This is an audio transcript of the FT News Briefing podcast episode: ‘Lula’s comeback, Bolsonaro’s silence’

Marc Filippino
Good morning from the Financial Times. Today is Tuesday, November 1st, and this is your FT News Briefing.

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Brazil will have a new president, but the race was so close, when Lula takes over, he’ll lead in the shadow of the man he ousted.

Michael Stott
Bolsonaro almost won. And Lula has promised to govern for all Brazilians and to try to heal the wounds. But it’s gonna prove very hard in practise in such a deeply divided country.

Marc Filippino
Plus, two of the world’s biggest carmakers, Renault and Nissan, are trying to fix their marriage. It’s been on the rocks for years. I’m Marc Filippino, and here’s the news you need to start your day.

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US president Joe Biden yesterday urged Congress to raise taxes on oil companies unless they increase their output and bring down gas prices. Biden made his comments just days after one of the biggest oil companies, ExxonMobil, reported record quarterly profits. Biden’s remarks also come a week before the crucial US midterm elections.

Myles McCormick
Biden is hoping that by ramping up the attack lines on oil companies, he can either persuade them to pump more oil and potentially bring down the price at the pump in the medium term or deflect some of the blame that voters are placing on his doorstep.

Marc Filippino
That’s the FT’s US energy correspondent Myles McCormick, as to whether President Biden can actually do this.

Myles McCormick
In reality, the chances of something of this kind being brought in are pretty slim. Just simply down to congressional knots because of the narrow majority the Democrats have, especially in the Senate. The chances of them being able to push through something like this in the next few months are minimal.

Marc Filippino
Myles McCormick is the FT’s US energy correspondent.

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In Brazil, Luiz Inácio Lula da Silva pulled off a stunning victory in this weekend’s presidential election.

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Marc Filippino
Lula, as he’s known, won by a tiny margin over his opponent, current President Jair Bolsonaro. But the rightwing Bolsonaro still holds a lot of power, which means the left-leaning Lula faces big challenges on the political and the economic front. To talk more about this, I’m joined by our Latin America editor, Michael Stott. Hey, Michael.

Michael Stott
Hi, Marc.

Marc Filippino
So, Michael, at the time that you and I are speaking, President Bolsonaro has not conceded defeat. What’s the delay about?

Michael Stott
You know, it’s quite unpredictable what will happen next. We can only guess, right. But by personal guesses that he probably won’t launch a major challenge, because I think if he was going to do that, he would have done that immediately. Like as soon as the polls closed, he would have cried foul. It may be possible that he’s scared of directly contesting the result, because if he tries to do anything like that, he could end up stripped of his political rights and unable to contest the next election. And so by not saying anything, he’s sort of not endorsing Lula’s win, but he’s also not, you know, publicly questioning it. So it may be that he just continues with that posture and just continues to say nothing.

Marc Filippino
So, Michael, you’re in Rio de Janeiro and people are processing what was the closest election in Brazil’s history. What’s the mood like right now?

Michael Stott
Yes, it was an extraordinarily tense count, Marc. And you could feel that almost in Rio. The apartment buildings nearby where I spent yesterday evening, everybody was glued to the numbers that were coming up and updating all the time as the count proceeded. But it was actually only right at the end when 99 per cent had been counted that Brazilian broadcasters in the election authority felt confident to call the result. And then there were sort of cheers and shouts.

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The people coming out on the streets and cars honking horns and so on. But it was extremely tense. And that sort of reflected the incredible polarisation and what was a very bitter campaign, with both sides flinging lots of mud at each other, pushing out fake news and calling each other all manner of things.

Marc Filippino
Now, I want to remind listeners that this is Lula’s third term in office. He was president for two terms between 2003 and 2010. Brazil’s economy is in a very different place than it was during those two terms. What is Lula’s approach this time around?

Michael Stott
Yes. So Lula faces some much bigger challenges than he did when he governed last time from 2003 to 10. So when he takes power at the beginning of January, he’s going to inherit a rapidly slowing economy, big global headwinds, particularly in China, which is Brazil’s biggest export market, and very high interest rates, difficulties financing, stretched government finances, and huge expectations from a population who’ve been excited by his pledges to boost spending on welfare, health and education. But of course, we have very little idea at the moment how he’s gonna pay for that. And that’s something that’s been concerning financial markets and investors.

Marc Filippino
Now Michael, what’s your take on this election? The country voted in a leftist, Lula over a rightwing Bolsonaro. What does it say about the tenor of the country?

Michael Stott
It’s a very polarised country and I think it’s a reflection of the strength actually of “Bolsonarismo”, of the political movement that the president has created. That despite everything, despite all the remarks he’s made about women, despite the Amazon problems, despite the pandemic response in which Brazil had one of the world’s highest death tolls, despite all of that, Bolsonaro almost won. So it’s a very polarised nation. Lula has promised to govern for all Brazilians and to try to heal the wounds, which is a laudable aim. But it’s gonna prove very hard in practise in such a deeply divided country.

Marc Filippino
Michael Stott is the FT’s Latin America editor. Thank you, Michael.

Michael Stott
Thanks, Marc.

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Marc Filippino
Two of the world’s most famous car brands are trying to rebuild their relationship. French car company Renault rescued Japan’s Nissan from bankruptcy more than 20 years ago. Their partnership was meant to be a model for how rivals could work together. But four years ago, the relationship took a turn for the worse when Japanese authorities arrested the group’s then chief executive, Carlos Ghosn, on financial misconduct charges.

Peter Campbell
So for almost 20 years, Carlos Ghosn held together the Renault-Nissan Alliance. And when he was arrested in 2018, what everybody actually realised was the alliance didn’t really work very well at all.

Marc Filippino
That’s our global motor industry correspondent Peter Campbell.

Peter Campbell
Some parts of it were integrated, such as purchasing, but almost everything else, the companies were competing with each other and just not playing nicely with each other.

Marc Filippino
So Peter, what was the problem?

Peter Campbell
So every carmaker is intrinsically nationalistic in the sense that they have teams of engineers based in their home countries and they all have their own particular cultures. And trying to get a team of French engineers to work with a team of Japanese engineers was always going to be difficult. So you always have these parallel businesses going on that never really actually had to work together. I mean, one example is when the Renault Zoe came out and the Nissan Leaf came out both around the same time, the company’s first electric vehicles, they were supposed to be almost identical and use lots and lots of common parts. In fact, they couldn’t work together to such an extent, there was only one item in the entire car that was common or shared.

Marc Filippino
OK, so they’re now nearing a deal that will ideally solve these issues. What do you know about the deal so far? What are the key points?

Peter Campbell
One of them is around Renault wanting to spin out its electric vehicle business. One of them is about Renault wanting to spin out its engine business, its old engine business, which it will then wind down. And another is about the capital stake, the amount of shares they own in each other. Now, at the moment, Renault has a 43 per cent stake in Nissan and lots of control over it. Nissan has a 15 per cent stake in Renault, but no voting rights. And this has long been a source of contention and unhappiness in Japan that they feel the French have too much power over them. And what you are likely to see as part of this negotiation is an agreement to equalise that. So they will get voting rights in each other, and that will certainly lay the groundwork for a lot of co-operation in the future.

Marc Filippino
How significant is that?

Peter Campbell
That the fact that the companies are even talking about equalising the stakes is actually a sign of quite how much has changed because people knew this had to change for years and years. But the fact they were actually sitting around the table is an indication they’ve already cleared one of the biggest hurdles, which was a mental hurdle. But certainly both businesses are not in a strong place. Both businesses, I think, understand now that they have to make this work.

Marc Filippino
That’s the FT’s global motor industry correspondent, Peter Campbell.

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You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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