Manufacturing

Foxconn leaves room for governance improvement

11 Jun 2019

Taiwan's $32 bln iPhone assembler has missed an opportunity with its first investor day. A management rejig is encouraging, but stops short of a succession plan. Worse, it fails to clarify departing boss Terry Gou’s future role. Shareholders will be left only a little wiser.

BMW-Daimler: a more logical German M&A champion

20 Mar 2019

Berlin wants a merger of Deutsche Bank and Commerzbank to protect two flagship companies. Its second- and third-biggest carmakers would be a better pair, and might actually strengthen each other. The risk is that shareholders and policymakers only realise when it’s too late.

The Exchange: Hollowing out white-collar jobs

13 Feb 2019

In “The Globotics Upheaval” Richard Baldwin predicts machine learning and instant communications will disrupt service workers just as automation and offshoring upended Western factories. He tells Breakingviews what’s coming, and what we can do to slow it down.

Foxconn’s U.S. debacle offers an economics lesson

31 Jan 2019

The iPhone maker and Wisconsin taxpayers made a $10 bln bet on a manufacturing revival in the United States. Now Terry Gou's outfit says making flat screens there is uncompetitive, and jobs will be in research and design. It's a reality check for Donald Trump's industrial dream.

Mary Barra belatedly supercharges GM’s strategy

26 Nov 2018

Her decision to scrap low-selling brands and thin the $53 bln carmaker’s bloated executive ranks was overdue. But cutting $6 bln of costs gives GM more fuel to weather trade wars and slowing sales – and to inject into the electric-vehicle and self-driving race Barra hopes to win.

Musk takes a couple of toes off the pedal

10 Sep 2018

The $45 bln electric-car maker's CEO has promoted an insider to run the autos unit, among other changes, after "in-depth" talks with directors. An experienced outsider would have been better. Musk remains free to overpromise and underdeliver.

Russia will keep on mixing toys and politics

21 Aug 2018

Strong first-half sales at children’s store Detsky Mir will help Sistema, which needs to sell its stake after a costly $1.5 billion settlement with Rosneft. A less politically risky owner might help the rapidly growing toy group’s low valuation. Yet that’s in no way guaranteed.

Foxconn earnings slip is a governance wake-up call

14 Aug 2018

Quarterly net profit at the $50 bln iPhone-assembler badly missed expectations. Steeper costs at subsidiaries and other bets are probably to blame. Boss Terry Gou, though, gives few details on new ventures: without better disclosure, shareholders will be caught off-guard again.

Viewsroom: Sergio Marchionne’s legacy

26 Jul 2018

The sudden death of Fiat Chrysler’s CEO has robbed the car industry of one of its most colorful – and successful – leaders. Antony Currie, Rob Cox and Lisa Jucca look back over his 14 years at the wheel and discuss what’s on the road ahead for his successor Mike Manley.

Boeing’s $3.8 bln deal looks sleek, may not fly

5 Jul 2018

The aerospace giant is paying a fair price for 80 pct of Brazilian rival Embraer’s commercial-jet unit. Boeing can use the new joint venture to extend its dogfight with Airbus across the full range of aircraft. But Brasilia hasn’t signed off yet, and an election looms in October.

Tesla upshift puts focus on bigger battles

2 Jul 2018

Elon Musk had to pull out all the stops to hit his oft-postponed Model 3 production target. It will cheer his faithful followers and make it easier to raise capital. But for the electric-car maker to really cruise, he must prove he can sustainably increase output and make money.

China’s gentle German auto bid may work too well

25 Jun 2018

The Wang family, owners of a Chinese car parts supplier, made an $882 mln offer for headrest maker Grammer. A pledge to save jobs and the buyer’s size make a full takeover tricky. Yet shareholders wary of the increasingly messy governance probably won’t want to stick around.

Rolls-Royce investors wisely keep the seat belt on

15 Jun 2018

The plane engine-maker aims to generate 1 pound of cash per share over the mid-term, quadruple this year’s estimate. Despite the bullish new target, shareholders don’t look to be pricing it in fully. A distant horizon and history of one-off costs explain why.

Rockwell dabbles in financial overengineering

11 Jun 2018

Paying $1 bln for a non-controlling stake in a rival software company seems odd. PTC doesn’t need the cash. Such shareholdings in peers can have logic, as some drugmakers have shown. The bar is high, though, especially after Rockwell last year turned down a takeover at a premium.

Autos investors too quick to call Trump’s bluff

24 May 2018

German carmakers export a ton of vehicles, yet their stocks fell just 3 pct after the U.S. president threatened import tariffs. It implies they think Washington is just posturing, or that BMW and the like can mitigate the impact. That may prove to be overly optimistic.

Peugeot investors jump the gun on Opel turnaround

24 Apr 2018

The French carmaker’s shares trade at a premium to European peers despite its below-average operating margin. Investors are already counting on a turnaround at Opel, the loss-making business bought from GM last year. A German labour dispute means there’s room for disappointment.

GE offers 100 bln reasons to divorce CEO and chair

20 Apr 2018

That’s how many dollars of investor booty the industrial group has incinerated since John Flannery replaced Jeff Immelt. The new boss wants to create more accountability. But that starts at the top. An investor proposal to separate the roles deserves shareholder support.

Michelin’s $1.7 bln UK rubber deal stretches logic

20 Mar 2018

The French tyre maker is buying conveyor-belt group Fenner, whose clients include miners. Michelin should be able to flog more products in Asia and South America, and drive harder bargains with suppliers. Even then, it will struggle to earn an acceptable financial return.

U.S. factories add jobs but could use more robots

2 Feb 2018

The economy added 200,000 jobs last month, including 15,000 in manufacturing. Donald Trump often talks of boosting the now smallish sector, but productivity has been near-stagnant and wage growth is weak. For all the fears of machines taking jobs, having more of them would help.

Auto industry exposes NAFTA’s blind spot

29 Jan 2018

Canadian negotiators have pointed out that the North American treaty doesn’t capture the value of high-tech equipment in autos, Reuters reported. A rule change to reflect tech advances is due. Complex supply chains call for new ways of measuring trade flows.