Industrials

China’s next reform: more central planning

26 Jul 2013

The central government wants to cut excess capacity in basic industries by telling 1,400 companies to shut factories. It has to overcome the free-market instincts of local governments and entrepreneurs. But if the plan works, China will be more efficient - and less polluted.

Improving margins will be leaner Siemens’ real test

10 Jul 2013

The German industrial group pleased investors by hiving off two underperforming units. Getting rid of Nokia Siemens Networks and Osram are indeed milestones in refocusing the company. Improving the profitability of the remaining core business remains a bigger challenge.

ThyssenKrupp’s pride well worth 1 billion euros

1 Jul 2013

That’s how much new capital the German steelmaker may need. The RAG foundation, a local rival to the one that controls Thyssen, seems willing to buy a stake. While hurting vanities, this would be an elegant fix to the company’s woes. Pride is a luxury Thyssen can’t afford.

Cinven goes weak at the knees for Rockwood unit

17 Jun 2013

The private equity firm is paying a hefty $2 bln for Rockwood’s CeramTec unit. But at least this is a corporate selloff, rather than yet another “secondary” deal between two PE houses. And there is sound demographic logic in buying one of the leaders in artificial joints.

GE Capital chief exit puts spotlight on Immelt

30 May 2013

Michael Neal may be leaving after eight years running the erstwhile high-flying lending unit. He got GE Capital back in shape after the financial crisis, but it’s no longer the company’s key division. Neal’s departure raises the question of who will succeed GE boss Jeff Immelt.

Eaton-Cooper deal needs revenue synergies to work

21 May 2012

The U.S. industrial group’s $11.8 bln purchase of Cooper nearly defies the norm, where takeovers punish the acquirer’s shareholders. The net present value of future synergies is comfortably higher than the premium on offer, but only if additional sales are to be believed.

UK would gain from intelligent industrial policy

7 Mar 2012

British politicians have long shied away from coherent long-term economic plans. But ad hoc decisions on technologies, infrastructure, immigration and banking are not good enough. Vince Cable, the business secretary, is right to call for a new vision.

Brazil oil riches may sabotage infant firm policy

29 Sep 2011

The BRIC nation wants to build world-beating firms that do more than extract natural resources. Protecting embryonic industries created big winners in Korea and Japan. But unless Brazil can prevent its energy wealth inflating its currency, multinational wannabes could struggle.

China’s super-railways on track for debt troubles

15 Aug 2011

New super-fast railways would struggle to repay their colossal borrowings even before new safety fears, which will push costs up and demand down. The country benefits, since the perks of fast trains aren’t all financial. Not so investors in banks who fund these trophy projects.

Message to Nintendo: call a smartphone maker fast

29 Jul 2011

It slashed its forecast and prices for its newest handheld game device, and its stock plummeted. The strong yen and weak U.S. consumer spending are problems, but Nintendo's nemesis is the iPhone. If it doesn't become a big player in the smartphone market, the game could be up.

Slo-mo activism may be Japan’s best bet

24 Jun 2011

A protest vote at electronics firm Keyence over reappointing the chairman lacks the fireworks of hedge fund TCI's assault on giant Japan Tobacco. But it is no less significant. Activism is slowly chipping away at Japan Inc to use capital more smartly. It bodes well for reform.

Philips could buy its way out of trouble

22 Jun 2011

A profit warning and tumbling shares don't put the Dutch electronics group in play. Its odd business mix deters rivals, and it's too big for a buyout. The new CEO is focused on restructuring. But he could also use Philips' strong balance sheet in M&A to buy growth or cut costs.

China needs price hikes to end power cuts

18 May 2011

Expensive oil and coal have squeezed China's electricity producers. Now some consumers face shortages. Higher prices would help reduce demand. With inflation high and growth a priority, politicians might not like the idea but China would benefit in the long term.

Buffett inadvertently nails it evoking Salomon

30 Apr 2011

The Oracle of Omaha compared David Sokol's Lubrizol dealing to the scandal that rocked the Wall Street firm he partly owned 20 years ago. He described both as inexcusable and inexplicable. The link Buffett missed is that rogue trading at Salomon Bros exposed poor controls.

Security slip is latest setback to Sony comeback

28 Apr 2011

Japan's electronics giant faces lawsuits and red faces after PlayStation data was hacked. But quakerelated production snafus and the global battle over smartphones and tablets pose larger challenges. The breach says less about Sony and more about risks to all networked products.

Schneider may see an undervalued stock in Tyco

14 Apr 2011

It's been years since former CEO Dennis Kozlowski got carted off to jail, and Tyco underwent a major revamp. Yet its valuation has never quite broken free of a discount to peers. That may explain the French industrial group's interest in exploring a $30 bln bid.

Schneider would struggle with $30 bln Tyco bid

13 Apr 2011

The French electrical giant has reportedly approached U.S. security group Tyco, although it is denying ongoing talks. The premium it would have to pay would probably top the value of synergies. Financing the deal would be a highwire act. Schneider might do better to let this go.

Texas Instruments makes smart $6.5 bln bet

5 Apr 2011

The chip company is paying an eyebrowraising 78 pct premium for rival National Semiconductor. But the target is solidly profitable even with its factories running at a slow tempo. Speed them up as this deal should and TI should generate a nice return on its investment.

Four reasons to hedge against Japanese equities

28 Mar 2011

The bright side, so hard to see in the wake of the disaster, is now the consensus in Japan's market. But politics, power shortages, consumer conservatism and the unresolved nuclear crisis are chipping away at the optimism. It is time to hedge against disappointment.

GOME boardroom coup not all bad for shareholders

10 Mar 2011

The Chinese electrical retailer has lost its chairman, who had clashed with jailed founder Huang Guangyu. Bain Capital, brought in to dilute the tycoon's stake, must now make the best of a bad situation. At the very least, investors should benefit from an end to the standoff.