Rob Cox: GE should put itself up for sale 1 Apr 2014 April Fools’ Day joke? Nope. It’s a shareholder proposal on the ballot at GE’s annual meeting. Setting aside the absence of buyers for a $260 bln company, it illustrates the kind of shareholder democracy gone wild that many boards and an SEC commissioner would like to squelch.
Rival’s split makes it harder for Dow to resist 10 Mar 2014 FMC, a $10 bln pesticide-to-battery-parts maker, is splitting its fast-growing ag and pharma businesses from stodgier commodity minerals. It’s similar to the breakup activist Dan Loeb wants at Dow Chemical. Boss Andrew Liveris is standing firm. FMC’s move weakens his case.
Elon Musk’s Gigafactory puts utilities on notice 6 Mar 2014 The Tesla CEO reckons he can kick off a virtuous circle by doubling world lithium-ion battery production. Musk expects that to slash costs by more than 30 pct and add a turbo boost to Tesla’s sales. It may also leave electric pylons looking as outdated as telephone poles.
Big Consumer struggling to manufacture growth 21 Feb 2014 The industry’s annual U.S. confab is chock-a-block with whiz-bang products like Bluetooth-enabled toothbrushes and funnel-cake corn dogs. But it’s just empty calories if it doesn’t lead to robust top lines. Cost-cutting alone can’t justify today’s expensive share-price multiples.
Conti takes smart road west in $2 bln Veyance deal 11 Feb 2014 The German automotive group is buying the U.S. rubber and plastics firm from private-equity owner Carlyle. Investors may be disappointed Conti is doing M&A rather than returning cash. But the price looks undemanding and there’s strategic logic in diversifying away from Europe.
Dan Loeb puts the right accelerant in Dow Chemical 21 Jan 2014 The activist investor wants the company to hive off its petrochemicals unit, a more aggressive move than CEO Andrew Liveris has hinted at. Loeb’s analysis looks optimistic, but a sum-of-the-parts analysis suggests merely breaking up Dow could boost its value by a fifth.
U.S. employers will bring more jobs back home 26 Dec 2013 The nation’s energy costs and wage growth are lower than in many other countries. Productivity’s higher, too. Not only does it make outsourcing to the likes of China less appealing. It may also herald a renaissance for American manufacturing.
Review: Dissecting America’s manufacturing retreat 1 Nov 2013 “Made in the USA” challenges the idea that U.S. industrial decline was inevitable or desirable. Canadian academic Vaclav Smil blames bad choices, not just changing economic tides. But his argument for better industrial policy veers dangerously towards protectionism.
High-tech glass maker finds smashing way to grow 23 Oct 2013 Corning’s taking full control of its Korean LCD display unit from Samsung and other minorities. Samsung gets a chunk of the Gorilla Glass maker and a long-term partner to produce needed high-tech materials. And Corning strengthens its position against its rivals on the cheap.
Kochs follow Buffett in takeovers, if not politics 9 Sep 2013 The conservative Koch brothers have taken a leaf from the more liberal Sage of Omaha in their $7.2 bln purchase of Molex. The family firm will be run as a separate unit, retaining existing management. Buffett’s favorite banker, Byron Trott, even appeared at the negotiating table.
Industrialist hat suits Bill Ackman better 27 Aug 2013 Retailing clearly isn’t his thing. A big bet on $22 bln Air Products, however, is the uppity investor’s second effort in heavier production after Canadian Pacific. As at the railway, better management could go a long way. A lot has to go right, though, to replicate that success.
China’s next reform: more central planning 26 Jul 2013 The central government wants to cut excess capacity in basic industries by telling 1,400 companies to shut factories. It has to overcome the free-market instincts of local governments and entrepreneurs. But if the plan works, China will be more efficient - and less polluted.
Improving margins will be leaner Siemens’ real test 10 Jul 2013 The German industrial group pleased investors by hiving off two underperforming units. Getting rid of Nokia Siemens Networks and Osram are indeed milestones in refocusing the company. Improving the profitability of the remaining core business remains a bigger challenge.
ThyssenKrupp’s pride well worth 1 billion euros 1 Jul 2013 That’s how much new capital the German steelmaker may need. The RAG foundation, a local rival to the one that controls Thyssen, seems willing to buy a stake. While hurting vanities, this would be an elegant fix to the company’s woes. Pride is a luxury Thyssen can’t afford.
Cinven goes weak at the knees for Rockwood unit 17 Jun 2013 The private equity firm is paying a hefty $2 bln for Rockwood’s CeramTec unit. But at least this is a corporate selloff, rather than yet another “secondary” deal between two PE houses. And there is sound demographic logic in buying one of the leaders in artificial joints.
GE Capital chief exit puts spotlight on Immelt 30 May 2013 Michael Neal may be leaving after eight years running the erstwhile high-flying lending unit. He got GE Capital back in shape after the financial crisis, but it’s no longer the company’s key division. Neal’s departure raises the question of who will succeed GE boss Jeff Immelt.
Eaton-Cooper deal needs revenue synergies to work 21 May 2012 The U.S. industrial group’s $11.8 bln purchase of Cooper nearly defies the norm, where takeovers punish the acquirer’s shareholders. The net present value of future synergies is comfortably higher than the premium on offer, but only if additional sales are to be believed.
UK would gain from intelligent industrial policy 7 Mar 2012 British politicians have long shied away from coherent long-term economic plans. But ad hoc decisions on technologies, infrastructure, immigration and banking are not good enough. Vince Cable, the business secretary, is right to call for a new vision.
Brazil oil riches may sabotage infant firm policy 29 Sep 2011 The BRIC nation wants to build world-beating firms that do more than extract natural resources. Protecting embryonic industries created big winners in Korea and Japan. But unless Brazil can prevent its energy wealth inflating its currency, multinational wannabes could struggle.
China’s super-railways on track for debt troubles 15 Aug 2011 New super-fast railways would struggle to repay their colossal borrowings even before new safety fears, which will push costs up and demand down. The country benefits, since the perks of fast trains aren’t all financial. Not so investors in banks who fund these trophy projects.