Manufacturing

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.

Bull market lets activists see virtue in passivity

26 Jan 2018

Bill Ackman, who lost his fight with ADP, has taken a stake in Nike but isn’t pushing for change. Dan Loeb sat back as Honeywell’s new boss ignored his advice and beat his targets anyway. Even pushy hedge funds can be tempted to simply ride the waves when a rally lifts all boats.

Hohn’s LSE/U.S. mashup is tantalising but tricky

26 Jan 2018

After a failed boardroom coup, hedgie Chris Hohn reckons the $20 bln London Stock Exchange could be bought by a U.S. rival, according to Sky. A deal with, say, ICE, would create savings and scale in derivatives clearing. But the latter could prompt the UK government to object.

Make in India clashes with America First in Davos

23 Jan 2018

Narendra Modi and Donald Trump share strongman characteristics and both have a zero-sum approach to trade. The Indian premier needs to boost manufacturing just as the U.S. president wants to do the same. The Asian nation has the most to lose if it fails to realise its vision.

Bitcoin’s siren song could send TSMC off course

18 Jan 2018

Surging demand for processors used in mining digital tokens boosted results at the world's top contract chipmaker. That helps make TSMC less dependent on smartphones. When the $210 bln giant plans future investment, though, placing big bets on crypto-currency would be foolish.

Ex-Im revives just as it’s least useful

19 Dec 2017

A Senate committee rejected the nomination of Scott Garrett, a vocal critic, to lead the bank. It’s a sign that Ex-Im is bouncing back from its nadir in 2015. But with the economy roaring and tax cuts coming, the result may be mostly a small stimulus for big firms like Boeing.

Fossil-fuel slowdown spreads pain at GE and beyond

7 Dec 2017

The conglomerate is laying off 12,000 people in a power division that lights up 30 percent of the world. It blamed overcapacity amid a shift from coal and gas to renewables. Other divisions closely tied to fossil fuels are also ailing. GE’s woes suggest a wider shakeout ahead.

Microchip boom short-circuits Singapore’s growth

28 Nov 2017

Revised GDP revealed a surprisingly strong 5.2 pct quarterly lift for the city-state's $300 bln economy. As in other parts of the world, however, the expansion has yet to power wages or jobs. Cyclical semiconductor output flatters the figures and warrants investor caution.