|
Trade Wars
Auto Supplier CEOs Say There Will and Needs to Be More Consolidation in the Industry
Speaking at last month’s J.P. Morgan Automotive Conference in New York, executives of Dauch Corp. (the former American Axle & Manufacturing), Cooper-Standard Holdings Inc. and Dana Inc. discussed the trends shaping their market and how they’re responding. Both Dauch, which in February completed its $1.4 billion purchase of GKN Automotive parent Dowlais Group, and Dana, which plans to wrap up its $5.1 billion deal to join forces with Eaton Mobility early next year, have recently consolidated parts of the industry. And the consensus is that more transactions are needed.
Finding a healthy and profitable balance between amassing scale, innovating product lines and branching into new markets is quite the tightrope for auto suppliers to walk these days. But as the world’s auto OEMs defend their turf and/or stake claims to new territories (geographical and technological), it seems very likely that new shocks will test their suppliers soon. The global expansion of Chinese manufacturers surfaced in several conversations at the J.P. Morgan conference, with Dauch saying that Europe looks set for more restructurings and other strategic moves as Chinese firms eye the excess capacity on the continent. Edwards noted that Cooper-Standard has been growing its Chinese revenue base and intends to grow along with its customers there.
Read more at IndustryWeek
Dell Again Lifts Annual Forecasts As AI Demand Powers Record Results
Dell Technologies on Tuesday boosted its annual revenue forecast by $25 billion while also raising its profit outlook for the second time this year, driven by soaring demand for its AI servers. Dell's shares rose 7% in extended trading. The servers, equipped with Nvidia's, are sought by clients including AI cloud providers Nscale and CoreWeave to build computing clusters for training and running AI models. Dell raised its annual revenue outlook to $192 billion from $167 billion and adjusted earnings per share forecast to $25.50 from its earlier expectations of $17.90.
Dell’s second-quarter revenue rose 58% to a record $47 billion, exceeding an LSEG-compiled estimate of $44.92 billion. Adjusted earnings of $7.04 per share topped estimates of $4.91. Sales at Dell's PC segment rose 20%, driven by commercial clients, echoing growth at HP. Clarke said the PC unit's revenue is growing at its fastest rate in five years.
Read more at Reuters
GoPro to Merge With Starman Optical in $285 Million Deal
After years of financial struggles, GoPro has announced a “definitive merger agreement” with Starman Optical Inc., a privately held, US-based optical-phototonics company. Starman Optical will pay $285 million, or $1.14 per share, for 90% of GoPro’s shares, and the agreement will also eliminate GoPro’s current debt of $92 million. Prior to this announcement, GoPro was in danger of being de-listed from the Nasdaq stock market, which happens if a company’s stock sits below the minimum bid price of $1 for 30 consecutive days.
Charles Tebele, Chief Executive Officer of Starman Holding, said, "Advanced optics and imaging are essential to AI, national security, and the broader economy, yet much of the critical hardware supporting these technologies continues to be manufactured overseas. The combination of GoPro's world-class optical expertise and intellectual property with Starman's advanced transceiver capabilities and U.S. manufacturing platform creates a unique opportunity. Together, we intend to bring production of these critical components back to the United States.”
Read more at Yahoo Finance
US Diesel Hits Highest Since April as Wars Strain Global Supply
US diesel advanced to the highest price since hitting a peak in April during the initial phase of the US-Iran war, highlighting the inflationary pressures menacing the global economy as the conflict drags on. The nationwide average retail price reached $5.688 a gallon on Tuesday, according to the American Automobile Association. That's just a fraction below the April high, which was the costliest since mid-2022.
Diesel is the lifeblood of the global economy, powering trucks, agriculture and construction, and spikes at the retail level affect industries as well as consumers. The fuel has been boosted this year by the conflict in the Middle East, as well as the Russia-Ukraine war. Moscow — typically a major supplier — has curbed exports following waves of attacks on its refineries. Goldman Sachs Group Inc. has been among the banks warning of tightness in the diesel market, highlighting strikes on refineries in the Middle East and Russia that have hit already-stretched global capacity. As energy prices advance, "diesel remains at the epicenter of the rally," the bank's analysts said in an Aug. 28 note.
Read more at Yahoo Finance
U.S. Navy Awards GE $2.87 Billion For F/A-18 Engines
The U.S. Navy has awarded GE Aerospace a five-year contract worth up to $2.87 billion to keep the engines powering its F/A-18 E/F Super Hornet and EA-18G Growler fleet running, one of the largest single logistics contracts the Navy has issued for the program. The performance-based logistics contract covers support for 17 components of the F414 engine. Work will be performed primarily in Lynn, Massachusetts, GE’s longtime home for the F414 program, which will handle 90 percent of the effort. The remaining 10 percent will be performed at the Navy’s Fleet Readiness Center Southeast in Jacksonville, Florida, where GE has partnered with the Navy on depot-level repair work for nearly two decades. The contract runs through August 2031 and includes no option periods.
The F414 is a derivative of GE’s earlier F404 engine, the powerplant that flew the original F/A-18 Hornet, enlarged and improved to power the newer Super Hornet and Growler. The Navy’s long-range procurement plan has called for more than 1,000 F414 engines across its history, and GE has delivered more than 725 of them to date, according to the company.
Read more at Defense Blog
Unifor Secures GM Deal Ratification Amid Frayed Trade Relations
Canada’s main automotive union Unifor has secured its members’ support for a three-year collective agreement with GM, while the US-Canadian trade relations that underpin the two countries’ highly integrated auto sector remain frayed and unsettled. Unifor’s announcement it had secured a tentative deal with GM came on August 22, just one day after the Canadian government pulled negotiators from trade talks with the U.S. This was partly over new U.S. demands that Canada-made pickups sold in the U.S. would be saddled with tariffs.
In votes announced on August 30, the 4,600 Unifor members at the GM’s Oshawa Assembly Plant, St. Catharines Propulsion Plant, Woodstock Parts Distribution Center and CAMI Assembly in Ingersoll, all in Ontario, voted overwhelmingly in favor: 96.5% in support at the currently mothballed CAMI plant and 80.5% at the other three plants. Pay and conditions largely reflected the pattern agreement Unifor secured with Ford in July, including a 3% annual wage increases, with laid-off CAMI workers given “income maintenance plan” support until May 1, 2028. Overall, GM pledged more than CA$1.4 billion ($1 billion) in Canadian investments. This included returning its next-generation GMC Sierra Heavy Duty production to Oshawa and building a new single source next-generation transmission at the St. Catharines Propulsion Plant.
Read at Ward’s Auto
Power Management Eaton To Locate $242 Million Facility In Arkansas Adding 1,200 Jobs
Eaton Corp. said Wednesday iit intends to locate a new state-of-the-art manufacturing facility in North Little Rock. The facility represents an investment of more than $242 million and is expected to create 1,200 new jobs in the region. Eaton will manufacture customized electrical enclosures for its Fibrebond business in North Little Rock to meet the growing demand across the data center, utility, industrial, and digital communications markets. The company expects to double its U.S. manufacturing capacity of the electrical enclosures with the new North Little Rock facility.
“Customers are looking for ways to deploy critical power infrastructure faster, with greater certainty and less complexity,” said Mike Yelton, president, Electrical Sector, Americas, Eaton. “This investment expands our ability to deliver custom modular electrical enclosures while strengthening our U.S. manufacturing capacity and skilled workforce. Building on the strong foundation we’ve established in Minden, Louisiana, this investment enables us to better support customers with the speed, scale and expertise they need to meet growing demand.”
Read more at Talking Business
US, China Arm For Space Warfare: Hunter Satellites And Orbital Weapons
In June, a secretive unmanned Chinese spaceplane closely monitored by U.S. military analysts released a small satellite hundreds of miles above Earth in an orbital region crowded with commercial and military satellites. The object then looped around another Chinese satellite before returning towards the spaceplane, according to U.S. space-tracking firm LeoLabs.
Little is known about the satellite or the mission. But the U.S. military operates a similarly secretive spaceplane resembling a small shuttle, also with no crew. Both programs reflect the rapidly evolving field of military space operations as Beijing and Washington prepare for the possibility of conflict extending into space, according to a Reuters review of documents, space-tracking data and interviews with current and former military officials.
Read more at Reuters
Elon Musk Wants to Make Power-Turbine Components. It Won’t Be Easy.
Only a few companies make the crucial components for power turbines that AI data centers are so desperate to get. Elon Musk wants to go ahead and make his own. That has unnerved investors in this prized oligopoly. Over the weekend, Musk confirmed on X that SpaceX. will start making the blades and vanes that go into natural-gas-fired power turbines. “By doing in-house casting at SpaceX, we can accelerate nat gas turbines coming online by up to 18 months, which is a profound game-changer,” he wrote in his post, responding to a report from the Information.
SpaceX will face barriers to entry. One reason there are so few companies in this sector is that it is technically challenging to make the blades, which must withstand extreme temperatures and rapid rotations. The casting process involves making a new wax mold from scratch each time. Making these parts requires the blade to be “grown” in a vacuum furnace as a single crystal of nickel superalloy, according to Nigel Chiang, an analyst at SemiAnalysis. Even a stray grain or hairline defect means the part has to be scrapped, he added. A new manufacturing line could scrap over half its production for a long period. It is also a highly secretive process. Once the parts are produced, the ceramic cores and wax used to make them are destroyed, Howmet’s Chief Executive John Plant said at an investor meeting earlier this year. That prevents competitors from reverse-engineering them.
Read more at The WSJ
|
