By Paul Page
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President Donald Trump is pledging big changes in Apple Inc.'s
supply chain -- "big, big, big" changes. The president told The
Wall Street Journal in an interview that Apple Chief Executive Tim
Cook has committed to build three big plants in the U.S., the WSJ's
Tripp Mickle and Peter Nicholas report, a dramatic upgrade on
Apple's plan for U.S. work that would help fulfill his
administration's economic goal of reviving American manufacturing.
Mr. Trump said Mr. Cook promised him Apple would build "three big
plants, beautiful plants," but he wouldn't elaborate on where and
when those factories would be built. Apple, which declined to
comment, has said it would create a $1 billion fund to invest in
U.S. companies that do advanced manufacturing. Apple now depends on
contract manufacturing, most of it in China and a small share at
three sites in the U.S. In the interview, Mr. Trump said people in
states without jobs will have to move to states like Wisconsin,
Iowa and Colorado that are adding "these massive plants."
The flow of vehicles across the U.S.-Mexico border is changing,
but not in the way the White House envisioned. New data shows
production of light vehicles in Mexico rose 16% in the first half
of this year, the WSJ's Mike Colias and Chester Dawson report, just
as tepid sales of sedans held down production in the U.S. and
Canada. The shift in car sales, with sport-utility vehicles growing
in popularity, has sent the value of light-vehicle imports from
Mexico to the U.S. soaring by 40% through May this year. President
Trump has launched several attacks on Mexican car imports, but one
in five cars built in the North America now comes from Mexico, the
highest share in nearly a decade. Consumers are responding to
market forces, turning to pickups and SUVs amid low gas prices,
illustrating the challenge facing the administration as it seeks to
push North America's automotive supply chains in a different
direction.
A battle is breaking out between customers and suppliers in the
world's high value, high stakes aviation supply chains. Boeing Co.
and Airbus SE moves to grab a bigger piece of the aftermarket
business for aircraft parts are triggering a supplier backlash, the
WSJ's Thomas Gryta reports, with United Technologies Corp. warning
of higher prices for jet engines and other parts if the aircraft
manufacturers push into its business territory. The two sides are
wrestling over changing business models and the search by Airbus
and Boeing for new, predictable revenue streams in a volatile
aircraft market. Engine makers like United Technologies' Pratt
& Whitney unit, General Electric Co. and Rolls-Royce Holdings
PLC typically sell their goods with little or no profit but make up
the money by selling decades of servicing and parts. The jet makers
envy that long-term tie to customers, but getting into that
business may carry big upfront costs.
SUPPLY CHAIN STRATEGIES
New technology is fracturing the field for suppliers for
smartphone display panels. LG Display Co. plans to spend $7 billion
to churn out more smaller-size organic light-emitting-diode panels,
the WSJ's Eun-Young Jeong reports, a challenged to Samsung
Electronics Co.'s dominance in the market for the OLED panels. The
bulk of smartphones use LCD displays, but premium smartphones are
switching to OLED, and Apple will use the thinner, more flexible
part for its upcoming iPhone 8. It's a sign that the high stakes
and the high concentration in some electronics lines -- the
OLED-making Samsung Display unit holds a 97.1% share of the market
by revenue -- is drawing more competition among suppliers. Research
firm IHS Markit projects the global OLED market to reach $25.2
billion this year, up 63% from last year. That growth is
reshuffling some manufacturing, with LG shifting some factory work
to accommodate the new market.
A new focus on cargo is providing an important boost to
Cincinnati/Northern Kentucky Airport, although to be fair the
mini-horses have also helped. Authorities at the airport have
completed a transformation of the site since Delta Air Lines scaled
back its hub operations there, the WSJ's Shibani Mahtani reports,
shrinking its passenger terminal space and committing more of its
7,500-acre property to sprawling logistics operations, including
Deutsche Post AG's DHL and Amazon.com Inc. Along with a focus on
smaller, discount passenger operations and more on-site services,
the airport has overhauled its business, with more than half the
landed-weight of aircraft now coming from cargo operations. The
passenger side includes unusual features like miniature horses that
visit the terminal, but the big gain has come from logistics,
including Amazon's decision this year to spend $1.5 billion to turn
the site into an air hub.
QUOTABLE
IN OTHER NEWS
Canadian Prime Minister Justin Trudeau, setting up a dispute
with the U.S., says it is "absolutely essential" a revised North
American trade pact includes a dispute-resolution panel. (WSJ)
Amazon will hold a job fair in August to fill 50,000 jobs,
mostly in its U.S. warehouses. (WSJ)
Caterpillar Inc. signaled cautious optimism about the global
economy as it reported growing second-quarter sales and stronger
demand for its construction equipment. (WSJ)
Toyota Motor Corp. says it is near a major breakthrough in
electric-car batteries that would allow for smaller power units
that can hold a charge longer. (WSJ)
General Motors Co. expects to cut elevated auto inventories to
normal levels by year end after reporting reduced second-quarter
profits. (WSJ)
Luxury-goods retailer Michael Kors will buy shoe maker Jimmy
Choo for $1.17 billion and says it plans more acquisitions.
(WSJ)
A court approved Payless ShoeSource Inc.'s reorganization plan,
moving the discount shoe retailer closer to exiting bankruptcy
protection. (WSJ)
German car parts maker ZF Friedrichshafen AG recently held
takeover talks with Wabco Holdings Inc. before they fell apart.
(WSJ)
Barnes & Noble Inc. is open to discussing a hedge fund's
call to put itself up for sale. (WSJ)
McDonald's Corp. boosted its second-quarter profits as it
slashed prices to lure customers in a fast-food "market share
fight." (WSJ)
Chinese e-commerce company JD.com abruptly severed links with
courier group Tiantian in the latest spat in the country's booming
logistics sector. (Financial Times)
A U.K. government official says corporate bosses could be jailed
for labor abuses and companies could be fined for violations by
smaller firms down the supply chain. (The Guardian)
Werner Enterprises Inc. reported a 27% boost in second-quarter
profit on improved truckload efficiency and growing dedicated
services revenue. (American Shipper)
Roadrunner Transportation Systems Inc. closed on a five-year,
$292 million financing to help the struggling trucker's
recapitalization efforts. (DC Velocity)
British supermarket giant Tesco PLC launched nationwide same-day
grocery delivery. (Logistics Manager)
The Georgia Ports Authority will buy six gantry cranes for $73
million to handle the bigger container ships at the Port of
Savannah. (Atlanta Journal-Constitution)
Ultra-large container ships will double their share of the
Asia-Europe trade lane within the next 18 months, says SeaIntel.
(Splash 24/7)
Dubai-based DP World's container volumes at its terminals around
the world grew 10.7% in the second quarter. (Arabian Business
World)
Ship-charter company Diana Containerships Inc. swung to a $36.5
million second-quarter profit. (Journal of Commerce)
Trade critics in the U.K. are warning a new pact with the U.S.
would bring in a flood of chlorine-washed chickens.
(MarketWatch)
ABOUT US
Paul Page is deputy editor of WSJ Logistics Report. Follow him
at @PaulPage, and follow the entire WSJ Logistics Report team:
@brianjbaskin , @jensmithWSJ and @EEPhillips_WSJ. Follow the WSJ
Logistics Report on Twitter at @WSJLogistics.
Write to Paul Page at paul.page@wsj.com
(END) Dow Jones Newswires
July 26, 2017 07:09 ET (11:09 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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