Manufacturing

Kyiv’s defence requires European supply-side shock

5 Mar 2024

Europe is not producing the 2 mln artillery shells Ukraine needs, and missile plants are idle. Meanwhile, its stockpiles are shrinking, threatening the region’s ability to defend itself. To crank up production lines, manufacturers will need a steady flow of government orders.

How to solve Europe’s defence riddle

5 Mar 2024

At 360 bln euros, the bloc’s military expenses are three times Russia’s. Yet fragmented defence systems are a problem, Bruegel senior fellow Guntram Wolff tells The Exchange podcast. To improve scale and boost aid for Ukraine, Europe should consider more joint debt.

Make in India can dial up Chinese characteristics

1 Mar 2024

India's $300 bln electronics dream is stuck on low-end work like assembling iPhones. To climb the manufacturing ladder, it can improve market access for its neighbour's firms in exchange for expertise. That will require officials to lower tariffs and open up to Chinese investment.

Capital Calls: BAE Systems

21 Feb 2024

Concise views on global finance: The $46 bln British defence company is forecasting slower year-on-year earnings growth in 2024 despite reporting record orders.

Capital Calls: Volkswagen in Xinjiang

15 Feb 2024

Concise views on global finance: The German carmaker is discussing its future in the troubled Chinese province with state-owned partner SAIC. A slowdown in the domestic auto market and the rise of exports could make the pair’s potential retreat from Xinjiang easier to bear.

Orsted revival requires more than belt-tightening

7 Feb 2024

The $23 bln Danish group cut its 2030 power capacity target and cancelled dividends after facing $4 bln of US impairments. For investors, it’s better than an equity raise. But an Orsted share-price recovery hinges on regaining their trust – and expected rate cuts materialising.

A pinch of salt could unsettle electric-car order

7 Feb 2024

Carmakers Stellantis and BYD are betting on sodium-based batteries. The cells’ bulk and need for more frequent charging mean they may struggle to drive lithium tech off the road. But affordability and the prospect of loosening China’s grip on the industry will spur adoption.

Korea’s battery giants engineer volatile US gains

2 Feb 2024

LGES and Samsung SDI have announced more than $18 bln of investments to build factories Stateside. Thanks to generous tax credits from Washington, those bets could pay off. But slowing EV growth and policy risk – amplified by US elections this year – will be an unstable mix.

ASML is underplaying its strengths

24 Jan 2024

The semiconductor giant kept its 2024 outlook reined in despite hefty quarterly earnings. US and Dutch export controls that affect chipmaking tools have begun to dip into China sales. But a hefty orders backlog and rising chip demand should help the $330 bln group fly higher.

CATL prepares to power up wildest electric dreams

5 Dec 2023

The world’s largest battery maker boasts $14 bln in net cash, making a possible Hong Kong listing seem unnecessary. But the extra funds would help CATL grow in Europe and could potentially fuel explosive expansion in Southeast Asia and the US too.

Foxconn is still running with difficult status quo

27 Nov 2023

Terry Gou’s exit from Taiwan’s presidential election race may shield the $45 bln firm he founded from immediate political crossfire from Beijing. However, the Apple supplier’s push to move production outside of China leaves it firmly on frontlines of rising cross-strait tensions.

Renault electric acceleration can swerve IPO

15 Nov 2023

The French carmaker is eyeing 25 bln euros of revenue in 2031 for its battery ride unit Ampere. Capturing the full value of that through an IPO may be tricky in the short term given a sluggish EV market. A listing would be a distraction, and Renault doesn’t really need the money.

Capital Calls: Goodyear, Target

15 Nov 2023

Concise views on global finance: By offloading assets, the 125-year-old tire maker is succumbing to a similar overhaul as many other iconic US industrial centenarians; the $60 bln retailer has finally taken aim at what it can control – keeping watch over inventory and costs.

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.

Foxconn’s China woes expose supply chain dilemma

24 Oct 2023

A tax probe is hitting the Apple supplier ahead of a key Taiwanese election in which founder Terry Gou is running for president. It may complicate the manufacturer’s plan to move production outside China. Other multinationals will learn from Foxconn the true cost of reshoring.

China’s graphite curbs send green warning shot

20 Oct 2023

Beijing is introducing export controls for a key EV battery material, following fresh US tech restrictions. With 90% of global processing capacity in the People’s Republic, the West will struggle to go it alone. Carmakers’ dependence on the People’s Republic is here to stay.

German auto ram-raid warrants careful driving

20 Oct 2023

Schaeffler is buying car-parts maker Vitesco, both controlled by the same family, for $4 bln. Minority shareholders can choose between a low price now or an uncertain future in a conglomerate. Schaeffler can probably get away with its smash and grab, but it might backfire later.

Capital Calls: Germany, Schaeffler

9 Oct 2023

Concise views on global finance: Chancellor Olaf Scholz’s resounding defeat in key local elections on Sunday sends a message to Brussels; the German group’s 3.6 bln euro acquisition of auto supplier Vitesco makes sense in an era of greater competition.