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United Technologies Inc.'s bid to consolidate jet parts manufacturing is setting off a clash in the aerospace supply chain. Boeing Co. is threatening to drop some of its contracts with United Technologies Corp. and Rockwell Collins Inc., the WSJ's Doug Cameron and Thomas Gryta report, and warned it may launch a regulatory fight against the $23 billion deal. The missile from Boeing highlights the high stakes behind the blockbuster acquisition and its impact on the aerospace sector, where the big jet makers Boeing and Airbus SE are looking to cut production costs and seek new revenue streams by pushing into maintenance and repairs. Those efforts hit at the business, and potentially the profits, of the big aircraft parts suppliers. United Technologies wants Rockwell's help in adding digital features to its aircraft systems, but it also wants the scale to stand up to its big customers. The sheer scale of the deal, however, will make the antitrust scrutiny even tougher.
The robot apocalypse is hitting the U.S. economy with a whimper, not the job-destroying bang that some have predicted. The surge in automation and digital technology that has fueled e-commerce growth and a brick-and-mortar swoon has created more jobs in the U.S. than traditional stores have cut, the WSJ's Greg Ip writes, defying forecasts that the tech-driven overhaul in the economy would push workers to the curb. The shift has upended jobs and the retail market, forcing thousands of stores to close. But there is strong evidence e-commerce has added to overall employment, often with logistics jobs that pay more because workers are more productive. Michael Mandel of the Progressive Policy Institute says warehouse and storage jobs are being undercounted, and total e-commerce employment not including parcel delivery drivers has grown by 401,000 since 2007, nearly three times the brick-and-mortar retail drop. Warehouses are adding automation, of course, but there's no evidence yet that the effort can keep up with demand.
Great Wall Motor Co.'s push to go global by acquiring Jeep would give the Chinese auto maker access to foreign markets and its first stake in the U.S. automotive supply chain. The prospects for a deal remain uncertain, the WSJ's Trefor Moss reports, but the impetus for a possible acquisition comes largely from the tough realities Great Wall faces at home, including declining profits, new regulations and growing competition in its core SUV segment. Great Wall is signaling that foreign expansion may be the best way to boost profits amid its domestic pressures. The company's moves reflect the rapid growth in China's automotive business and the impact the Chinese market is having on auto manufacturing and parts distribution around the world. Great Wall has little or no presence in the U.S., but buying Jeep from Fiat Chrysler Automobiles NV would bring a robust sales presence, along with factories in Ohio, Illinois and Detroit, as well as sites in Mexico and Canada.
Lego A/S is scrambling to rebuild its business for a digital age. The iconic toy maker is laying off 1,400 workers and thinning its management, the WSJ's Saabira Chaudhuri reports, as it copes with its first drop in sales in 13 years by increasing efforts to cater to the world's increasingly tech-savvy children. The problems at Lego, rival Mattel Inc. and others show the toy industry has become the latest business to suffer from digital disruption, a trend that promises to push fewer building blocks and gadgets to stores as playtime increasingly turns into screen time. Toy makers are trying to modernize: Lego has rolled out videogames based on its plastic bricks as well as programmable robots that combine computer coding with physical construction. The shift, however, hasn't come fast enough to counter eroding sales of traditional lines. Lego's goal now is to get more nimble and better able to introduce new product lines as fast as children switch out toys.
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IN OTHER NEWS
Airlines canceled flights across the Caribbean and transport operators started assessing Florida operations as Hurricane Irma barreled forward as one of the most powerful Atlantic storms ever recorded. (WSJ)
U.S., Canadian and Mexican officials notched minor progress in a second of talks aimed at renegotiating the North American Free Trade Agreement. (WSJ)
Business surveys suggest the eurozone economy is slowing slightly. (WSJ)
The city of Houston turned to long-term recovery efforts in the wake of Hurricane Harvey as ports and other businesses resumed more operations. (WSJ)
European retail real-estate companies have withstood the internet-driven industry downturn better than U.S. shopping mall owners. (WSJ)
New industrial figures show the U.K.'s economy losing momentum amid growing concern over Brexit talks. (The Independent)
Japan Post Holdings Ltd. plans an estimated $12 billion share sale in its first return to equity markets since going public. (Financial Times)
Shipping analyst group Seaintel says structural imbalance in supply and demand will keep a lid on container shipping rates for at least two years. (Journal of Commerce)
U.S. transported trade with Canada and Mexico increased 7.7% in June. (Logistics Management)
Global air freight traffic rose 11.4% in July, the third straight month of double-digit growth. (Reuters)
The Corpus Christi, Texas, Port Commission authorized $32.2 million in spending to start an expansion project that's been in the works for 27 years. (Corpus Christi Caller-Times)
Icelandic shipping company Eimskip's second-quarter earnings tumbled 43.6% on currency headwinds despite a 37% gain in revenue. (American Shipper)
Daseke Inc. will buy R&R Trucking, a specialized carrier of defense and related commercial trucking shipments. (Fleet Owner)
Missouri-based Wilson Logistics bought assets of Haney Truck Lines, a Pacific Northwest trucker. (Commercial Carrier Journal)
H.B. Fuller Co. will buy Royal Adhesives & Sealants in a $1.58 billion deal combining two of the largest U.S. manufacturers of commercial and industrial adhesives. (Minneapolis Star-Tribune)
Australian logistics operator Linfox Group took full control of drinks carrier BevChain. (The Australian)
Developers are planning to build more than a million square feet of distribution space on Chicago's South Side. ( Chicago Tribune)
XPO Logistics Inc. will take over a 628,475-square-foot warehouse outside Allentown, Pa. (Allentown Morning Call)
Germany's BASF is using blockchain technology and digital "smart pallets" to improve visibility and decision-making in logistics operations. (Supply Chain Quarterly)
India wants the International Maritime Organization to include "spirituality leadership" in its maritime education and training program. (Hindu Business Line)
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 firstname.lastname@example.org
(END) Dow Jones Newswires
September 06, 2017 06:27 ET (10:27 GMT)