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Amazon.com Inc. is facing major questions over its acquisition of Whole Foods Market Inc. , and the answers may help determine how both companies look in the future. Beyond basic cross-selling opportunities, the WSJ's Laura Stevens reports Amazon will consider how deeply it will integrate its new subsidiary after the $13.7 billion deal closes later this year. The level of integration carries big stakes for both operations, and Amazon's track record provides clues on how it looks at its acquisitions. Amazon left online shoe seller Zappos largely autonomous after its $1.2 billion acquisition in 2009, but fine-tuned its supply chain efficiency and cut costs -- something likely to happen at Whole Foods. But Amazon folded warehouse-robot maker Kiva fully under its corporate umbrella after its 2012 purchase. That helped Amazon's operations while keeping the technology away from rivals. Amazon may look at Whole Foods that way if it views the grocer, with its network of exclusive suppliers and real estate, as a strategic asset touching more of Amazon's larger business.
Glencore PLC is riding a commodities turnaround now, but the Swiss mining and trading giant sees electric cars helping drive its future earnings. The company is deepening its investments in some raw materials, the WSJ's Scott Patterson reports, after it reported a $2.5 billion net profit in the first half of 2017 following a loss a year ago. The results follow similar strong reports from mining companies including Rio Tinto PLC and Anglo American PLC, and the financial strength in the commodities world is brightening prospects in the beleaguered dry bulk shipping sector. Glencore's first-half revenue rose 44% to $100 billion, and the company is brimming with confidence over its essential role in developing technology supply chains. Glencore is the world's biggest producer of cobalt, a key commodity in the lithium-ion batteries that power electric vehicles and mobile phones. It said cobalt prices have more than doubled in the past year, one reason the mining business is enthralled with new technology.
Blue Apron is having a hard time putting together the recipe for both getting customers and delivering the goods. In its first earnings update since a June initial public offering, Blue Apron said its costs soared 86% to $65.7 million, the WSJ's Heather Haddon reports, as the New York-based company hired more employees and struggled with the opening of a new fulfillment center. That Linden, N.J., site is eventually supposed to handle more than half of Blue Apron's meal kits. But the operation has run into delays, and that's hurting the company's ability to roll out new products and, more critically, hold onto customers. It's a familiar case where a business plan founders on logistics execution, but it's magnified at Blue Apron because distribution is central to the company's bid to carve out a new market. Blue Apron boasts roughly a million customers but will need to get more meal kits delivered on time and intact to keep its business moving.
The building blocks for toys are becoming less focused on -- blocks.Lego A/S is changing leadership as the toy maker focuses more fully on technology, the WSJ's Saabira Chaudhuri reports, following a market for toys that is moving in a digital direction. Lego's replacement of Bali Padda, a 61-year-old British-born executive who had been in job for just eight month, with Niels B. Christiansen, the 51-year-old former boss of Danish industrial group Danfoss A/S, is the most visible sign of change at the iconic Danish toy maker. The deeper shifts come as Lego copes with slowing sales growth and competition from smartphone apps and videogames, changes that may roil the global toy manufacturing and shipping world. Descartes Datamyne measured the U.S. toy import business at more than $14 billion in 2015. But Lego and rival Mattel Inc. are focused on modernizing toys for a digital era, and that may promise more screen time for children and fewer goods heading to ports.
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What is a $10 billion factory for technology goods really worth? The question is raising new heat in Wisconsin as the state considers the costs of drawing Foxconn Technology Group to build a manufacturing facility employing up to 13,000 people. Gov. Scott Walker defends Foxconn's $3 billion tax incentive package, telling the WSJ's Shayndi Raice the deal will be "transformational" for Wisconsin, even as criticism arises over the hefty tax bill. A state fiscal analysis found taxpayers wouldn't recoup their investment until the 2042-2043 fiscal year. The debate highlights questions around the field of site selection that is critical to supply chains. Big manufacturers and logistics companies often seek significant local and state tax breaks, but critics say the incentives aren't always worth it, and may just move jobs around rather than spurring overall job growth. Mr. Walker insists the Foxconn deal carries bigger benefits, and will help spur a larger eco-system of technology research, manufacturing and employment.
IN OTHER NEWS
A gauge of U.S. business prices fell in July for the first time in 11 months. (WSJ)
SoftBank Group Corp.'s technology fund will invest about $2.5 billion in India's biggest e-commerce firm Flipkart Group. (WSJ)
Macy's Inc. and Kohl's Corp. reported that declines in sales moderated in the past quarter. (WSJ)
Italy has seen a sharp drop in the number of seaborne migrants, raising hopes that Europe's migration crisis is easing. (WSJ)
U.S. investigators say Islamic State used fake eBay transactions to funnel money to an alleged ISIS operative in the U.S. (WSJ)
Oil investors are losing confidence that drillers in West Texas' Permian Basin can keep production rising. (WSJ)
Casual dining bellwether DineEquity Inc. plans to close up to 160 Applebee's and IHOP restaurants. (WSJ)
Tesla Inc. is talking to state authorities about road-testing heavy-duty trucks that use autonomous and "platooning" technology. (Reuters)
Los Angeles-based startup Chanje plans to start selling electric-powered medium-duty trucks in the U.S. in the coming weeks. (Los Angeles Times)
Beauty products subscription service Birchbox has held acquisition talks with retailers including Wal-Mart Stores Inc. (Recode)
Brazilian mining giant Vale SA has sold almost all of its very large ore carriers. (Splash 24/7)
The National Retail Federation's Global Port Tracker forecasts U.S. import container volume will grow 2.1% in August amid a buoyant peak season. (Journal of Commerce)
Maersk Line parent A.P. Moller--Maersk A/S will work with Danske Bank in a joint venture offering digital payment services for global customers. (Port Technology)
Samsung Electronics Co. Ltd. struck a logistics joint venture in Vietnam with local operator Minh Phuong to better manage the flow of its goods there. (VietNamNet)
Taiwanese shipping line Yang Ming Marine Transport Ltd. cut its second-quarter loss 90% to $14.7 million. (American Shipper)
Unionized workers at a New Jersey-based clothing distribution center supplying large retailers walked off the job to protest low wages. (Newark Star-Ledger)
Federal regulators are wrestling with the complexity of pharmaceutical supply chains in setting rules for identifying and tracing drugs. (Pharmaceutical Technology)
Indiana plans a $20 million expansion of cargo facilities at its Port of Indiana-Burns Harbor on Lake Michigan. (Northwest Indiana Times)
The lifting of a state of emergency in Ethiopia may put the country on track to attract textile and apparel firms. (Sourcing Journal)
Some states want truckers to change delivery schedules to avoid congestion expected during this month's solar eclipse. (Transport Topics)
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
August 11, 2017 06:49 ET (10:49 GMT)