Category: Economy and Policy

NORTH CHARLESTON, S.C., Feb 1 (Reuters) – Boeing Co is counting on a new kind of worker to help it reach a long-coveted target of rolling out 14 787 Dreamliners from its factories each month: half human, half robot.

The world’s largest planemaker is equipping mechanics with exoskeletons, similar to ones that allow cameramen to quickly navigate the sidelines of NFL football games, to increase their strength and speed. The high-tech suits also help reduce fatigue on repetitive tasks, such as overhead drilling.

“You have the capability of a robot and the capability of a human being melded together,” Christopher Reid, a Boeing associate technical fellow who previously designed NASA spacesuits, told Reuters during a factory tour.

The new technology is an example a broader shift in the industry’s focus towards production, as planemakers face the task of making good on a record order boom. After a decade in which Boeing and Airbus generated massive orders fueled by the rise of China and emerging markets, the main battleground is shifting towards production strategy rather than market share.

At twin Dreamliner factories in South Carolina and Washington state, Boeing also plans to soon deploy Bluetooth-enabled ‘smart’ wrenches that signal if machinists apply the correct torque to a nut, and has introduced new self-driving work platforms to shave time off aircraft assembly, according to people familiar with the technologies.

Such technology investments will help the U.S. manufacturer accelerate 787 Dreamliner production to 14 a month from 12. Chief Executive officer Dennis Muilenburg announced the preliminary rate change on Wednesday, and said he expects to complete the production increase in the second quarter.

Building the carbon composite Dreamliner at the new rate, first reported by Reuters, is central to Boeing’s efforts to raise profit margins and claw back deferred production costs as it competes with arch-rival Airbus SE in a crowded but lucrative widebody market.

Boeing rolls out a new 787 with a minimum list price of $239 million every 1.75 days. At ‘rate 14,’ that new pace drops to 1.5 days to make a new Dreamliner.

At today’s rate, Boeing is reducing the 787 $23 billion in deferred production costs by $16 million per aircraft, Canaccord Genuity analyst Ken Herbert said. “That number will clearly improve at the new rate.”

MELDING HUMANS WITH ROBOTS

Boeing estimates the exoskeletons, which cost about $4,500-$7,000 apiece, have sped up work tasks in test groups of mechanics in South Carolina, though Boeing declined to share data. If trials continue to show improved safety and productivity, Boeing says it wants to deploy them to thousands of workers across the company over the next two years.

In recent weeks, Boeing has also introduced custom-built, self-driving work platforms similar to scaffolds that hug an airframe so mechanics can work as a jetliner pulses along the assembly line. Before, work stations had to be moved with fork lifts.

Boeing’s 787 mostly competes against the A350, of which Airbus builds 10 a month. These widebody planes represent hundreds of billions of dollars in sales over 20 years.

Both are modernizing their factories. But on widebody jets, Boeing’s higher production rate gives it the advantage to drive down costs across its supply chain and sell more of its pricier Dreamliner variants, like the newest 787-10.

In the fourth quarter, Boeing said its operating margin on commercial aircraft increased to 15.6 percent from 11.6 percent from a year ago, partially driven by higher margins on the 787 Dreamliner widebody.

INNOVATION AND INSPECTION

In South Carolina, engineers in a tiny workstation known as an “innovation cell” huddle around computers, 3D printers and a virtual reality system to help mechanics test out new tools without snarling the factory flow.

Before the cells, Boeing said workers had no formal place to test out new ideas or complain about niggling problems, leaving them to fester for years in some cases.

Boeing said three innovation cells in South Carolina have saved millions of dollars in costs since 2017 with a raft of time-saving tools, such as a 3D-printed curved ruler. The ruler alone cut six hours off the time it took a mechanic to hand-measure all the placards mounted above the seats inside on section of a 787.

In Washington state, it has opened innovation cells at its widebody plant in Everett and its 737 plant in Renton, also set for 2019 rate increase.

The new time-saving technology is aimed to help cut back on the cost of inspections that Boeing says have been made obsolete due to the new digital technology.

“Don’t inspect things twice,” Mark Stockton, engineering director for Boeing South Carolina, told Reuters during the factory tour. “Inspect things once and validate things once.”

Boeing said it did not expect that these changes in inspections will result in the loss of jobs.

But a union official asked about the strategy warned it carries risks such as higher injury rates, or potentially delayed aircraft deliveries, if last-minute problems are discovered.

“Removing thousands of inspections per airplane will negatively impact the manufacturing process and push defects down line,” IAM 751 spokeswoman Connie Kelliher said by email.

HOUSTON (Reuters) – U.S. oil and natural gas producer Chevron Corp on Friday reported quarterly earnings that topped analysts’ estimates on higher prices and production, sending shares higher in premarket trading.

Results for the San Ramon, California, company reflected higher oil and gas production with output for the quarter up 156,000 barrels per day from a year earlier. Prices paid for its crude rose to $59 a barrel in the quarter, from $57 a year earlier.

The company reported per share profit of $1.97 a share compared to analysts’ mean forecast of $1.92 a share, according to Refinitiv. Shares were up 2 percent at $116.88 before the market opened.

(Reuters) – Teva Pharmaceutical Industries said a European Medicines Agency (EMA) panel on Friday recommended approving migraine treatment Ajovy, a drug that the company has been counting on to revive its fortune.

Ajovy was approved by the U.S. Food and Drug Administration (FDA) in September last year and the company had said it was seeing “a very strong launch” of the treatment.

“A final decision is expected in the first half of 2019,” Teva said.

Ajovy had suffered a setback in October when Express Scripts Holding Co, one of the largest U.S. prescription benefits managers, said it will cover new migraine drugs from Eli Lilly and Amgen Inc but not from Teva.

While final approvals are up to the European Commission, it generally follows the CHMP’s recommendation and endorses them within a couple of months.

(This version of the story corrects a typo in headline))

Feb 1 (Reuters) – Asset manager Intermediate Capital Group Plc on Friday named Vijay Bharadia as its chief financial officer, replacing Philip Keller.

Bharadia, who has worked as International CFO for Blackstone Group LP for the past decade, will stand for election as a director of Intermediate Capital at the company’s annual shareholder meeting in July. (Reporting by Uday Sampath in Bengaluru)

BERLIN (Reuters) – German Chancellor Angela Merkel took another step in her stage-managed exit from politics on Friday, posting a video to announce the closure of her Facebook (FB.O) page after stepping down as head of her party.

Merkel, chancellor of Europe’s largest economy since 2005, decided last year after a series of election setbacks to relinquish leadership of the Christian Democratic Union (CDU) and not run for another term.

In the video, Merkel thanked her 2.5 million followers and invited them to continue following her via the government’s official Facebook page or on Instagram, which shares pictures.

“Today is the day on which I would like to thank you for all your support of my Facebook page,” she said. “You know that I am no longer CDU president, so I will now close my Facebook page.”

For a public figure to close down a social media presence with such a large following is an unusual move, leading some to speculate that, whatever else Merkel plans for her post-chancellor life, she envisages doing so as a private citizen.

Her 13-year dominance of European politics has made her retirement a guessing game, with some expecting her to take up a senior role in the European Union or the United Nations.

Merkel has always deflected questions over her future.

Building a large social media following to serve as a valuable communications channel is arduous work.

Merkel’s following is ahead of her friend and ally French President Emmanuel Macron’s 2.3 million followers, and dwarfs Britain’s Theresa May’s 503,000.

The move could not contrast more sharply with Donald Trump, who is Merkel’s opposite in some respects and whose quick-fire tweets defined both his campaign and his presidency.

Merkel’s page often went days without an update.

Her farewell video was flooded with hundreds of comments in many languages within minutes of going online.

Many of them referenced the 2015 decision to open Germany’s borders to hundreds of thousands of Syrian war refugees – a move that came to define her chancellorship.

“I don’t support you! What you did and do in Europe and with your people is shameful,” wrote Maria Balogh in Hungarian.

“You were my candidate for president,” wrote Martha Reardon Berwick in English. “I only wish you were here in the US!”

(Reuters) – U.S. stock index futures pared losses on Friday after stronger-than-expected U.S. job growth in January pointed to underlying strength in the economy.

At 8:34 a.m. ET, Dow e-minis were up 46 points, or 0.18 percent. S&P 500 e-minis were up 0.5 points, or 0.02 percent and Nasdaq 100 e-minis were down 31.75 points, or 0.46 percent.

WASHINGTON (Reuters) – Any non-U.S. entities purchasing petroleum and petroleum products from Petróleos de Venezuela SA in transactions that involve any U.S. persons, the U.S. financial system or U.S. brokers must be wound down by April 28, the U.S. Treasury Department said in a notice posted early on Friday.

Americans who work for non-U.S. companies located outside of the United States and Venezuela have until March 29 to conduct “certain maintenance or wind-down transactions,” according to the notice dated Jan. 31 and posted on the department’s website overnight.

The department’s Office of Foreign Assets Control also addressed other issues related to looming U.S. sanctions on Caracas’ state-run oil company aimed at putting pressure on President Nicolas Maduro who the Trump administration seeks to oust from power.

The notice offers more details about transactions that are allowed and prohibited, and offers guidelines on bondholders’ rights regarding U.S. refiner Citgo Petroleum as well as details on what constitutes “maintenance” transactions.

U.S. officials imposed sanctions on PDVSA this week, a move Maduro has called illegal.

The global oil industry has since sought to sort out the large-scale sanctions, which froze the assets of the company and require U.S. firms to pay for oil using accounts controlled by the country’s opposition party head and self-proclaimed interim president, Juan Guaido.

U.S. President Donald Trump and his administration have thrown their support behind Guaido.

(This story corrects to clarify wind-down transactions in first paragraph)

HOUSTON (Reuters) – Exxon Mobil Corp on Friday reported a quarterly profit that topped analysts’ estimate on higher prices and volumes for its oil and natural gas as production rose slightly on a year-over-year basis.

The company’s fourth quarter net income fell to $6 billion, or $1.41 a share, from $8.38 billion a year ago. Analysts had forecast a $1.18 a share profit excluding one-time items, according to data from Refinitiv.

(Reuters) – Canada’s integrated oil company Imperial Oil Ltd on Friday posted a quarterly profit, driven by gains from cheap crude prices at its refining division.

Imperial, majority owned by Exxon Mobil Corp, said its net profit in the fourth quarter ended Dec. 31 was C$853 million ($649.2 million), or C$1.08 per share.

The Calgary, Alberta-based company had posted a net loss of C$137 million, or 16 Canadian cents per share, a year earlier, due to a surge in refining and oil production costs.

The company took impairment charges of C$566 million in the year-ago quarter.

($1 = 1.3140 Canadian dollars)

LONDON (Reuters) – Global shares edged down from their highest in two months on Friday as data showing shrinking factory activity in China ended a rally that took them to their best January on record.

Stocks have benefited this week from the U.S. Federal Reserve, which all but abandoned plans for raising interest rates again, and on optimism that a U.S.-China trade deal might be on the cards.

But the Caixin/Markit index of Chinese manufacturing fell to its lowest since February 2016, adding to a growing list of economic readings indicating slowing global growth.

(For an interactive version of the below chart, click here tmsnrt.rs/2Tr5cgO)

MSCI’s All Country World Index, which tracks stock markets in 47 countries, came off its highest level since Dec. 4 after its best January gain on record – up 7.79 percent on the month.

Futures indicated a timid start to trading on Wall Street.

The weak Chinese data also took MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.2 percent, after a 7.2 percent gain in January.

The Australian dollar, a barometer of investor sentiment towards China, slid as much as half a percent. China’s offshore yuan was headed for its worst day in over five months.

Although European markets opened higher, stock fell as banks reported poor earnings. The pan-European STOXX 600 index fell 0.2 percent.

Purchasing manager indexes in manufacturing for Italy and Switzerland came in below expectations, although those for Germany, France and the euro zone were in line with forecasts.

Equity markets have been relieved by a change of heart at the U.S. Federal Reserve, which signaled this week that its three-year drive to tighten monetary policy may be at an end as the outlook for the U.S. economy worsens.

The Fed held rates steady, discarded its promise of “further gradual increases” in rates and said it would be “patient” before making any further moves.

“The Fed decision should not only be supportive of risk markets, but also the weaker dollar backdrop could be extended, which should support EM assets, especially at a time when China is attempting to stimulate growth,” said Mohammed Kazmi, portfolio manager at UBP.

“The market will now turn its attention to the outcome of U.S.-China trade talks as well as the U.S. data.”

Jobs data from the United States is due at 1330 GMT.

Stocks had also gained after U.S. President Donald Trump said he would meet Chinese President Xi Jinping soon to try to seal a comprehensive trade deal.

The top U.S. negotiator at the talks reported “substantial progress” in the talks. Beijing’s trade delegation said they made “important progress”, China’s official Xinhua news agency reported.

The previously upbeat mood was also chilled somewhat by White House insistence that March 1 was a hard deadline for a deal, failure of which would lead to an increase in U.S. tariffs on Chinese goods.

“Analysts mostly remain deeply skeptical that a genuine trade deal can be done on this time frame,” economists from Commonwealth Bank of Australia said in a note.

“We are less pessimistic since these negotiations are being conducted by senior politicians, not by trade bureaucrats,” they said. “Both sides also have an incentive, and arguably a growing incentive, to get a meaningful deal done.”

The optimism supported Wall Street, where the S&P 500 ended Thursday with a gain of 0.86 percent. The Nasdaq jumped 1.37 percent after a near 11 percent rise in Facebook Inc. The Dow slipped 0.06 percent.

Over January, the S&P 500 rose 7.9 percent, its best monthly performance since late 2015 and its strongest start to a year since 1987. The Nasdaq gained 9.7 percent in the month and the Dow rose 7.2 percent.

Against a basket of currencies, the dollar was down 0.1 percent at 95.506. The euro was 0.2 percent higher at $1.14650..

The euro weakened when Bundesbank President Jens Weidmann painted an unusually bleak picture of the German economy, saying the slump would last longer than initially thought.

Gold prices hovered just short of nine-month highs, supported by the fall in bond yields and expectations for a softer dollar. Spot gold rose 0.1 percent to $1,321.03 per ounce, having touched a top of $1,326.30.

Oil prices were subdued as the China data offset signs major exporters were reducing output. U.S. crude futures were flat at $53.79 per barrel, while Brent rose 0.2 percent to $60.93. [O/R]