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One of the architects of industrial globalization is going local. From a locomotive factory in tiny impoverished village in southeast India to an engineering center in Poland, General Electric Co.is setting local roots, the WSJ's Ted Mann and Brian Spegele report, redrawing the global supply chains the company built through advanced economies over the last six decades. With trade's role in the global economy still below the levels seen before the financial crisis, the world that big manufacturing giants helped build is slipping away. For GE, this is the age of localization -- the company's survival strategy in an era of rising protectionism, increasingly powerful foreign customers and faltering global trade. To win big contracts, GE is trading a global footprint designed for maximum efficiencies of scale for a greater presence in local markets. The remoteness of the locomotive factory in India adds cost and complexity, but GE is building its future on the plan. And with companies including Honeywell International Inc. and Caterpillar Inc. making similar moves, the strategy signals big changes for years to come.
United Parcel Service Inc. insists it will use just about any form of transportation to deliver packages, but the Teamsters union says its latest effort is out of bounds. Amid the broad industry focus on new technologies, UPS is going old-school by having some drivers in Kentucky use golf carts to get goods to homes, the WSJ's Paul Ziobro reports. A new state law that allows delivery drivers to use the vehicles on some public roads led UPS to retrofit the vehicles and attach trailers or flatbeds, an attempt to use the most efficient, flexible transport to keep goods moving. The local union says the real savings are on labor since part-time drivers will operate the carts, and the union says the vehicles aren't safe for roads despite the face-lift UPS will provide. The big driver is e-commerce: with online sales fueling more residential deliveries, package carriers are anxious to cut the high costs of bringing conventional vans to neighborhoods.
Grocery delivery companies are moving fast, and it may be because a big competitor is coming up behind them. Amazon.com Inc.'s plan to buy Whole Foods Market Inc. adds new pressure on the companies that have promised to deliver rapid growth along with their shipments of resh food, the WSJ's Heather Haddon and Julie Jargon report, raising the stakes for companies including Instacart Inc., Peapod LLC, Shipt Inc. and FreshDirect LLC. Ahold Delhaize's Peapod is expanding its push into New York City after spending $94 million to put a warehouse in Jersey City, N.J., one of several expansions the operators are undertaking to build up what remains a niche business. Delivery services account for less than 2% of the $715 billion in U.S. food-retail sales, and face big hurdles in gaining customers. Razor-thin margins and tough logistics demands remain big issues, and experts say the planned Amazon-Whole Foods partnership will provide a new challenge, adding a competitor with big scale and infrastructure already in place.
TRANSPORTATION & INFRASTRUCTURE
Drivers going over the Brent Spence Bridge between Ohio and Kentucky will have plenty of time this summer to contemplate the decaying state of America infrastructure. Capacity on the notoriously jammed bridge, a key truck route that carries Interstates 71 and 75 across the Ohio River, will be cut in half as the span undergoes repairs, and the WSJ's Cameron McWhirter and Shane Shifflett report the project won't even provide the big fix that the site needs. The 53-year-old bridge is just one of about 84,000 U.S. bridges the Federal Highway Administration considers functionally obsolete, and its location at the heart of a region filled with distribution operations makes it especially painful for transport operators and shippers. The American Society of Civil Engineers estimates it would cost $123 billion to repair all the nation's bridges. One reason: About 40% of them are older than their average design life of about 50 years.
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IN OTHER NEWS
U.S. first-quarter economic growth was revised upward slightly on stronger consumer spending on services. (WSJ)
Eurozone businesses and consumers became more optimistic in June than at any time since before the global financial crisis. (WSJ)
The Trump administration is set to miss a self-imposed deadline for concluding a probe of steel imports because of unanticipated complexities in engineering such a big shift in U.S. trade policy. (WSJ)
A panel of top financial institutions and companies is pushing for more corporate disclosure about the risks that climate change pose to businesses. (WSJ)
Chinese auto maker SAIC Motor Corp. will start building cars in India, even as its partner in China, General Motors Co., quits India due to weak sales. (WSJ)
Sony Music Entertainment will resume producing and shipping vinyl records for the first time in three decades. (WSJ)
Walgreens Boots Alliance Inc. and Rite Aid Corp. nixed their merger agreement and agreed instead to have Walgreens buy half of Rite Aid's stores. (WSJ)
Sycamore Partners intends to split Staples Inc. into three separate entities, including one focused on supplying corporate customers. (WSJ)
Shares of Blue Apron Holdings Inc. stalled in their stock-market debut, capping a rocky initial public offering for the meal-kit maker. (WSJ)
Strong overseas sales helped fuel growth in Nike Inc.'s fourth-quarter profit despite higher costs and tepid gains in North America. (WSJ)
Germany's VMDA engineering federation sharply raised its output forecast for the sector, citing strong demand from the eurozone and Asia. (WSJ)
India plans to sell some or all of the government stake in debt-ridden national carrier Air India. (WSJ)
The U.S. cited Dalian Global Unity Shipping Co. among Chinese groups and individuals sanctioned for ties to the government of North Korea. (The Hill)
Dockworkers in Spain accepted an agreement including a wage reduction and ended their strike at ports. (Journal of Commerce)
Belgium's Port of Antwerp is running a logistics automation test project using blockchain technology. (CoinDesk)
Shipping technology company MacGregor and bulk carrier ESL Shipping Oy will jointly develop robotic bulk handling cranes for ESL's ships. (Port Technology)
Industrial parts manufacturer Timken bought Dutch lubrications distributor Groenveld, its fifth acquisition in the past year. (Industrial Distribution)
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 email@example.com
(END) Dow Jones Newswires
June 30, 2017 07:11 ET (11:11 GMT)