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Electronics supply chains that Apple Inc. has helped build across Asia are shuddering at the cutback in production of the latest iPhone. Apple is slashing its plans for making iPhone X handsets by half, to 20 million, in the current quarter, the WSJ's Yoko Kubota and Tripp Mickle report. Orders for components could be cut even more, by perhaps 60%, as reductions ripple across the broad eco-system of electronics manufacturing and distribution that Apple products have fostered. The latest reduction, the result of disappointing sales of the latest generation of the iPhone, is a new example of how companies in Apple's orbit can rise and fall as the company builds up new technology and then moves on or sees some features grow stale. Just last month, shares in Dialog Semiconductor, whose chips control power use in Apple products, fell by a quarter when it said its main client "has the resources and capability" to make its own power-management chips.
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Harley-Davidson Inc. is scaling down its U.S. supply chain as sales of its iconic motorcycles sag inside the country and abroad. The company is closing its assembly plant in Kansas City, Mo., and consolidating that production into one of its three remaining U.S. factories, the WSJ's Andrew Tangel reports, a step back for the manufacturing sector that follows recent announcements of new factory investments. Harley's problems look bigger than broad changes in the American economy that have fueled other factory expansion, however: The company's revenue from motorcycle sales fell 6.8% last year, and sales of its signature Hog line declined for the third straight year as it loses market share to overseas competitors. Harley has been looking to get more global its production. The company said last year it would put a plant in Thailand, in part to get tax breaks for motorcycles it ships to other Southeast Asian countries. Harley will see lower taxes in the U.S., of course, but what it needs now are more sales.
The era of driverless cars and delivery vehicles is well underway as far as some architects and developers are concerned. Planners in cities in North America, Europe and Asia are drawing up designs for streets with curbside drop-off areas for e-commerce deliveries and passengers rather than parking spaces, the WSJ's Peter Grant writes, while architects are laying out office and residential buildings with space for stacking up packages and delivery lockers. The goal for many planners, says an executive at one architecture firm, is to "future-proof" everything from roads to parking garages against what they say is an upheaval in transportation of goods and people. Real-estate developers and architects are thinking about a driverless future today because many of the structures and streets they're designing will still be around decades from now. They want to include flexibility so they can later adapt to changing transportation and shipping patterns with limited cost.
The very meager production of Tesla Inc. Model 3 sedans has created an unusual , big-money market for the electric cars. A shortage of the vehicles is fueling a frenzy among curious competitors, the WSJ's Tim Higgins reports, with some automotive companies paying upward of $500,000 to get their hands on the car billed as Tesla's entry into mass-market sales. The Model 3 so far hasn't worked out that way, with supply chain problems and production bottlenecks leaving fewer than 2,000 of the cars rolling out over the past two quarters. That's made the sedan a kind of model for the impact of supply scarcity in a market, with competitors and analysts scrambling to get their hands on the car. For some, it's purely a business decision. Engineering firm Caresoft Global Inc. has bought three Model 3s for around three times the list price each. They're in it not for the ride but for the technical analysis that Caresoft believes it can sell to competitors.
IN OTHER NEWS
President Donald Trump called for spending of "at least $1.5 trillion" on infrastructure but offered scant details on his State of the Union address on how to fund such a program. (WSJ)
U.S. consumer confidence rose in January. (WSJ)
A revival of the French economy helped the eurozone clock its strongest growth in a decade last year. (WSJ)
Mexico's economy expanded at its fastest pace in more than a year in the fourth quarter. (WSJ)
The U.S. homeownership rate rose in 2017 for the first time in 13 years. (WSJ)
Growth in U.S. home prices accelerated in November on tight supply. (WSJ)
Amazon.com Inc., Berkshire Hathaway and JPMorgan Chase & Co. are forming a company looking to reduce health-care costs for their U.S. employees. (WSJ)
Pfizer Inc. plans to invest $5 billion in manufacturing and other capital projects in the U.S. over the next five years. (WSJ)
McDonald's Corp. gained sales again by luring core customers to its cheapest meals and drinks. (WSJ)
Nikola Motor Co. chose the Phoenix area for a $1 billion manufacturing plant for its hydrogen-fueled heavy-duty trucks. (Reuters)
Sequoia Capital led a $21 million funding round for online freight marketplace Next Trucking. (VentureBeat)
U.S. steel imports rose 15.4% last year from the year before. (Northwest Indiana Times)
An investigation shows drug distributors sent 20.8 million prescription pain killers to a West Virginia town with 2,900 residents. (Charleston Gazette-Mail)
Uber Technologies Inc. reportedly looked at buying Chicago-based freight broker Load Delivered Logistics to bolster its Uber Freight service. (Recode)
Truckload carrier Werner Enterprises Inc.'s fourth-quarter operating profit soared 29% on a 9% gain in overall revenue. (Omaha World-Herald)
Covenant Transportation Group Inc. expects a measure of truck pricing to rise at a mid to high single-digit percentage rate this year. (Chattanooga Times Free Press)
CMA CGM Group is starting a incubator called Ze Box for digital shipping technology startups. (American Shipper)
India's Jawaharlal Nehru Port will open its fourth container terminal this week. (DNA India)
French logistics group Bolloré Logistics acquired majority control of Danish freight forwarder Global Solutions. (The Loadstar)
Private equity group Leonard Green & Partners bought packaging machinery manufacturer ProMach. (Business Journals)
Parcel volume at U.K. delivery company Hermes expanded 12% year-over-year during the holiday peak season. (Motor Transport)
Colombian authorities seized 185 kilos of cocaine and arrested 10 suspected drug smugglers aboard a Hapag-Lloyd AG container ship. (Splash 14/7)
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
January 31, 2018 07:13 ET (12:13 GMT)