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Trade Wars
Honda Says It May Not Build New Plant In North America Without Trade Deal Extension
A senior Honda executive said the Japanese automaker might not build an eighth assembly plant in North America unless a key trade deal is extended. The Trump administration is currently negotiating with Canada and Mexico over the fate of the free trade deal known as USMCA. Honda Executive Vice President Noriya Kaihara told reporters at a roundtable in Washington the automaker is close to full production capacity in North America and needs a new factory. Last year, Honda said it was shifting production of its U.S.-bound five-door Civic hybrid model from Japan to Indiana.
However, "if there is no USMCA agreement in the future, we may have to change our direction," Kaihara said, adding the company will need to make a decision within a year or two and would like the plant to be running by around 2030. He said currently Honda is not passing on the costs of tariffs to buyers in North America. The U.S. imposed 50% tariffs on $20 billion of Canadian products on Saturday, and Canada said it was retaliating effective September 8.
Read more at Reuters
Why Are Auto Loans Surging At The Low End Of Prime?
For the last two consecutive quarters, there’s been a big increase in auto loan and lease originations in the risk tier just above subprime, compared to a year ago. Specifically, this surge has been happening in the credit score range from 620 to 659, according the latest data from the New York Federal Reserve. And so far it’s had only a minor effect on the market as a whole. According to interviews, likely scenarios might include:
It’s a more competitive market. Lower margins mean OEMs and auto lenders are recovering their appetite for bigger sales volume — even if bigger volume requires taking on a moderate increase in risk.
It’s also possible the 620-to-659 population may have increased, reflecting the “K-shaped economy,” divided between super-prime haves, and relative have-nots, including some borrowers who dropped out of higher tiers.
Relatively new captive finance companies owned by big dealer groups, and finance arms for used-car outlets like CarMax, could be contributing to the increase in low-prime loans. Auto lender Ally Financial has reported it is taking on more loans just above and below the cutoff for subprime.
Read more at Wards Auto
Volkswagen CEO Tells Factory Staff Cost-Cutting Journey 'Is Not Over'
Volkswagen CEO Oliver Blume urged workers at the German automaker's Emden plant, which could face closure under a sweeping turnaround plan, to step up savings efforts, warning that costs were still too high when compared with rivals. "This journey is not over. Because we not only measure ourselves against our own past performance. We measure ourselves against the best locations in Europe," Blume told staff, according to excerpts of his speech shared by the company on Wednesday.
"Labor costs today are more than double those of comparable European locations. And when it comes to factory costs, other plants are still significantly cheaper. This is not a criticism — it is the reality against which we must measure ourselves," Blume said. Emden, an electric vehicle plant in Volkswagen's home state of Lower Saxony, is one of four factories that currently lacks a business plan beyond 2030. The CEO told workers that Volkswagen's responsibility would not end if it failed to secure the plant's future.
Read more at Reuters
Mitsubishi Confirms US-Bound, Nissan-Based Pickup
Mitsubishi Motors North America announced an updated version of its Momentum 2030 plan on Tuesday and said it “intends to re-enter the pickup truck segment in North America through its collaboration with Nissan, further expanding the brand’s reach and relevance in the U.S. market.” For North America, “an expanded focus on adventure-oriented and off-road capable vehicles” is central to the strategy, Mitsubishi underscored.
That includes a more rugged Outlander variant set to arrive early next year, although the automaker hasn’t yet confirmed whether a new version of the Pajero, an off-road-focused SUV known to this market as the Montero, will be U.S.-bound. “This is the most comprehensive growth plan we have ever undertaken in the region, built around delivering greater value to customers, creating new opportunities for our dealer partners, and strengthening the long-term future of the brand,” Mitsubishi Motors North America President and CEO Mark Chaffin said.
Read more at Ward’s Auto
Intel Report Shows Gap Between Robotics Expectations And Readiness
As manufacturers look to adopt and deploy robotics, many are moving faster than their operating models can support, according to a survey commissioned by Intel of 800 business and IT leaders, robotics specialists and government and healthcare officials around the world. Unclear ownership of a robotics strategy across the organization could be a contributing factor to the 26% preparedness gap in manufacturing. The study, conducted by Man Bites Dog and Coleman Parkes Research, also identified gaps related to workforce skills, safety, form factor and scaling of robotics.
- Seven in 10 senior manufacturing leaders expect their organization to have a fleet of robots in the next five years, but roughly four in 10 have a formal strategy to manage a mixed workforce of humans and robots.
- Today, robotics are at varying stages of deployment across manufacturing. Approximately 40% of survey participants have already integrated robotics into certain processes or functions, and 19% are establishing industry standards and setting the pace for the rest of the market, according to the report.
- Of the 800 survey participants, nearly a fourth of them came from the manufacturing sector. Others came from retail, healthcare, defense and smart cities.
- At the same time, 35% are pioneering robotics to gain a competitive edge across multiple processes or functions and 6% are exploring robotics and their use cases through pilots or proofs of concept.
Read at Manufacturing Dive
SpaceX Plans To Build The ‘Biggest Launch Site On Earth’ For $100 Billion In Louisiana
Elon Musk is continuing his push into the Southern U.S. with SpaceX, his aerospace and tech conglomerate, planning a $100 billion launch facility in Louisiana.In a joint statement, the Louisiana Economic Development office said on Tuesday that SpaceX will establish its Starbase in Vermilion Parish, Louisiana, at a former Exxon property to, “support thousands of launches annually.” Once built, Starbase, LA will serve as the main launch facility for Starship, SpaceX’s in-development rocket that’s the largest ever built and designed to be fully reusable.
SpaceX said, in a video posted to its website on Tuesday, that the search for a site to build launch pads and have access to ample fuel for its operations took about seven years. Musk said in the video that the company would bring “probably 10,000 really exciting jobs” to Louisiana with the spaceport. A fact sheet posted online by the state of Louisiana said SpaceX is expected to generate an estimated “3,000 direct new jobs over the next 10 years” in the state, and “8,100 indirect new jobs.”
Read more at CNBC
J.M. Smucker Lifts Outlook, Swings to Profit as Sales Climb
J.M. Smucker SJM raised its outlook for the year after logging higher-than-expected adjusted earnings and sales in the first quarter. The owner of Jif peanut butter and Folgers coffee said it now expects net sales to decline 1% to 2% in its fiscal 2027, compared with a prior forecast for net sales to decline 3% to 4%. Analysts polled by FactSet are looking for sales of $8.78 billion in the coming year, marking a 3% decrease from last year. The company previously said it expects sales to decline in the coming year as it leans away from price increases, looking instead to drive volume growth in key areas and improve profitability.
J.M. Smucker also raised its full-year adjusted earnings outlook to $10.50 to $11 a share, up from a prior forecast of $9.75 to $10.25 a share. Wall Street modeled adjusted earnings of $10.07 a share. Chief Executive Mark Smucker said the new outlooks are based on the company’s strong first-quarter performance and improving expectations for the remainder of the year.
Read more at the WSJ
GE Aerospace, Kratos Advance GEK800 Toward JASSM Second-Source Role
GE Aerospace and Kratos Defense & Security Solutions have received a U.S. military engine type designation for their GEK800 turbofan and an Engineering, Manufacturing and Development (EMD) contract from the U.S. Air Force to develop the engine as a second-source propulsion system for the Joint Air-to-Surface Standoff Missile (JASSM). The GEK800 has received the military designation F143-ZZ-100. The 800-pound-thrust turbofan is designed for long-range missiles and other uncrewed applications, including collaborative combat aircraft and uncrewed aerial vehicles, GE Aerospace and Kratos say.
The engine is part of a broader GE Aerospace and Kratos effort to develop small, affordable propulsion systems for cruise missiles and uncrewed aircraft. GE Aerospace says it is optimizing cost through a limited-life design approach and describes the GEK800 as a scalable architecture that can support an engine family ranging from roughly 800 to 3,000 pounds of thrust. The GEK800 is also informing development of the larger GEK1500, a 1,500-pound-thrust engine that GE Aerospace and Kratos are developing for applications including collaborative combat aircraft.
Read more at Military & Aerospace Electronics
Federal Judge Dismisses Environmental Lawsuit Over Alaska Offshore Oil Reopening
A federal judge for the District of Alaska dismissed a lawsuit brought by a coalition of environmental organizations challenging the reopening of Outer Continental Shelf zones to oil and gas exploration. The ruling, issued on a Monday by Chief Judge Sharon L. Gleason, did not address the merits of the case but rested on procedural grounds: the plaintiffs' failure to demonstrate imminent injury.
These zones had been withdrawn from future development by the previous administration before the Trump administration, upon taking office, launched a reorientation of offshore energy policy. The case unfolds as other producing nations adjust their own exploration strategies, as illustrated by Brazil, which detected oil traces off the Amazon coast, or by China, which recently unveiled its five-year oil and gas plan for 2026-2030.
Read more at EnergyNews
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