Week in Review, December 14 A round-up of some of the week's most significant corporate events and news stories. EADS to cut 5,800 jobs as part of consolidation EADS, Europe's biggest aerospace company, this week announced 5,800 job cuts at its defence and space businesses in Germany, France, Spain and Britain, writes Carola Hoyos. As many as 1,450 of the redundancies could be compulsory if EADS is not able to transfer enough people to its booming civil aerospace business or find other voluntary ways such as early retirement. Week in Review Though politicians and union leaders in France and Germany grumbled, EADS does not expect them to impede the three-year process in which EADS will be renamed Airbus Group and its space, defence and military aircraft divisions will be consolidated into one subsidiary called Airbus Defence and Space. Tom Enders, chief executive, said he was neither the first nor the last to have to adapt to the harsh reality of falling defence spending in Europe. In an interview with the FT later in the week, he warned that European politicians needed to invest in their defence industries and allow consolidation or risk losing the ability to build complex equipment such as fighter jets. But he was pessimistic about Thursday's EU defence summit in Brussels, noting that he had heard many declarations about defence over the past 20 years. He said the outcome this time had to be concrete, with money pledged and deadlines set - for example for a new drone development - if the industry was to take seriously the EU's efforts to collaborate on defence procurement. Last year Germany's Angela Merkel blocked Mr Enders" plan for a €36bn tie-up with BAE Systems, Europe's biggest defence company. He said he would concentrate on his successful civil business instead, noting, however, that he would not exit the defence business altogether. Volcker rule on proprietary trading clears final hurdle US regulators this week approved the long-awaited Volcker rule aimed at stopping banks from making risky bets that could hurt the financial system, writes Gina Chon in Washington. The Volcker rule, named after former Federal Reserve chairman Paul Volcker, bans banks from making speculative bets from their own accounts, a practice known as proprietary trading. The rule is one of the critical provisions of the landmark Dodd-Frank financial reform legislation of 2010. Despite its importance, it has taken almost four years for the rule to be finalised, partly because of arguments between five regulatory agencies about the wording of the legislation. Jack Lew, Treasury Secretary, ordered the agencies in July to finish the measure by the end of the year. The rule requires chief executives to attest in writing that their companies are setting up appropriate procedures to comply with Volcker provisions Now that the Volcker rule is finally a reality, banks are poring over the text to digest how it will affect their businesses. The final version of the rule gave banks more flexibility on market-making activities in which they buy and sell securities and bonds on behalf of clients. But it is more stringent when it comes to hedging, mainly because of the desire to prevent another loss of the order of the one JPMorgan took in 2012. The bank lost more than $6bn in a derivatives trade that went awry. The rule also puts investment restrictions on banks when it comes to hedge funds and private equity funds. It requires chief executives to attest in writing that their companies are setting up appropriate procedures to comply with Volcker. Wall Street lawyers are studying the rule to see if it is vulnerable to a legal challenge. A lawsuit could be led by Eugene Scalia, a partner at law firm Gibson Dunn and son of Supreme Court Justice Antonin Scalia, who has successfully sued regulatory agencies in the past. TV set to lose advertising crown to digital media Television's reign as the king of media is starting to falter, writes Emily Steel. New ad spending forecasts released this week show that the medium's share of global advertising is expected to peak this year following three decades of sure and steady growth. Television should capture 40.2 per cent of the $532bn global ad market in 2013 before falling to 39.3 per cent of the total market in 2016, according to predictions from Publicis" ZenithOptimedia. The shift signals a tipping point in the media industry as it is being reshaped because of the rise of digital. For years, explosive growth in digital advertising came largely at the expense of print media, such as newspapers and magazines. Now, advertisers are racing to keep pace as consumers spend an increasing amount of time across many digital screens. While marketers still are expected to increase their ad spending on television, fast growth in digital ad spending - particularly online video and mobile - is stealing the spotlight. Indeed, a separate advertising forecast this week predicted that US ad spending on YouTube would surge 50 per cent to $5.6bn in year. Television ad spending in the US, meanwhile, should increase just 2.8 per cent to $66.4bn this year, according to eMarketer. Digital media companies, meanwhile, are not standing still. Google this week began to offer marketers the ability to buy ads in real time across its network of 2m sites based on whether or not they are seen. The initiative could open the floodgates to more digital ad spending, as it is estimated that as many as half of the digital ads that marketers buy are not seen at all, as they can only be viewed if a website visitor scrolls to the bottom of a page. Peugeot moves away from GM but forges China ties PSA Peugeot Citroën moved further away from its US industrial partner General Motors this week but closer into the embrace of its state-owned Chinese one Dongfeng Motor, writes Michael Stothard in Paris and Henry Foy in London. GM said it would sell its entire 7 per cent holding in Peugeot taken last year as part of an alliance designed to help both companies through the worst European car market for two decades. At the same time GM gave its blessing for Peugeot to pursue a greater tie-up with Dongfeng, a partnership that will include a large capital injection into the French group in return for technology sharing. The agreement between Peugeot and Dongfeng is set to involve a €3bn-€4bn capital raising by Peugeot and a deal to develop and produce low-cost small cars for southeast Asian markets, said two people briefed on the discussions. Peugeot and GM said Thursday their alliance would continue to be strong despite the share sale. The companies said progress on cost savings from the alliance had been slower than expected, however. Peugeot on Thursday took an impairment charge of €1.1bn for its automobile division to reflect lower synergies from its GM alliance as well as weaker than expected car markets and unfavourable exchange rate shifts. The impairment charge, as well as the news surrounding the GM sale, helped send shares in the French carmaker down 20 per cent this week. The stock is still up 75 per cent this year, however. Bostock quits scandal-hit RBS for Santander UK In the world of banker transfers, Nathan Bostock was the man of the week. Mr Bostock, appointed finance director of Royal Bank of Scotland only 10 weeks ago, quit abruptly on Tuesday night to take up a role at Santander UK where he will be chief risk officer and deputy chief executive, writes Patrick Jenkins, Banking Editor. For the time being at least, it is a smaller job at a smaller bank. But people close to Mr Bostock said he was moving for two main reasons. After four years at RBS - mostly as chief risk officer - he was fed up with the tensions of helping to stabilise an institution that, being majority state-owned, continues to be lambasted by politicians. But Mr Bostock was also drawn by a promising future at Santander. He is now the leading candidate to succeed Ana Botín as chief executive of Santander UK, potentially ahead of a flotation by the group's Spanish parent within a year. The move has left RBS with yet another problem to resolve. The past six weeks have been torrid, with an IT systems failure and another large fine for manipulating benchmark interest rates. The day after Mr Bostock announced his defection, there was further bad news, with a $100m fine from US authorities over sanctions breaches. For Santander, the hire was seen as a coup. But it has caused some ructions internally. Ms Botín's three most senior existing executives - Steve Pateman, UK retail chief; Stephen Jones, finance director; and investment banking boss Jacques Ripoll - have all apparently been sidelined in the race to succeed her if she moves to role of chairman. ● Germany's Adidas tackled Sports Direct, banning the retailer from selling Chelsea FC kit next season. Mike Ashley, Sports Direct's founder, cried foul at the German attack. Dave Forsey, chief executive, said: "We have not taken it well, from Mike's perspective." It sounded rather an understatement ... ● Crispin Odey, the hedge fund manager famed for planning a swanky neoclassical chicken coop at his rural retreat, placed a hefty bet against Manchester United. His fund revealed a short position worth about $5m in the club, amid its current lacklustre performance. But he probably has not put all his eggs in one basket ...