wanted to remove their taxe If the State Governments tomorrow OK, you can have a free bet, or the racing industry said, "That' a 5% take-out rate as well, obviously the TAB could offer but clearly that can't be sustaine a healthy racing industr if you want such as we have in Australia and was granted, Last year AusTOTE applied for, a paramutual betting licence, with gaming giants meaning it could compete like Tabcorp and the TAB. the Australian horse-racing industry Once their exclusive domain, now has an exciting new yearling.

in the establishment No-one, I guess, as a licensing jurisdictio considered that Norfolk Islan the totalisator market in Australia might emerge as a participant i

chief minister. Mike King was once the island's but now runs AusTOTE. He still lives here but a welcome asset It's a modest outfit some 1,500 permanent residents. for the island's a reasonable retur I'm wanting to make in AusTOTE, on the investment we've made I have to sa but at the same time, for the Australian punter I'm a strong advocate and I firmly believe extracted from the Australian punter the commission that has bee excessive for a long time has been excessive and has bee I think it's fair to sa attracted to the AusTOTE product that punters have been favourabl in meaningful terms to a product Why would you not be attracte you with a 90% better return which in some 50% of races provide He could be right.

to gain traction, Certainly AusTOTE is beginning

on some thoroughbred races. attracting pools of up to $10,000 guys like TAB Do you think they're going to give a bit of a run for their money Without doubt. Of course they would for a better price. Punters always looking that's got to be a good thing. If we get a better return, But for the regulars, is racing's lifeblood. their favourite haunt From the punter's point of view,

the less the operator takes out, the better the return to the punter but unfortunately we don't live in that sort of world where who then supports racing Last year Tabcorp's operations, the TABs in Victoria and NSW, would have contributed $400 millio to the State coffers, would have contribute some $370 millio to racing's coffer and that is reall what makes the industry work But according to Mike King, AusTOTE has offered to pay the racing industry a fee. The criticis that we're not contributing directl to the racing industr in terms of a licence fee or a product fee, that is a valid concer but I have to sa that right at the very outset we sought guidance from the Australian Racing Boar on how we might contribute to the industr and that request for guidance was simply ignored Racing's other wild child, betfair, which hopes to secure a licence from the Tasmanian Government later this month has also offered to cough up. I'm quite familiar with betfair at the moment. Obviously been quite aware

that it is illegal to be using it in Australia but I think if it became legal, punters would be mad not to take advantage of better prices. Other punters believe AusTOTE's Internet and telephone-onl presence may be a disadvantage. Do you reckon these guy are going to give these great, big you know, the giants of the industry, a bit of a run for their money They're not, because the TAB have shopfronts, end of story. People can walk into TABs, they can put bets on, take their tickets away.

They don't have to open accounts, no-one keeps track of them. But there is one thing AusTOTE has the big totes don't, the support of this man, one of Australia's biggest bookmakers. Last month, Mark Reed's International All Sports aquired a majority stake in AusTOTE and sees this year's Spring Racing Carnival as the big test. AusTOTE will become the discount totalisator in Australia It's quite remarkable that in today's world of competitio and competition polic that this oligopoly is able to ru the way it's been allowed to run What has happened because of this cosy relationshi

is that the Australian punter is now paying almost twice as muc commission for his bet than people in other type of gaming And, consequently, Australia horseracing has lost market share Reed believes AusTOTE only needs to secure 2.5% of the industry, or a turnover of $275 million, to be a real success. We'll get it There's no questio

because the product we're offerin will be so price competitive with the price

the product offere by the totalisator oligopol that the punters around Australi that are price-sensitive

will move towards our model And years on the track have hardened him to the big players' tactics. We've been heavie for some years now and basically it's very difficult for us to grow our market share I've been in this business now for almost 10 year and in that time I still only have 1.5% of market share Well, I think we've see Mark's companies aroun in sports betting for some time and other activitie that have always had the statement they're going to take awa a lot of the TAB's business We haven't yet seen that occur But like Norfolk Islanders, Reed isn't one to give up a fight. If we get that sort of treatment, you can bet your life we'll be squealing like hurt pigs It's a territory of Australi and has the same right under the constitutio as the Northern Territor and the ACT Katrina Nicholas reporting.

And that's Business Sunday for today And if you'd like more information on any of our stories: Sunday is next.