Member Briefing November 20, 2024
Manufacturers to Trump: Slash Regulations First
An ‘unscientific’ IndustryWeek poll of readers last week listed eight priorities from the Trump campaign’s list of priorities and asked readers to choose their No. 1 priority for the new administration. Business leaders, especially those in manufacturing, have long complained about the regulatory state’s rules that hinder production, and reducing regulations was the most popular response on the survey. Closing the border, lowering corporate taxes and imposing tariffs on incoming goods were the other policies to hit double digits.
More interesting were the poorer performers. Manufacturers were more interested in general regulations than a new round of higher trade charges on goods imported from China. President Joe Biden left in place most of the tariffs on China that Trump enacted in his first term. On the campaign trail throughout the past two years, Trump has promised as much as 60% tariffs on Chinese goods. Nearly 10% of survey takers called that a No. 1 priority, almost exactly half as many as who said regulation cuts should come first.
US Housing Starts Decline 3.1% In October, Building Permits Fall 0.6%
U.S. single-family homebuilding tumbled in October likely as Hurricanes Helene and Milton depressed activity in the South while permits rose slightly, indicating that an anticipated rebound probably would be muted by higher mortgage rates. The report from the Commerce Department on Tuesday suggested that residential investment, which includes homebuilding, remained subdued at the start of the fourth quarter after contracting in the last two quarters. The housing market has been battered by higher borrowing costs as the Federal Reserve tightened monetary policy to combat inflation.
Single-family housing starts, which account for the bulk of homebuilding, plunged 6.9% to a seasonally adjusted annual rate of 970,000 units last month, the Commerce Department's Census Bureau said. Data for September was revised higher to show homebuilding rising to a rate of 1.042 million units from the previously reported pace of 1.027 million units. Starts for multi-family housing jumped 9.8% to a pace of 326,000 units. Overall housing starts dropped 3.1% to a rate of 1.311 million units. Permits for future construction of single-family housing gained 0.5% to a rate of 968,000 units, the highest level since April.
The Council of Industry Mournes the Passing of Christopher Capone, Former President and CEO of Central Hudson
Christopher M. “Chris” Capone, 62, of the Town of Clinton passed away on November 14, 2024, at Mid-Hudson Regional Hospital, Poughkeepsie. Capone worked with Central Hudson for some 2 ½ decades and in early 2023, he agreed to delay his planned retirement to assume the role of CEO with a focus on further stabilizing the company’s billing system. This task he took on with grace and humility which went a long way toward rebuilding customer and community trust.
He has served on boards and committees for various community organizations including the United Way, Mid-Hudson Workshop for the Disabled, Children’s Home of Poughkeepsie, and was on the grants Committee at the Community Foundations of the Hudson Valley. Capone was serving as a member of the Advisory Board of the Food Bank of the Hudson Valley and a member of the Marist School of Management Advisory Board at the time of his passing.
Global Headlines
Middle East
- Israel Finds Large Troves Of Russian Arms In Hezbollah’s Hands - WSJ
- Iran Increased Uranium Enriched Stockpile to Near Weapons-Grade Levels: UN - Newsweek
- Lebanon, Hezbollah Accept US Ceasefire Proposal As Israeli Strike In Beirut Kills 5 – USA Today
- US Removes Remaining Aircraft Carrier From Iran's Doorstep - Newsweek
- Netanyahu, In Gaza, Says Hamas Will No Longer Rule Enclave - Reuters
- Hezbollah Launches Attack Drones At Tel Aviv Military Targets – France 24
- Almost 100 Gaza Food Aid Lorries Violently Looted, UN Agency Says - BBC
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Putin Approves Changes To Russia's Nuclear Doctrine
- Zelensky Says 2025 Will Decide Who Wins Ukraine War – France 24
- Long-Range Missiles Are in Play for Ukraine—but Are They Too Late? - WSJ
- Drone Catches Epic Battle of Ukrainian Tanks Against Russian Forces - Newsweek
- European Nations Denounce Russian Hybrid Attacks, Cable Cut Probes Launched - Reuters
- Ukraine Uses U.S.-Provided Long-Range Missiles in Russia for First Time - WSJ
- Interactive Map: Assessed Control Of Terrain In Ukraine – Institute For The Study Of War
- Map – Tracking Russia’s Invasion Of Ukraine – Live Universal Awareness Map
Other Headlines
- Germany On Mysterious Broken Cables In Baltic Sea: ‘It Is Sabotage’ - Politico
- The ECB Prepares for Trump Tariffs - WSJ
- Turkish Strikes In Syria Cut Water To One Million People - BBC
- Hong Kong Court Sentences Dozens in Case That Crushed Pro-Democracy Camp - WSJ
- Russia Vetoes UN Resolution Calling For Immediate Cease-Fire In The War Between Sudan's Rival Forces – France 24
- North Korea's State Media Warns US-Led 'Nuclear Alliance' on Doorstep – Newsweek
- Scholz: G20 Not Clear Enough On Russian, Middle East Conflicts - Reuters
Policy and Politics
White House invests $285M in first CHIPS Manufacturing USA Institute
The Department of Commerce is investing $285 million in the technology consortium Semiconductor Research Corp. to create the first CHIPS Manufacturing USA institute in Durham, North Carolina, according to an announcement on Tuesday. The institute is part of a $1 billion funding initiative to advance semiconductor research and manufacturing in areas including design, advanced packaging, assembly and testing processes. The institute will partner with companies, startups, researchers and academia to achieve its goals.
Dubbed SMART USA — Semiconductor Manufacturing and Advanced Research with Twins — the institute will use digital twin technology to enhance semiconductor design and manufacturing, while also integrating artificial intelligence for improved efficiency and lower production costs. It will also join 17 Manufacturing USA institutes aimed at improving the country’s technological edge and research and development infrastructure. Each has a unique technological concentration, including phototonics or advanced robotics. Manufacturing USA is operated by the interagency Advanced Manufacturing National Program Office, which is headquartered within the National Institute of Standards and Technology.
Read more at Manufacturing Dive
Report: U.S. Could Get More Power from Nuclear Plants
The U.S. could get the equivalent power generation of nine more nuclear reactors out of its existing nuclear fleet, according to a new report (POLITICO Pro, subscription). An analysis by the Electric Power Research Institute released late last week lays out three strategies for expanding the capacity of the existing fleet: restarting old power plants, increasing the power generation from existing plants and extending licenses for nuclear plants. According to the report adding more nuclear power to stabilize a national electric grid strained by increased electrification and use of artificial intelligence has become “a stronger bipartisan priority” in Congress.
Three of the nation’s 54 nuclear plants are eligible for restarts: The Palisades nuclear plant in Michigan, the former Three Mile Island plant in Pennsylvania, newly dubbed the Crane Clean Energy Center, and the Duane Arnold plant in Iowa. In September, Microsoft agreed to purchase power from a partly reopened Three Mile Island, scheduled for a 2028 restart by Constellation Energy. That same month, the Biden administration finalized a $1.52 billion loan guarantee to reopen the Palisades plant, which has been closed since 2022. Getting these plants back online could give the U.S. 2.4 gigawatts of power, according to the EPRI report, while uprates—increasing existing plants’ capacity—could boost nuclear power generation by as much as 8 gigawatts.
New York Power Authority Seeks Public Comment On Draft Renewables Plan
The New York Power Authority is seeking public comment on a draft plan of their role in expanding the state’s renewable energy portfolio. It is part of the state’s work to meet ambitious climate goals and the expansion of NYPA’s authority was approved in last year’s state budget. The expansion gives NYPA, the largest state public power organization in the nation, the authority to plan and execute renewable projects. The plan also provides analysis of labor needs and potential partnership.
The draft plan identifies 40 projects. The projects include 32 solar and one wind, with the remaining projects comprising of battery storage facilities for a cumulative 3.5 GW of renewable growth. Keith Schue of New York Energy and Climate Advocates said he is concerned about the continued focus on solar, and to a lesser extent wind, pointing to recent comments from Gov. Kathy Hochul and NYSERDA about the possibility that some goals are in danger. “We think NYPA is great, however, we are concerned about this plan.” he said. “If we’re going to meet our goals, were going to need a diversity of sources wind and solar can be part of it, but we’re going to need nuclear too, if we have additional wind and solar, we should have additional nuclear.”
Read more at NY State of Politics
Health and Wellness
Sitting Too Much Is A Danger Not Even Exercise Can Undo. Here Are 5 Tips To Move More
A team of researchers in the Mass General Brigham health care system showed that an excessively sedentary lifestyle—spending most of your waking hours sitting, reclining, or lying down—corresponds to an increased risk of heart disease, namely heart failure and death. However, the meeting of exercise guidelines alone may not lessen those odds. Their findings were published Nov. 15 in the Journal of the American College of Cardiology. Researchers assessed participants’ health a median eight years after their physical activity had been recorded, focusing on those who had developed heart conditions:
Sedentary behavior correlated to an increased risk of all of the above ailments. What’s more, people in the most inactive group, who recorded more than 10.6 sedentary hours a day, had a 40% to 60% greater risk of heart failure and cardiovascular death than those in the 8.2- to 9.4-hour group.
You don’t have to join a gym or stand up all day to live a less sedentary lifestyle. The American Heart Association recommends these tips for weaving more movement into your day.
Transition 2024
- Pennsylvania Recount Update—Shapiro Sides with GOP Against Faulty Ballots - Newsweek
- Trump Picks Cantor Fitzgerald CEO Howard Lutnick As Commerce Secretary - CNBC
- House Democrats Keep Jeffries, Top Leadership Team In Place – The Hill
- Trump heads to Musk's SpaceX launch - Reuters
- Trump And Xi Jinping’s ‘Loving’ Relationship Has Soured - Can They Rebuild It? - BBC
- What Sean Duffy Will Need To Address As Transportation Secretary - Newsweek
- GOP Senators Deride Idea Of Replacing FBI Background Checks For Trump Nominees – The Hill
- Tracking Trump’s Cabinet Picks – Politico
Industry News
Eurozone Industry Falters Again
Eurozone industrial output fell in September, underlining the fragility of the currency area’s economic recovery as exporters brace themselves for the possibility of higher U.S. tariffs. Total output decreased 2% across the 20 nations that share the euro European Union data showed Thursday. Sliding 0.4% over the quarter as a whole, output marked a fresh downturn in an industrial. Compared with January 2022 production has fallen 6%.
September’s sharpest fall came in production of capital goods—those used to produce other goods—, which are particularly susceptible to high interest rates. The European Central Bank has begun lowering borrowing rates in a bid to ease the burden on investment in such goods, but bank policymakers have stressed that caution is still needed against the risk of a resurgence in inflation. Many of Europe’s industrial export sectors are struggling in the face of weak demand, including chemicals and chip makers, and several car makers and suppliers have begun planning reduced operations and layoffs.
Stellantis Factory Layoffs This Fall Near 4,000
Stellantis NV has either cut — or made plans to cut — more than 3,750 full-time factory workers across the Detroit and Toledo metro areas since September. That’s a conservative estimate of the transatlantic automaker’s recent indefinite layoffs, as The Detroit News could not obtain updated figures for some plants, and Stellantis did not provide a total for its U.S. footprint. The tally doesn't include nearly 500 supplemental part-time workers at several Michigan plants who were terminated in late September. It doesn’t include parts companies that must scale back their headcount whenever Stellantis does. Some 370 jobs are expected to be cut at a pair of Toledo Jeep plant suppliers by early January, for example.
The number also doesn't include thousands of Stellantis employees who have been temporarily laid off at various times this fall, some for weeks at a time, as the company slashes production at several factories to reduce large vehicle inventories that piled up on dealer lots this year.
Stellantis Delays Ram Electric Pickup Trucks Until 2025
Stellantis is delaying the launch of its Ram electric pickup trucks from this year until the first half of 2025, as the trans-Atlantic automaker continues testing the vehicles. CEO Carlos Tavares on Tuesday declined to disclose details about what caused the delays or specific timing on the electric trucks, which include an all-electric “REV” model and an extended-range “Ramcharger” that’s equipped with an electric generator and a gas engine.
“We are just facing a very significant amount of workload, and we want to be very prudent in the way we validate the products, so we take our time, and we make sure that we manage the peak,” Tavares said during an online media event. “We don’t want to rush. ... It’s better to take a few weeks more to validate properly than to rush and then to make mistakes in terms of quality. That’s what we are doing now.” Tavares said work needs to be completed on the Dodge Charger Daytona and Jeep Wagoneer S EVs, which are expected to be released by the end of this year, before turning to the new trucks.
Sumitomo Rubber To Lay Off 1,380 Workers, Close New York Tire Plant
Automotive tire maker Sumitomo Rubber USA is closing its manufacturing plant in Tonawanda, New York, in February 2025, laying off 1,380 workers, according to a Worker Adjustment and Retraining Notification Act letter to the state. The first two rounds of job cuts included 1,245 employees and occurred on Nov. 11 and Nov. 15, according to the WARN letter. The remaining 135 workers will lose their jobs when the plant closes on Feb. 14.
Parent company Sumitomo Rubber Industries is also dissolving the U.S. subsidiary, citing that tire sales at the Tonawanda facility were not profitable, according to an investor release. Of the 1,380 workers, 1,200 were members of the United Steelworkers Local 135, according to the labor union’s press release. Sumitomo Rubber USA is working with USW representatives on bargaining severance packages, according to the company’s press release.
Read more at Manufacturing Dive
Company Earnings of Note
Lowe's Earnings Beat Expectations on Tuesday, as outdoor do-it-yourself projects, the home professional business and stronger online shopping fueled sales.Yet even with the better-than-expected results, the home improvement retailer is projecting a year-over-year sales decline. The company updated its full-year guidance on Tuesday, and now expects total sales of between $83 billion and $83.5 billion, higher than its previous forecast for $82.7 billion to $83.2 billion. It said it expects comparable sales to decline 3% to 3.5%, slightly better than the 3.5% to 4% drop that it had previously anticipated.
Walmart increased sales more than 5% during late summer and early fall as upper-income households shopped more at the world's largest retailer and were more likely to pay for quick deliveries. The company also raised its sales and forecast for the fiscal year annual sales, a positive sign for Walmart with the arrival of the holiday shopping season. Consolidated revenue during the company's third quarter (Aug.-Oct. 2024) totaled $169.6 billion, up 5.5% over the same three-month period a year ago. Walmart sales in the U.S. rose 5.3%, higher than the 3.73% that analysts were expecting, according to Bloomberg. Sales at Sam's Club locations across the U.S. were up 7% over a year ago, the company said.
The Double Threat Of New Trump Tariffs, Wave Of Port Strikes Is Coming For The Supply Chain In Early 2025
Uncertainty among U.S. shippers is escalating into 2025 with the expectation of new Trump tariffs and the possibility of a new ports strike that could begin in mid-January. Supply chain and logistics executives tell CNBC that shippers are now trying to game out the snafus that could be coming in the global supply chain and how much inventory to order against a consumer backdrop that remains strong, but subject to macroeconomic risks, and an early start to Lunar New Year, a holiday period in Asia during which manufacturing operations halt for as long as a month.
The earliest new tariffs could be in effect is in late February or early March, according to an alert from C.H. Robinson to clients. “With continued port labor uncertainty and the potential for increased tariffs in Q1, shippers should anticipate a strategic pull-forward of inventory out of Asia, which would impact both international and certain domestic freight markets (e.g., Southern California),” it wrote. But shippers must now decide which coast to send freight to given exposure to a possible ILA strike at ports from New England to Texas which could begin in mid-January. Travel time for ocean freight from China to the East Coast and Gulf Coast ports is 40-55 days. The negotiation deadline between the United States Maritime Alliance and the ILA is January 15.
Spirit Aero Raises More Cash with Asset Sale
Troubled aerostructures manufacturer Spirit AeroSystems has a purchase agreement to sell its Fiber Materials Inc. subsidiary to Tex-Tech Industries for $165 million. This is the latest step by Spirit to accrue cash, to continue operating as it prepares to be acquired by Boeing, a deal on track to close in 2025. In its recent 3Q earnings statement Spirit warned that its cash reserves are shrinking, and its survivability is in jeopardy. The company is a primary supplier to Boeing, Airbus, and other aircraft builders, but it has been severely impacted by ongoing quality and supply issues.
The essential nature of Spirit to Boeing’s commercial aircraft programs prompted the latter to structure a $4-billion takeover of its supplier. The new capital will add to the $350 million that Spirit is due to receive from Boeing in an arrangement announced this month, which follows an estimated $565 million in capital that Boeing has extended to Spirit AeroSystems over the past year to keep its own manufacturing program on track. Spirit also negotiated a $107-million line of credit with Airbus.
Read more at American Machinist
Strikes and Storms Disrupt State Labor Markets in October
Labor markets weakened across the nation in October. Twenty-nine states shed payrolls, the highest count since the pandemic recession save for July 2023. Labor strikes and recent hurricanes played a significant role in depressing employment growth, as evidenced by a sharp decline in Washington and Florida payrolls. That noted, the pace of hiring was moderating across states even before those one-off events, and higher rates of unemployment serve as a reminder that many state labor markets are losing momentum.
Several states in the hurricane-impacted Southeast saw payrolls drop notably. Florida, the state where hurricanes Helene and Milton made landfall, registered the sharpest overall contraction with 38K payroll losses on net. Similarly, North and South Carolina lost 5.5K and 3.5K payrolls, respectively. Meanwhile, payrolls in Washington declined by 35.9K, the largest monthly fall since the throes of the pandemic. The sharp pullback likely reflects the labor strike at Boeing, which has a significant employment base in the state. Elsewhere, hiring fell by 10.9K in New York and 10.6K in Texas.
Here's The $12.5 Million Tiffany Glass Window That Just Shattered Auction Records
The Danner Memorial Window, a 16-foot-high leaded window previously owned by billionaire Alan Gerry, sold in a Sotheby's auction Monday night to an anonymous buyer. It shattered the previous auction record for a Tiffany Studios piece of $3.37 million (a Pond Lily Lamp sold for that price at Christie's in 2018). It marks the second time the Danner window broke a Tiffany Studios record—it sold for $2 million in 2000 and was, at the time, the most expensive piece ever from the creator.
The window, which depicts blooming trees and a rolling river in vibrant colors, was made by Louis Comfort Tiffany and designer Agnes Northrop in 1913 as a tribute to John and Terressa Danner, founding members of the First Baptist Church in Canton, Ohio. The piece was called the "most significant and valuable Tiffany Studios work ever offered at auction” by Sotheby’s and was sold from the personal collection of Gerry, who founded and sold Cablevision Industries to Time Warner for almost $3 billion in the late 1990s. The work was expected to sell for between $5 million and $7 million.