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Trade Wars
Refineries Are Now the Main Chokepoint for Global Energy Supplies. US and Other Nations Consider Export Ban.
Diesel prices are soaring—they eclipsed $6 a gallon in the U.S. for the first time this month and have kept climbing, hitting $6.45 on Friday. The surge has rattled governments and markets around the world that rely on diesel as the workhorse of their industry, transportation and agriculture. Shortages have appeared at gas stations in rural Brazil, in Libya and some African nations that can’t afford to import the fuel.
Persian Gulf states and Russia have invested tens of billions of dollars in refineries over the past decade to grab a bigger share of the global diesel market. Now, war in both regions has sent exports plunging, squeezing supplies of a fuel that powers much of the global economy. The Iran and Ukraine wars left the U.S. as the producer of last resort for diesel and other refined products, but momentum is now growing to ban exports of the fuel to lower prices ahead of the midterm elections. Rep. Tim Burchett (R., Tenn.) introduced a bill this past week to ban exports. Senate Majority Leader John Thune (R., S.D.), said he was open to the idea.
Read more at The WSJ
VW Slashes Profit Outlook After China Sales Slump and $6.9 Billion Writedown
Volkswagen AG slashed its outlook on Friday as it flagged €10 billion ($11.5 billion) in one-off items related to its stake in luxury sports car maker Porsche AG, provisions for job cuts and a weak Chinese market. The news raises questions over Volkswagen's Porsche brand, which has been hardest hit by U.S. tariffs and collapsing demand for foreign luxury brands in China, creating a perfect storm for the division that posted a profit margin of just 1.1% last year.
The profit warning deepens a crisis at Volkswagen, which earlier this month managed to agree far-reaching cuts with unions in the face of fierce competition from Asian rivals and stagnant demand in Europe. Volkswagen, which also includes the Audi, Skoda and Seat brands among others, now expects a profit margin of 1% at the most in 2026, having previously guided for 4% to 5.5%.
Read more at The Detroit News
IBM Passes Initial Hurdle In Securing IDA Financial Benefits For Poughkeepsie Quantum Computing Facility
The Dutchess County Industrial Development Agency Wednesday approved the preliminary resolution for IBM to secure a payment-in-lieu-of-taxes plan and sales tax exemption for the project on South Road. Company consultant Eric Stavriotis said this project would be what he called the first of the first. “Our view is there are centers of excellence nationally that have emerged around quantum, where the specialization and technology are coming together,” he said. “This project would really position the Mid-Hudson Valley, and Poughkeepsie specifically, as the center of gravity for manufacturing quantum computers in the US.”
If the incentives are approved, company officials said they could break ground in November. When operational, IBM, which currently has some 2,300 employees on the campus, could see another 200 to 300 more, with starting salaries ranging from $68,000 to $83,000 for technicians. The next step in the incentive process is for the IDA to conduct a public hearing, followed by a final vote of approval.
Read more at Mid-Hudson News
NIST Awards Over $30M To 12 Manufacturing Extension Partnership Sites
The National Institute of Standards and Technology has awarded over $30 million to 12 Manufacturing Extension Partnership centers in 11 states and Puerto Rico, the Commerce Department’s agency announced last week. The funds are part of a competition to support the MEP sites to help small- and medium-sized businesses accelerate adoption of advanced manufacturing technologies, including artificial intelligence, robotics, automation and additive manufacturing.
The 12 winners must secure nonfederal matching funds or cost share of at least 50%. Under federal law, the government cannot provide more than 50% of capital and yearly funds to support an MEP center. The agency called for the site awardees to develop metrics for technology adoption that will be shared across the MEP network. The winners will also actively engage with flagship manufacturers in “priority sectors” that each site has identified.
Read more, see the list of recipients at Manfuacturing Dive
Volvo Recruits a Top VW Executive to Steer Its Turnaround
Volvo Cars named Klaus Zellmer as its next chief executive, poaching one of Volkswagen Group’s top-performing brand chiefs to launch a raft of new vehicles and revive growth in a ferociously competitive market. Zellmer, the current CEO of VW’s Škoda, will succeed Håkan Samuelsson, a 75-year-old veteran of Volvo, no later than October 2027. Zellmer spent more than two decades at Porsche, now also part of the VW Group, culminating in a stint leading the sports-car brand’s North American business through a period of strong growth in the 2010s.
On Thursday, Samuelsson and his team unveiled a plan to double Volvo’s market share by introducing 13 new models, seven in Western markets and six in China, while saving costs by sharing more parts with Geely. Under Zellmer, Škoda has become a bright spot in the otherwise gloomy financial picture at VW. The Czech brand, bought in stages after the fall of the Berlin Wall, has grown to become Europe’s third-largest car business by offering VW technology at lower prices than the VW brand itself.
Read more at The WSJ
GM to Produce Patriot Missile Parts as U.S. Faces Critical Arms Shortage
General Motors has entered the missile business. The automaker is supplying parts for Lockheed Martin’s LMT -0.46%decrease; red down pointing triangle Patriot missiles, the defense contractor said Thursday—a potential lift to America’s munitions supplies depleted by the conflicts in Ukraine and the Middle East. Lockheed, which faces Pentagon demands to sharply boost munitions production, said GM delivered an initial batch of missile-housing components for PAC-3 MSE interceptors in August. Lockheed didn’t disclose details about the order size or scope of future work.
Pentagon officials are working to enlist other manufacturers, including automakers and their suppliers, to team with weapons makers to replenish military supplies. GM and Lockheed were in talks about the automaker producing munitions parts, The Wall Street Journal reported earlier this year.GM is working to expand its defense business, a small but growing unit. Chief Executive Mary Barra touted the division this summer in a call with analysts, saying she anticipated $700 million in defense revenue this year and double-digit margins. GM and other automakers are seeking new revenue streams in a tough global auto market. More so than its rivals, GM has been open to defense work.
Read at The WSJ
GE Launches $11.75B Vertical Integration Plan
GE Aerospace agreed to purchase investment casting group Consolidated Precision Products in a $11.75-billion transaction, a move that marks a significant integration of its manufacturing network for aerospace propulsion systems. The seller is a team of private-equity groups, Warburg Pincus and Berkshire Partners, which assembled the portfolio in stages over the past 15 years. Cleveland-based CPP manufactures highly engineered castings and sub-assemblies primarily for commercial aerospace and defense markets, producing not only investment cast parts but also sand castings, in aluminum, magnesium, superalloys, and steel.
Investment casting is a critical, multi-step process for manufacturing highly engineered, precision components in hard-to-machine alloys, is in high demand to support the long-term supply programs of commercial aircraft builders, as well as a rising volume of defense manufacturing programs, and rapid expansion of electrical and natural gas power systems. The process involves expertise in design and production, and the manufacturing technologies required represent a hurdle for expansion and new production capacity. GE Aerospace is active now as an investment casting producer for some components, including superalloy turbine blades, fuel nozzles, and structural castings, but it also relies on a network of external foundry partners.
Read more at Foundry Magazine
Huawei Unveils New Chip Technologies As Chinese Firm Steps Up The AI Race With Nvidia
Chinese technology giant Huawei launched new chip technologies in a challenge to global leaders such as Nvidia that highlights the narrowing gap between China and the U.S. in artificial intelligence. Huawei’s announcement Thursday at its annual key conference in Shanghai came just days before an expected meeting between U.S. President Donald Trump and Chinese President Xi Jinping in Washington on Sept. 24. China has rapidly pursued technological self-reliance, including in chips, as U.S.-led restrictions barred it from accessing some of the world’s most advanced AI chips and cutting-edge chipmaking machines.
Huawei introduced the Atlas 960 SuperPoD computing cluster at the event, a faster successor to the model it launched only months ago with improvements in AI training and “inference,” referring to the process when a trained AI makes predictions or decisions. Huawei also plans to launch the Ascend 970 and 980 chip series in 2028 and 2029, with expectations of significant improvements in computing power.
Read more at NBC News
Army Awards $2.2B for Nuclear Microreactors at Military Sites
Earlier this month the U.S. Army announced that it plans to add nuclear microreactors at five military bases from New York to Texas as a reliable source of energy independent of the commercial electric grid. The announcement comes as the Trump administration pushes hard to develop the next generation of nuclear power, including billions in loans for large nuclear reactors to meet skyrocketing power demand from data centers and a pilot program to boost advanced reactor designs and projects for military and civilian use. No nuclear microreactors are supplying power to the commercial electric grid in the United States today.
Five companies selected by the Army will be awarded up to $2.2 billion in total over five years to own, construct and operate the microreactors, if they hit set milestones along the way for their performance. The Army expects that more than 20 nuclear microreactors will be built and operated. Army and industry officials say microreactors offer a resilient power source for critical infrastructure at military installations in case the grid fails. Reactors can run for years without refueling.
Read more at The NAM
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