Industrials

Capital Calls: Disney’s Marvel flop, US inflation

14 Nov 2023

Concise views on global finance: Bob Iger’s prized acquisitions Marvel, Pixar and Lucasfilm are losing their mojo, just as his dealmaking mettle is being tested; inflation has eased even as growth looks strong, but warnings from consumers and companies signal potential weakness.

Workers are missing cog in US manufacturing gears

7 Nov 2023

Government subsidies have sparked a construction bonanza, with spending on microchip, EV and other factories running at an annualized pace of $200 bln, 60% more than a year ago. Buying the needed equipment comes next. Filling all the new jobs, however, will be the hardest part.

Orsted’s losing US bets need rethink of UK plans

1 Nov 2023

The Danish wind giant lost a fifth of its value after a surprising $4 bln impairment in the States. That erases most of the capex spent there. Yet it still wants to invest in the world’s biggest economy to meet its lofty targets, a risky gamble that requires restraint in Britain.

KKR’s Japan chip gear IPO clears high first bar

18 Oct 2023

Kokusai’s $720 mln float is the country’s largest in five years and coincides with the bottom of the semiconductor cycle. Pricing was cautious and two investors bought nearly half the offer. But with war drums beating, Japan’s elongated, inefficient listings process is in focus.

Next EU chief will need cash more than trade wars

10 Oct 2023

Ursula von der Leyen kicked off her campaign to stay European Commission president by attacking China’s car subsidies. But what the bloc craves is a plan to grow its economy and enlarge eastwards, including finding $411 bln for Ukraine. A bigger, better Europe won’t come cheap.

Germany risks letting a good crisis go to waste

3 Oct 2023

Europe’s largest economy is on track to shrink this year. The immediate causes are lower exports to China and higher energy prices. But decades of under-investment will continue to crimp growth unless Berlin ditches its hostility to fiscal stimulus and comprehensive reforms.

Uncle Sam risks recession by a thousand cuts

22 Sep 2023

A government stoppage would shave a sliver from US economic expansion. Restarting student loan payments will have a similar effect. Add striking autoworkers, high oil prices and costly mortgages, and 0.8% growth forecast for the fourth quarter and 0.5% in early 2024 look shaky.

Deaths haunt Corporate America via labor strikes

15 Sep 2023

Auto workers, pilots, and truck drivers have had upper hands in labor strikes. That’s despite labor supply healing. One reason may be that men have left the workforce. Opioids and Covid are partly to blame. But it highlights the dangers of demographically concentrated jobs.

Auto strike may put Carvana’s turnaround on detour

7 Sep 2023

A walkout at Detroit’s Big Three automakers may freeze new-car supply, pushing up old vehicles’ prices. Yet that’s bad news for the used-car dealer, which books fatter profit when inventory is cheap. Supply snarls threaten a re-run of post-pandemic woes that tanked shares by 99%.

Orsted’s issues fan way beyond the United States

30 Aug 2023

Denmark’s $27 bln wind giant saw shares plunge over 20% after it said it may need to write down $2 bln of US projects. Yet Orsted’s supply chain and subsidy problems may also upend progress in the UK. And by recently implying all was well, management has lost credibility.

Vietnam’s Tesla charges itself up for a big fall

16 Aug 2023

VinFast shares leapt 270% on their Nasdaq debut following the group’s $27 bln merger. A cosy shareholding structure boosted the valuation to 16 times its US rival but tycoon Pham Nhat Vuong’s EV maker has teething problems. Outsiders will be exacting when he needs to raise money.

Capital Calls: Siemens

10 Aug 2023

Concise views on global finance: The rot at the 110 bln euro German industrial group is spreading from its misfiring energy unit to the core automation business.

Acquisitive CEO’s pay push belongs in scrap heap

7 Aug 2023

After beating back unhappy shareholders to complete a $7 bln junkyard deal, RB Global boss Ann Fandozzi sought to accelerate her equity grants. When the board said no, she apparently quit. It’s a welcome case of directors swinging the wrecking ball on runaway CEO rewards.

Sweaty Europe can kill two birds with one pump

7 Aug 2023

In the ‘era of global boiling’ more Europeans need air conditioners. But if they instead installed heat pumps, the bloc could cut carbon emissions and cool as well as warm citizens’ homes. All the more reason for governments to be more generous on subsidies than they have been.

Capital Calls: PIF, Siemens Energy

7 Aug 2023

Concise views on global finance: Saudi Arabia’s big sovereign wealth fund is getting bigger; the $13 bln German company unveiled a $2.4 bln charge due to persistent wind turbine problems.

Toyota tops up tank to fuel a hard drive

2 Aug 2023

Rising sales helped net income surge ahead by 75% in Koji Sato’s first quarter behind the wheel of the $230 bln Japanese carmaker, pushing the stock to an all-time high. To keep up the pace, though, he has to speed electrification and outpace competition from China and beyond.

How Europe can square the circle on green economy

1 Aug 2023

Shifting away from fossil fuels is an opportunity for the bloc, argues economy tsar Paolo Gentiloni in this Exchange podcast. But it will have to overcome challenges, such as US competition for investment and the EU’s own narrow set of financial tools.

Capital Calls: LVMH’s US dip, Rolls-Royce revival

26 Jul 2023

Concise views on global finance: Shares in the 413 bln euro luxury conglomerate fell 4% as investors fretted about weakness in its once booming US business; the UK airplane engine maker raised its profit forecast for 2023 as its new CEO benefits from travel tailwinds.

Capital Calls: European steel

21 Jul 2023

Concise views on global finance: Sweden’s $6 bln group SSAB misses profit forecasts as Europe’s demand tanks and steel prices shrink.

Britain upgrades to also-ran in EV battery race

19 Jul 2023

India’s Tata will spend $5 bln on a new gigafactory in England, helped by state subsidies. After Britishvolt’s demise, it suggests the UK can still lure green tech. But with more needed just to maintain its current auto output, Britain is still off the pace versus the EU and US.