Michael Harrison's Outlook: Royal Dutch Shell rings the changes as the man from Nokia gets the call

He is only 54, so he was hardly going to hang up on his career just yet. He is available, because he ceases to be chief executive of the Finnish mobile phone giant at exactly the same time as the Shell post becomes vacant. And he fits the most important criterion, being neither British nor Dutch. Shell insists there were candidates of both nationalities on the shortlist of half a dozen candidates drawn up by the headhunters. But the stop-gap chairman, Aad Jacobs, rather let the Big Cat out of the bag a fortnight ago when he confided that his successor would ideally be neither, to avoid upsetting the delicate balance of power within the company.

If hindsight is nice, then foresight is just as useful and it must be assumed that Mr Ollila knows what he is letting himself in for now that he is preparing to leave the cocoon that has been Nokia for the past 20 years.

With luck, the careless way in which Shell mislaid 4 billion barrels of reserves will be a dim and distant memory by the time he arrives next June and the company will have bedded down under its new unified structure. But the "enterprise first" culture Shell claims to have inculcated has not stopped it from being accident-prone as the 100 per cent cost over-run on the $10bn Sakhalin project in Siberia demonstrates.

The £500,000 salary Mr Ollilla will draw for working two or three days a week seems to be the going rate now for the part-time job of chairing a large multinational. But the fast-moving world of mobile phones, where what seems to matter more than anything is predicting the next teenage craze in handset design, could hardly be further removed from that of big oil and the "elephant" projects in which Shell specialises.

That's not the point, replies Shell. We have got what we were after - a strategic thinker with a big vision. Mr Ollila is that, having spotted before almost anyone else that the mobile phone would one day take over the world. Whether Shell will do likewise, or at least wrest back number two spot from BP, will depend on Mr Ollila justifying all the gushing tributes he received yesterday.

Bank cuts rates, GKN cuts jobs

In the past week the big battalions of British industry have lined up on the side of a cut in interest rates and yesterday the Bank of England duly delivered. But it wasn't the member firms of the CBI or the Engineering Employers Federation that were on the Monetary Policy Committee's mind as it shaved a quarter point from the cost of borrowing. Rather the cut was designed to arrest the decline in consumer spending without triggering a fresh high street boom.

Indeed, for a growing number of British manufacturers, the rate cut will have been neither here nor there since they are increasingly over there rather than back here.

GKN, which announced 2,500 job cuts in its automotive components plants, is a perfect case in point. Twenty years ago, that kind of announcement from a bellwether of the UK economy would have been a body blow to British manufacturing. But today, the percentage of GKN's sales and production accounted for by the UK can be counted on the fingers of two hands. Nearly all of those job losses will be in France and the United States.

You need hardly ask where they are being relocated to. But if you were a GKN employee in Brazil, Mexico, Poland or China, the future would be looking brighter today than it was before. In China, GKN is doing something that it probably never thought it would do again - building a factory to make engine cylinder linings. That will be followed by a plant to make transmission products. By this time next year it will have doubled production from its plants in Poland and Slovakia and by the year after that it will be making 70 per cent more in Mexico.

Just as consumer pounds chase the best bargains, so manufacturing is moving from high-cost, low growth markets to low-cost, high-growth ones. ICI, another former bellwether, which also reported more job losses but better profits yesterday, is another prime example.

This is not to deny that consumers aren't important - they are, after all, what has kept Britain from recession unlike large parts of the eurozone. It is easy to understand, therefore, why they loom so large in the Bank's thinking. But it does make you wonder how much longer high street spending and the housing market can keep the UK economy afloat.

Sir Fred's great leap forward

Oh, to have been a fly on the wall at Royal Bank of Scotland's analysts' meeting yesterday where one brave soul was foolhardy enough to ask Sir Fred Goodwin if he wasn't turning into a bit of a megalomaniac. Fred the Shred, the banker who once likened takeovers to "mercy killings", becoming crazed with power? Surely not.

The "m" word has reared its head because, having conquered the UK with the purchase of NatWest and planted its flag in America, RBS is now widely assumed to be eyeing a move into China.

China is still a fledgling and somewhat opaque market for western banks and one where RBS has no experience whatsoever. Since March, when the rumours first surfaced about RBS taking a 10 per cent stake in Bank of China its shares have underperformed, and yesterday they took another hit after RBS failed to reassure the market. While not denying that he was China-bound, Sir Fred responded that RBS would only do a deal if it fitted inside the "risk envelope" the bank has devised.

Like most companies with pretensions to be world players, RBS will find it hard to ignore China. But the potential reward of tapping into a market which boasts $1.5 trillion of personal savings, is matched by the risk of exposure to the wall of bad debt China's state-owned banks have accumulated over the years.

This has not stopped HSBC from buying stakes in Chinese banks. But HSBC has been there for a century and a half and so understands a little more about the country.

The danger of RBS over-stepping itself by taking a toehold in China is compounded by the fact that its UK retail lending business is doing poorly. It also jars with what investors had assumed was the international strategy - ie further growth in America where its Citizens Bank is making a good living by lending to what is politely termed the sub-prime market.

Sir Fred, sounding anything but a megalomaniac, insisted RBS was continuing to look hard before leaping into China. But if the reports from Beijing are correct, then he has already made up his mind.

m.harrison@independent.co.uk

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