Industrials

ABB’s soul-searching is dragging on too long

20 Apr 2016

The Swiss engineer says it needs until October to decide what to do with its Power Grids unit, under review since the autumn. CEO Ulrich Spiesshofer deserves credit for improving the division’s operational performance. But the decision to sell the unit looks clear enough now. 

VW shareholders on cusp of painful clarity

18 Apr 2016

The carmaker has until April 21 to agree how many dirty cars it should buy back to avoid crushing legal liabilities from its emissions scandal. Investors will also learn how badly business has been hit. Both should show whether VW’s potential $80 billion crisis buffer is enough. 

Homebuilder spat highlights founder-activism risk

12 Apr 2016

The push by Pulte’s founder and largest shareholder to oust the CEO is backfiring. His case looks odd, and the board and investors support the boss. Some poor judgment on corporate governance isn’t helping Pulte’s cause either. Such fights are best left to professionals.

Fat VW bonuses merited – but only after its rescue

8 Apr 2016

The stricken carmaker’s top brass is insisting on 2015 bonuses, German media report. Boss Matthias Mueller and his peers indeed deserve to be paid well – but only if and when they have saved VW from an existential crisis. Deferring variable pay would be a fair compromise.

Wanted: candidates for Europe’s worst CEO job

6 Apr 2016

Air France-KLM’s boss Alexandre de Juniac has vacated an unenviable managerial position. Europe’s weakest legacy carrier is hobbled by high costs, mighty unions and a wayward state shareholder. His successor will need fluent French, modest pay expectations, and little ambition.

Peugeot’s Tavares might be the anti-Marchionne

5 Apr 2016

The French carmaker’s conservative short-term targets have disappointed. Yet CEO Carlos Tavares is probably just being realistic. It’s a sharp contrast with the bullish goals of Fiat boss Sergio Marchionne. Despite the differences, both are heading towards the same place.

Buying Terex could make Zoomlion too big to fail

4 Apr 2016

As China’s construction boom has turned to bust, the machinery-maker’s profit hit a 15-year low. Sealing the $3.4 bln purchase of its U.S. rival looks designed to raise Zoomlion’s national profile and secure access to credit that may allow it to muddle through the downturn. 

Pensions not steel are Tata’s big UK headache

31 Mar 2016

The Indian group’s British plants have issues, but could be rendered profitable. The bigger challenge is funding shortfalls in its pension scheme for 130,000 members. If a new acquirer could find a workaround and new investment, British steelmaking could still work. 

Sherwin-Williams deal tinted trustbuster yellow

20 Mar 2016

The U.S. paint maker is buying rival Valspar for $11.3 bln. A healthy premium exceeds the value of expected cost savings, raising doubts about the financial logic. And Sherwin’s avowed confidence of passing regulatory muster is colored by terms that may give shareholders pause.

U.S. anti-gun rulings put freer markets in sight

8 Mar 2016

Courts have upheld assault-weapons bans, adding heft to a Connecticut suit that tests laws shielding firearms firms from liability. The case is still a stretch, but growing assent to gun-rights limits may force the likes of Remington to compete without unfair legal protection.

Dow-DuPont deal would be tough nut for interlopers

7 Mar 2016

German chemical giant BASF may be considering a counterbid for U.S. rival DuPont. The price would have to include a whopping premium – and cover a $1.9 bln break fee. The tax benefits alone could make the agreed-upon $130 bln union and spinoff with Dow Chemical close to ironclad.

Honeywell and UTC give tour of M&A sausage factory

29 Feb 2016

The potential $160 bln merger is worth $108 a share to United Technologies owners, maybe as much as $134. No, wait, it’s $101. Synergies add $40 bln of value. Or is it $23 bln? Maybe zero. Antitrust aside, the back-and-forth offers a glimpse into the messy process of dealmaking.

Scalia’s empty seat reverberates beyond Washington

26 Feb 2016

Dow Chemical is paying $835 mln in a decade-old lawsuit that was heading to the Supreme Court. The company decided the conservative judge’s death changed the balance of the outcome and settled. It’s a reminder that politics surrounding the top U.S. bench has real-world effects.

Peugeot could rev revival by scrapping luxury line

24 Feb 2016

The French group has become one of Europe’s most profitable mass-market carmakers under boss Carlos Tavares, with a 5 pct operating margin in 2015. But a costly plan for a new premium brand risks spoiling the performance. Junking the idea would speed an already healthy recovery.

M&A with Chinese characteristics comes up short

17 Feb 2016

Fosun’s takeover of Phoenix unraveled. Fairchild snubbed a $2.4 bln offer from China Resources. Terex investors are shrugging at Zoomlion. From possible CFIUS blocks to bosses going missing, Chinese buyers bring added risks only partly papered over by higher premiums.

Cox: Scope out the bank in U.S. retail camouflage

16 Feb 2016

The business model of Cabela’s, which is up for sale, resembles a $3.2 bln chain of taxidermy museums issuing unsecured debt to assault-rifle buyers. Most of the profit at the “World’s Foremost Outfitter” comes from a loan book ballooning in ways that should give suitors pause.

Baltic Dry’s economic compass looks wet

16 Feb 2016

The indexed cost of shipping grains and minerals has hit record lows. While its prescience in 2008 may renew fears of a sharp global slowdown, the Baltic Dry has become a far less reliable health indicator. China’s troubles are partly to blame for the fall, but so are too many ships. 

Boeing nosedive reflects fear of wider turbulence

11 Feb 2016

The $78 bln aerospace giant’s shares plunged as much as 12 pct on news of an SEC investigation into its airliner accounting. It looks like an overreaction, but jangly nerves are understandable. After a record run of aircraft deliveries, 2016 is off to a bumpy start.

Maersk hasn’t yet reached its low water mark

10 Feb 2016

Cheap oil and collapsing freight rates hit the Danish conglomerate even harder than expected. A $2.6 bln writedown on oil assets and a dismal year-end sent 2015 net profit down 82 pct. A bleak outlook suggests Maersk’s dividend, and its valuation, may be unsustainable.

Arcelor does more than needed, less than enough

5 Feb 2016

After a $7.9 bln net loss for 2015 and big writedowns, the steelmaker has launched a $3 bln rights issue. It buys time for a cost-cutting programme, but ArcelorMittal’s real issue is outside its control: the aggressive supply tactics of Chinese steelmakers and Australian miners.