Day: April 17, 2017

A state-backed newspaper in the United Arab Emirates that was bought by an Emirati who oversees the English soccer club Manchester City is undergoing layoffs, those with knowledge of the firings said Monday.

They told The Associated Press that staffers at The National were informed Sunday they had been let go. They spoke to the AP on condition of anonymity for fear of repercussions.

It wasn’t clear how wide the layoffs were or what specific plans The National’s new owner had for the daily newspaper. Repeated calls to the newspaper rang unanswered Monday.

The layoffs come after months of turmoil at The National, which was founded in 2008 and staffed with top writers and editors from Western newspapers. Its owner, the state-backed firm Abu Dhabi Media, hoped it would become the Mideast’s standard for independent, hard-nosed newspapering.

But while the paper broke local stories on skyscraper fire safety and other issues, it largely stayed away from controversial topics in a country with strict laws governing speech.

International Media Investments, a subsidiary of Abu Dhabi Media Investment Corp. owned by Sheikh Mansour bin Zayed Al Nahyan of Manchester City, bought The National in November from Abu Dhabi Media. Sheikh Mansour’s media firm has a joint venture with Britain-based Sky to run the Arab satellite news channel Sky News Arabia.

In a statement, International Media Investments said: “The National is putting together its team, made of existing and new talent,” and will undergo “a digital transformation while retaining its print product.” It answered no questions from the AP about the layoffs.

Although the newspaper sale has yet to finalize, staffers had to reapply for jobs at the paper. All this comes as low global oil prices have pinched the economy of the United Arab Emirates, a federation of seven sheikhdoms on the Arabian Peninsula.

Sheikh Mansour is a member of the ruling family of Abu Dhabi, the UAE’s oil-rich capital. He also serves as a deputy prime minister and minister of presidential affairs.
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Mini motorcycle and go-kart maker Monster Moto made a big bet on U.S. manufacturing by moving assembly to this Louisiana town in 2016 from China.

But it will be a long ride before it can stamp its products “Made in USA.”

The loss of nearly one out four U.S. factories in the last two decades means parts for its bike frames and engines must be purchased in China, where the manufacturing supply chain moved years ago.

“There’s just no way to source parts in America right now,” said Monster Moto Chief Executive Alex Keechle during a tour of the company’s assembly plant. “But by planting the flag here, we believe suppliers will follow.”

Monster Moto’s experience is an example of the obstacles American companies face as they, along with President Donald Trump, try to rebuild American manufacturing. U.S. automakers and their suppliers, for example, have already invested billions in plants abroad and would face an expensive and time-consuming transition to buy thousands of American-made parts if President Trump’s proposed “border tax” on imported goods were to become law.

When companies reshore assembly to U.S. soil – in Monster Moto’s case that took two years to find a location and negotiate support from local and state officials – they are betting their demand will create a local supply chain that currently does not exist.

For now, finding U.S.-based suppliers “remains one of the top challenges across our supplier base,” said Cindi Marsiglio, Wal-Mart Stores Inc.’s vice president for U.S. manufacturing and sourcing. Wal-Mart partnered with Monster Moto and several other U.S. companies in a drive to increase spending on American-made goods by $250 billion by 2023 in response to consumer demand for American-made goods.

Their experience has shown Americans’ patriotic shopping habits have limits, namely when it comes to price.

Take Monster Moto’s bikes, which sell for between $249 to $749. Keechle, the CEO, says he can’t raise those prices for fear his price sensitive prospective customers will turn to less expensive rivals made in China.

“Consumers won’t give you a free pass just because you put ‘Made in USA’ on the box,” Keechle says. “You have to remain price competitive.”

Keeping a sharp eye on labor costs in their factory is one thing these U.S. Manufactures can control. They see replacing primarily lower-skilled workers on the assembly line with robots on American factory floors as the only way to produce here in a financially viable, cost-competitive way. It’s a trend that runs against the narrative candidate Donald Trump used to win the U.S. presidency.

Since taking office, Trump has continued promises to resurrect U.S. manufacturing’s bygone glory days and bring back millions of jobs. On March 31, Trump directed his administration to clamp down on countries that abuse trade rules in a bid to end to the “theft of American prosperity.”

But it’s more complicated on the ground for companies like Monster Moto.

“It’s almost as if people think you can just unplug manufacturing in one part of the world and plug it in to the U.S. and everything’s going to be fine,” said David Abney, Chief Executive Officer of package delivery company United Parcel Service Inc., which helped Monster Moto reconfigure its supply chain to bring its Chinese-made parts to Ruston.

“It’s not something that happens overnight,” he said.

A White House official said that the Trump administration’s efforts to encourage manufacturers to reshore production will be focused on cutting regulations and programs to provide new skills to manufacturing workers.

“We recognize that the manufacturing jobs that come back to America might not all look like the ones that left,” a White House official said, “and we are taking steps to ensure that the American workforce is ready for that.”

Making robots great again

In Monster Moto’s cavernous warehouse in Ruston, boxes of imported parts that are delivered at one end then become bikes on a short but industrious assembly line of a few dozen workers.

A solitary, long-bearded worker by the name of Billy Mahaffey fires up the bikes to test their engine and brakes before a small group of workers puts them in boxes declaring: “Assembled in the USA.”

Helped by that label, Monster Moto has experienced a recent boom in demand from major customers that include Wal-Mart. The company expects to double production to 80,000 units and increase its assembly workers — who make $13 to $15 an hour — to 100 from around 40 in 2017.

The most likely components Monster Moto could produce in America first are black, welded-metal frames for bikes and go-karts, but they would have to automate production because human welders would be too expensive.

“We can’t just blow up our cost structure,” said Monster Moto President Rick Sukkar. “The only way to make it work in America is with robotics.”

The same principle applies for much larger manufacturers, such as automotive supplier Delphi Automotive PLC’s.

Chief Financial Officer Joe Massaro told analysts in February that 90 percent of the company’s hourly workforce is in “best-cost countries.”

When asked about shifting production to the United States from Mexico, Massaro said depending on what happens to trade rules “it would have to be much more of the sort of the automated type manufacturing operations just given… the labor differential there.”

That trend is already showing up in data compiled by Economic Policy Institute, a Washington-based think tank.

According to senior economist Rob Scott, not only did America lose 85,000 factories, or 23.5 percent of the total, from 1997 to 2014, but the average number of workers in a U.S. factory declined 14 percent to 44 in 2014 from 1997. According to Scott, much of the decline in workers was due to automation.

“We’re going to see more automation in this country because it makes good sense economically for every company,” said Hal Sirkin, a managing director at the Boston Consulting Group. “You can spend a lot of time bemoaning it, but that’s not going to change.”

Manufacturers say automated production requires fewer, but more skilled workers such as robot programmers and operators.

The National Association of Manufacturers (NAM) estimates because of the “skills gap” there are 350,000 unfilled manufacturing jobs today in a sector that employs over 12 million people.

In Ruston, Mayor Ronny Walker bet on Monster Moto by guaranteeing the company’s lease because he wants to diversify the city’s economy, and envisions suppliers setting up alongside Monster Moto’s assembly plant.

“Could it take a long time to bring manufacturing back here?

Sure,” he says. “But you have to start somewhere.”
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China’s economic recovery is gaining traction, with growth rising to its fastest pace in over a year in January-March.

The 6.9 percent annual pace of expansion for the world’s second-largest economy, reported Monday, surpassed economists’ forecasts and was an improvement from 6.8 percent growth in the last quarter of 2016.

Growth last was that strong in July-September of 2015.

Analysts said government spending and a property boom spurred by easy credit were the main factors helping to driving stronger demand.

China saw its slowest growth in nearly three decades in 2016, at 6.7 percent. The official full-year economic growth target for 2017 is 6.5 percent.

“Currently, China’s economy is demonstrating good signs of pickup in growth, overall price stability, expansion in employment and improvement in the international balance of payments,” Mao Shengyong, a spokesman for the National Bureau of Statistics, told reporters in Beijing.

Fears of being dragged into a trade and currency war with the U.S. have abated after U.S. President Donald Trump toned down his previously antagonistic comments against Beijing.

A summit earlier this month with Chinese President Xi Jinping ended calmly, and the U.S. Treasury Department did not label China a currency manipulator in its latest assessment.

During the first quarter, investment in fixed assets such as factories expanded 9.2 percent from a year earlier, while retail sales grew 10 percent. Industrial production rose 6.8 percent, including a stronger-than- expected 7.6 percent year-on-year gain in March.

Although exports have also shown sharp improvement, strong lending and investment figures suggest Beijing is relying on its traditional strategy of powering growth through government stimulus. China’s leaders have been trying to shift to an approach based more on consumer demand but tend to open the spending and credit taps at times when growth appears to be slowing too much.

“The question we need to ask is whether this investment-led model is sustainable as the authorities have trouble taming credit,” said Raymond Yeung and David Qu, economists at ANZ.

The latest figures indicate China’s economy is on track to meet its official growth target — a good sign for China’s communist leaders, who don’t like surprises and are preparing for a twice-a-decade party congress in the autumn to appoint new leaders.

“The 6.5 percent target this year, you could say it’s more important than ever, because of the political reshuffle later this year,” said Amy Zhuang, chief Asia analyst at Nordea Markets. “At least being able to maintain the stability in growth is very, very important for Beijing.”

On a quarter-to-quarter basis, which is how other major economies report data, the economy lost steam, expanding just 1.3 percent. That’s slower than 1.7 percent in the fourth quarter of 2016.

The economists at ANZ said such figures should be viewed cautiously because they might reflect changes in how the government made adjustments for seasonal factors.

Economists say they expect the boost from the government’s policies and the property boom to persist for a few more months before fading later in the year.

Real estate plays an outsize role in fueling growth in the wider Chinese economy by spurring knock-on demand in the manufacturing and service sectors.

House prices will likely start cooling this year as tighter restrictions finally kick in, but Beijing will probably take steps to offset that decline with more stimulus to meet its annual growth target, Zhuang said.
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Each day, millions of Americans drink purified water and other beverages from disposable plastic bottles. More than 60 million of those bottles are dumped in landfills or burned in incinerators daily. But a couple of American entrepreneurs are putting some of them to good use by recycling them into shoes.
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