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Trade Wars
Toyota To Build Tacoma Pickups In Texas, Not Mexico
Toyota Motor on Monday announced that it is investing $3.6 billion to move production of the Tacoma midsize pickup truck from a plant in Mexico to its San Antonio, Texas, manufacturing campus. The investment is expected to create 2,000 U.S. jobs at the facility, add a second vehicle assembly line and roughly double the size of the 2.7-million-square-foot plant by 2030, the automaker said. It will expand the plant’s annual capacity from roughly 200,000 to 350,000 units, Toyota said. The Texas plant currently produces the Toyota Tundra full-size pickup truck, including a hybrid variant, and the Toyota Sequoia SUV hybrid.
The announcement is part of Toyota’s stated plans to invest up to $10 billion more than previously expected domestically in the U.S. through 2030. It comes less than a week after the Trump administration confirmed it would not extend its trilateral trade pact with Canada and Mexico, instead opting to conduct annual reviews. “This investment expands Toyota’s manufacturing capacity and complements our broader North American production network,” A Toyota spokeswoman said in an email to CNBC.
Read more at CNBC
Samsung Posts 1,800% Jump In Profit, But AI Spending Concerns Spook Investors
Samsung Electronics shares fell as concerns about spending and demand overshadowed record second-quarter earnings. The company reported preliminary second-quarter operating profit of 89.4 trillion won ($58.4 billion), versus 57.2 trillion won in the prior period. On a year-on-year basis, operating profit for the quarter is expected to jump more than 1,800%. Revenue for the April-to-June period was 171 trillion won, up from 133.9 trillion won in the previous quarter. Compared to the same period a year earlier, sales more than doubled.
The results include deducted one-off expenses for employee bonus provisions. Earlier this year, Samsung agreed to scrap its 1,000% base salary bonus cap and earmark 10.5% of its operating profit for bonuses, capitulating to a weeks-long labor union protest that demanded a fair share of the company’s earnings. Samsung’s latest pledge to build massive semiconductor fabrication plants in the southern part of the country is also dragging down shares, Tom Kang, research director at Counterpoint Technology Market Research said. He noted that the location is far from the central part of Korea where traditional fabrication plants are concentrated, and since it is “new ground,” Samsung will have to start from zero to build the infrastructure, a layout that deviates from investor expectations.
Read more at CNBC
Big Tech Has Suddenly Flipped on the AI Jobs Wipeout Scenario
A year ago, the message from many business leaders was that AI was going to wipe out jobs. For the past month or so, tech CEOs have been striking a more optimistic tone. In late May, OpenAI Chief Executive Sam Altman—who has long predicted that AI will lead to seismic shifts in the workforce—said during a conference, “We’ve been roughly right on technological predictions and pretty wrong on the social and economic implications.” Soon after, he told CNBC, “Our industry underestimated how much we’re going to be able to keep people at the center of everything.” Is the sunnier outlook a move to win back customers and the public who are souring on AI’s world-upending promise? Or is the role of AI in the workplace now just better understood?
Collectively, the narrative has shifted from worker-light doomsday scenarios caused by AI to a future in which workers keep their jobs—and get a productivity boost. The sentiment change isn’t limited to tech leaders: A survey by EY-Parthenon found that the percentage of CEOs who believe AI investments will result in significant reductions in head count fell from around 46% in January 2025 to 20% this May. Another recent study by financial-technology company Ramp and workforce-intelligence firm Revelio Labs found that companies making the largest AI investments grew employment by roughly 10% more than otherwise similar companies that hadn’t yet adopted AI.
Read more at the WSJ
Airbus Wins Another Widebody Order
Scandinavian airline SAS placed a firm order with Airbus for 18 A330neo aircraft as part of an ongoing fleet modernization effort. The order includes further options for as many as 22 more of the same model aircraft, and although neither Airbus nor SAS offered details on the value of the basic order it could be worth as much as $5.7 billion based on list prices for the A330neo. The contract also initiates a parallel order with Rolls-Royce for 40 Trent 7000 high-bypass turbofan engines, the exclusive powerplant for that Airbus series.
SAS, like numerous commercial carriers, has started a multi-billion dollar modernization program to update its long-range aircraft fleet (the focus for the current order), expand its regional service network, and modernize its narrow-body fleet. The A330neo is a widebody, twin-engine aircraft introduced in 2018 as a revision to the previous A330, to achieve more fuel-efficiency thanks to the Trent 7000 engines and other aerodynamic improvements, as well as more passenger amenities for long-haul routes. The A330-900 model that SAS has selected has a range of 7,350 nautical miles (13,610 km / 8,460 miles) and seating capacity for 287 passengers.
Read more at American Machinist
Boeing's New 737 Assembly Line Starts Moving In Everett
Boeing began operating a fourth 737 MAX assembly line on Monday at its Everett, Washington, factory. The new line, known inside Boeing as the North Line, is part of the U.S. planemaker's long-term plans to significantly increase output of its popular single-aisle jetliner to keep up with historically high global demand for jets. Boeing CEO Kelly Ortberg said described the line as a copy of the three 737 final assembly lines in Boeing's Renton plant, south of Seattle. The Everett plant is the world's largest building by volume. It once housed production lines for the 747, 767, 777 and 787, but it has considerable available factory space after the end of 747 production and the consolidation of 787 assembly in South Carolina.
The start comes as Boeing ramps 737 production from 42 to 47 jets a month after consulting with the Federal Aviation Administration. The North Line is not expected to contribute to any rate increases before early 2027, when Boeing aims to increase 737 output to 52 jets a month. The company is studying increasing the 737 production rate to as much as 70 jets per month. Boeing needs to increase 737 output to help regain its financial footing after years of production disruptions, safety crises and supplier strains.
Read more at Reuters
Microsoft Is Cutting More Than 4,000 Jobs, 3,000 in Xbox Division
Microsoft MSFT will cut some 3,200 jobs from its Xbox videogames division as it restructures the struggling business. The company will lay off 1,600 people this week and 1,250 more during the rest of the fiscal year that began this month, Xbox Chief Executive Asha Sharma said in a memo to staff Monday. In addition, Microsoft is selling or spinning off four game development studios and exploring strategic options for a fifth—moves that will take at least 350 additional people off its payroll. Those cuts represent about one-fifth of the division’s total head count.
The videogame industry has been pummeled by layoffs for the past couple of years after many companies, including Microsoft, expanded aggressively in response to a surge of business during the pandemic. That boom halted when the world reopened. Microsoft bought game production companies including Activision Blizzard to beef up the offerings on Game Pass, its Netflix-style subscription service. The company had projected Game Pass subscriptions would reach around 77 million this year, according to a document revealed during legal proceedings related to the Activision acquisition. It currently has about 30 million.
Read more at the WSJ
Aluminum Giant Alcoa To Buy South32’s Assets In Deal Valued At $5.6B
Alcoa Corp. will acquire mining and metals assets from South32, expanding its operational footprint in Australia and Brazil while establishing a presence in South Africa for the first time, the Pittsburgh-based company said June 30. As part of the agreement, Alcoa will purchase Perth, Australia-based South32’s interests in bauxite mine, alumina refinery and aluminum smelter operations for $3.1 billion in upfront cash and 17 million Alcoa shares valued at $1 billion.
The deal also includes roughly $750 million in assumed net debt and lease liabilities and up to $750 million in contingent cash consideration payable through 2030, based on aluminum and alumina price performance, according to global research firm Wood Mackenzie. The deal is expected to close in the first half of 2027. South32 has been repositioning toward copper and critical minerals in recent years. It sold its coal assets in 2024 and Cerro Matoso ferronickel mine in Colombia in December. Meanwhile, the company has been advancing its $2.16 billion Hermosa development in southern Arizona, expected to be the only U.S. mining project capable of producing zinc and manganese.
Read more at Manufacturing Dive
Lockheed Martin To Buy Naval Defense Firm Ultra Maritime For $3.45 Billion
Defense heavyweight Lockheed Martin said Monday it will buy naval defense group Ultra Maritime for $3.45 billion. CNBC reported earlier in the day that Lockheed Martin was leading the race to buy Ultra for roughly $3.5 billion, and that Guggenheim and JPMorgan were advising on the sell side. “By joining forces with Ultra Maritime, we’re accelerating our commitment to deliver the most advanced undersea and anti-submarine warfare capabilities to our U.S. and allied partners across the globe,” said Stephanie C. Hill, president of Lockheed Martin Rotary and Mission Systems.
Ultra is owned by private equity firm Advent International, and specializes in anti-submarine technology. The company makes radar and electronic warfare systems, as well as torpedo defense countermeasures. After the deal closes, Ultra’s team will become part of Lockheed Martin’s Rotary and Mission Systems business area. Lockheed Martin is one of the world’s largest defense firms, producing planes such as the F-35 Lightning II fighter jet and munitions like the Patriot air defense missile.
Read more at CNBC
Big Tech Data Centers Are Driving Up Power Bills At America's Rust Belt Factories
Belden Brick is among many manufacturers across America’s heartland where costs are rising as power-hungry data centers serving the artificial intelligence industry proliferate. The 141-year-old brick manufacturer, whose products can be found in iconic buildings including the Texas Alamo and Notre Dame University, is seeing power bills rise mainly from a monthly capacity charge, which recently jumped from $1,600 a month to $12,000. Factory electricity bills, a core expense, are rising faster than for many homes and other businesses, according to a Reuters review of U.S. energy data and interviews with nearly a dozen manufacturers and industry advocates.
Capacity charges are designed to compensate power generators for ensuring the grid has enough electricity for peak usage and to spur development of new supply. They generally account for about 10% of residential bills but can represent up to three times that for manufacturers, according to interviews with manufacturers, attorneys and energy experts. Such fees have soared in the 13-state region covered by grid operator PJM Interconnection due to stagnant supply and demand from data centers, where one server warehouse can use as much electricity as a mid-sized town. "That capacity charge just jumped off the page," said company president Brad Belden, part of the fifth generation working at the company.
Read more at Reuters
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