Manufacturing

Capital Calls: Adobe’s lose-lose Figma bind

24 Feb 2023

Concise views on global finance: Shareholders in the $160 bln design technology firm seem to have decided that the only thing worse than doing its blockbuster deal for rival Figma is losing it.

Rolls-Royce strategy bind is a problem best shared

23 Feb 2023

Shares in the $13 bln UK engineer surged as it moved on from pandemic losses. Yet it still needs to spend big on new tech to get ready for the energy transition. Given the costs outweigh its scope to do so, Rolls ought to share them via partnerships with big aircraft makers.

Stellantis has well-padded airbag for car crunch

22 Feb 2023

The Jeep maker’s operating income hit record levels in 2022, but it faces weaker demand from punters and rising competition. Still, CEO Carlos Tavares’s cost cutting and low exposure to China give cause for positivity. Those pluses aren’t reflected in the Stellantis share price.

Kyocera chief’s China swipe is half-convincing

22 Feb 2023

Hideo Tanimoto, who leads the $19 bln Japanese chip supplier, said the country is not a “viable” export manufacturing base. That’s hyperbole, but a winnowing of foreign firms in China is likely. Politics is a factor, but financial and competitive realities are more important.

Capital Calls: Schneider’s sustainable CEO

16 Feb 2023

Concise views on global finance: Jean-Pascal Tricoire’s departure as chief executive of the French industrial software group after nearly two decades at the helm defies the trend of short-lived or underperforming corporate bosses.

America isn’t quitting gas guzzlers yet

3 Feb 2023

Despite tit-for-tat discounts in the electric market, GM and Ford wrung $6 bln of operating profit by increasing prices overall this quarter – and they don’t expect to give it up. It’s an indicator that, even after a banner year for EVs, the U.S. may be slow to give up trucks.

Europe’s autos have weak defences against China

1 Feb 2023

Carmakers like Stellantis and Volkswagen are facing greater competition on their home turf from Chinese rivals. Higher tariffs or government subsidies might soothe the pain, but could also prompt a backlash in the Middle Kingdom. And Europe may even welcome the competition.

Capital Calls: Data falsehoods

26 Jan 2023

Concise views on global finance: Better-than-expected U.S. GDP and durable goods data suggest the country might be spared from a recession. But exclude Boeing sales and corporate stockpiling, and the economic outlook is less rosy.

Rough chip waters give ASML little room for error

25 Jan 2023

The Dutch giant expects sales to grow by a chunky 25% in 2023. Clients’ fear of missing out on an economic rebound is propping up demand for its equipment. Yet rising costs and the risk of a widening export ban to China may take the shine off the $264 bln group’s rich valuation.

German economic engine is due an overhaul

23 Jan 2023

Slowing global trade hit the country’s exports while higher energy prices boosted imports. The current account surplus shrank last year to 4% of GDP, its lowest level since 2003. As globalisation recedes, Berlin has to reassess the old export-led economic model.

Orsted increasingly merits its investor blowback

20 Jan 2023

The $38 bln Danish wind farm group flagged lower-than-expected 2023 targets as its key offshore arm struggled. Shareholders always granted Orsted a premium valuation, due to growth expected from new projects. Construction delays and rising rates are putting that in question.

Capital Calls: British jolt

17 Jan 2023

Concise views on global finance: The collapse of UK battery group Britishvolt leaves a gaping hole in the country’s auto manufacturing sector.

Cheaper gas is temporary salve for Europe Inc

9 Jan 2023

Warm winter days and enough reserves to offset Russian imports have halved the fuel’s cost. Yet Europe’s energy security also hinges on abundant liquefied natural gas purchases. As China’s fuel-guzzling economy reopens post-Covid, industrial giants like BASF may still suffer.

Automakers won’t go back to normal

4 Jan 2023

Covid-era shortages weren’t all bad for the industry. Prices soared amid tight supply, adding $7 bln to profits at GM alone. Car companies are trying to manage inventory so that supply and demand – now falling – will match up. They only have so much in their control.

Foxconn reinvents itself, and EV supply chains

3 Jan 2023

The Taiwanese giant plans to make electric vehicles, and the chips and batteries that go into them, for global automakers. That’s a twist on its business of churning out iPhones for Apple in China. As far as strategic pivots go, this one is ambitious and much needed.

Bowling Green, Kentucky is the next big U.S. city

22 Dec 2022

So is Syracuse, N.Y.; and Dayton, Ohio; and Normal, Ill. That’s where manufacturing of semiconductors and electric cars is going, thanks in part to existing old infrastructure and new policies under Joe Biden. It means less profit – but a more evenly distributed U.S. workforce.

Vietnam’s Elon Musk challenger turns heads in 2023

21 Dec 2022

Le Thi Thu Thuy is steering VinFast onto Western roads to race the entrepreneur’s premium marque, Tesla. She’ll have to convince investors in its New York IPO to look past niggles at its powerful parent. It’s a complex route, and puts the former Lehman banker in the spotlight.

Quiet quitting China will start with the Chinese

21 Dec 2022

Western companies have had a hard time dealing with Beijing’s zero-Covid policy, rising labour costs and U.S. tariffs. But uprooting and finding suppliers elsewhere is tough. Local partners could help by building factories elsewhere, like Tesla’s suppliers are doing in Mexico.

Apple finds a happy home in India

20 Dec 2022

IPhone makers Foxconn, Pegatron and Wistron are ramping up factories: $30 bln of official handouts help to make India an attractive place to set up. Trade tensions between Beijing and Washington only speed up a shift that will place India at the core of Apple’s supply chain.

Chip dilemma will buy Beijing precious time

19 Dec 2022

America is pushing Asian and European allies to stifle semiconductor progress in China. But antagonising the $466 bln market will be costly for South Korea's Samsung and Dutch ASML as global demand slows. Their hesitancy to fully embrace the blockade will benefit Beijing.