Manufacturing

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.

Emerson’s tilt at Rockwell lacks killer blow

31 Oct 2017

The rejected $28 bln offer for the U.S. automation group represents a premium of just 15 pct, paid partly in stock that has systematically undershot Rockwell’s. With valuations high, an all-cash bid might have tested the target’s independence. That looks beyond Emerson’s means.

Tesla could hit second gear with Shanghai factory

22 Oct 2017

Elon Musk may soon be able to build his electric cars in China. That's essential for catching up or keeping pace with rivals in the fast-growing market. It'll also take pressure off production trouble in the United States. A troubling tariff problem, however, is apt to remain.

Daimler’s reform drive lacks horsepower

20 Oct 2017

Bumper third-quarter sales do little to address the Mercedes parent’s long-term problems, which include a margin-sapping global shift to electric vehicles. Plans to split in three would lift valuations if that led to a separate listing. But progress is at walking pace.

iPhone boost is prelude to bumper year for TSMC

19 Oct 2017

Quarterly results show the leading contract chipmaker recovering after a lacklustre first half, aided by Apple's new iPhones. TSMC's next task is to gain a lead in a new generation of even smaller semiconductors. It looks well positioned to stay ahead of emerging rival Samsung.

Japan is developing a quality-control problem

10 Oct 2017

Kobe Steel admits it sold substandard metals to hundreds of clients. After Takata’s lethal airbags and testing scandals at various carmakers, this is yet another blemish on Japan’s reputation for product quality. Something is going badly wrong with corporate cultures.

Ford’s clever electric van plan in China

4 Oct 2017

The U.S. carmaker is changing course in China, insiders told Reuters, as sales slow. New state policies open an opportunity for Ford to build electric commercial vehicles. That could help meet quotas - and electrify Ford SUVs. Much depends on the partner, and battery supply.