US Manufacturing Sector Drops for 6th Month in a Row – April Report

“US Manufacturing Sector fell to a three-year low in April, as new orders increased slightly and employment recovered, The Institute for Supply Management, Arizona, USA, said on Monday that its manufacturing PMI reading was 47.1 in April which was 46.3 in March, though it was the lowest reading since May 2020. 

US Manufacturing Sector fell to a three-year low in April, as new orders increased slightly and employment recovered, but activity remained weak during higher borrowing costs and rigid credit, raising the risk of a recession in 2023.

Also Read, General Motors Halts Bolt Production to Accelerate Latest EV Models

The Institute for Supply Management, Arizona, USA, said on Monday that its manufacturing PMI reading was 47.1 in April which was 46.3 in March, though it was the lowest reading since May 2020. Reuters polled economists, who predicted the index would rise to 46.8.

The Federal Reserve’s fastest interest rate hike campaign since the 1980s is weighing on the sector, which accounts for 11.3% of the economy.

The PMI stayed below the 50-point threshold for the sixth straight month, showing manufacturing contraction. 

Following the recent financial market turmoil, banks have tightened lending. Additionally, spending has shifted away from goods, typically purchased on credit, and towards services.

Businesses are reducing restocking in preparation for lower demand later this year. According to government data released last week, private inventory investment dropped in the first quarter. This decline marks the first time since the third quarter of 2021. Corporate spending on equipment fell for the second quarter in a row. This decline played a role in limiting economic growth to 1.1% last quarter.

Despite easing inflation, underlying pressures on prices persist at levels that are not in line with the Fed’s 2% target. One major contributor to this is the tightness in the labor market.

The index of factory employment in the survey rose to 50.2 the previous month from 46.9 in March. Manufacturing payrolls have essentially stalled in the government’s closely monitored employment report, posting modest decreases in February and March.

General Motors Halts Bolt Production to Accelerate Latest EV Models

General Motors aims to produce 70,000 Bolt models in 2023. The company plans to sell over 400,000 EVs in North America from early 2022 through mid-next year.”

In an announcement, General Motors CEO Mar Barra said the company plans to stop production of its electric Chevrolet Bolt models by the end of 2023.

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The CEO announced that they would refurbish a suburban Detroit plant. The plant has been producing Chevy Bolts since 2016. The company will prepare it for the production of electric Chevy Silverado and GMC Sierra trucks scheduled for next year.

General Motors aims to produce 70,000 Bolt models in 2023. The company plans to sell over 400,000 EVs in North America from early 2022 through mid-next year.

General Motors pushed the production of Bolt ahead of the Tesla Model 3 in 2016. Bolt and Tesla were thought to be the first long-range electric vehicles (EVs) for mainstream drivers. Their prices start at around $35,000.

But Bolt models never stood on sales expectations of the company, as EV sales remained very low against Tesla. The Bolt also had a hitch recently, as General Motors recalled all of the bolts ever produced because of an issue with a supplier-related battery that used to catch several fires.

“When the Chevrolet Bolt EV launched, it was a huge technical achievement and the first affordable EV, which set in motion GM’s all-electric future,” Chevy spokesman Cody Williams said in a statement. Chevrolet will launch several new EVs later this year based on the Ultium platform in key segments, including the Silverado EV, Blazer EV, and Equinox EV.”

GM anticipates launching its upcoming electric vehicles more quickly than it has Hummer and Cadillac Lyriq models. The Hummer and Cadillac Lyriq models have been rolling out at a slow pace compared to their traditional vehicles.

Linton Crystal will Manufacture Solar Panel Equipment in USA

“Linton will produce solar silicon manufacturing equipment in the USA, and is looking forward to establishing a factory in America in Q2 2023.”

Linton Crystal Technologies, a NY-based manufacturing company has been doing wonders in manufacturing for years. The company launched as wire saw manufacturer Hamco in 1952 in Rochester. With a series of acquisitions, Linton became Kayex, a manufacturer of CZ crystal pullers. 

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Since 2013 Linton has been the sole owner of Kayex Technology. Linton also continues to bring revolutionary machine designs to the world. It holds multiple patents, with others under the application.

In an announcement, the company said it will produce solar silicon manufacturing equipment in the USA. It is looking forward to establishing a factory in America in Q2 2023.

Linton Crystal Technologies manufactures crystal-processing equipment and silicon-growing and has earlier worked with Dalian Linton NC Machine Co. Ltd. in China to manufacture its equipment.

Todd Barnum, president and CEO of Linton Crystal Technologies, said, “We’ve been working on this plan for a while now and are looking forward to reshoring manufacturing to the United States. As a U.S. company with Chinese ownership, Linton Technologies Group, the geopolitical issues have been difficult to navigate. Our company used to manufacture in Rochester and we’re eager to get back to the United States.”

Linton Crystal Technologies will bring a manufacturing center to build and show the full-line equipment.

This comprises Czochralski (CZ) furnaces for monocrystalline silicon ingots, both solar grade and semiconductor, and the machines for manufacturing & producing solar wafers and ingots, including polishing equipment and wire saws. 

Linton will be the first company to bring back this technology to the USA. The initial investment of $10 million of Linton will be utilized to add a new facility, establish a demonstration line, and make 1 to 2 GW of production capacity. This will help in growing the company’s workforce.

Largest manufacturing hubs in the world

What is a manufacturing hub?

A manufacturing hub is a geographic region that is home to a concentration of manufacturing companies and facilities. These hubs are often characterized by their strong economic and industrial base, as well as a skilled and specialized workforce.

There are many different manufacturing hubs located around the world, each with its own unique strengths and capabilities. Manufacturing hubs are regions or cities that are known for their high concentration of manufacturing facilities and industries. These hubs are important centers of economic activity and often contribute significantly to a country’s gross domestic product (GDP). Many manufacturing hubs are located in developing countries, where labor and land are often cheaper compared to developed countries.

 

Here are five of the largest manufacturing hubs in the world:

China: China is perhaps the most well-known manufacturing hub in the world. It is home to a vast number of factories that produce a wide range of goods, from electronics and appliances to clothing and toys. China’s low labor costs and vast supply chain make it an attractive location for companies looking to produce goods at a lower cost. China is the world’s largest manufacturing hub, with a GDP of more than $14 trillion in 2021. The country is known for its cheap labor and vast supply of raw materials, which have made it a popular destination for manufacturing companies. China’s manufacturing industry is diverse and includes a wide range of products, including electronics, textiles, and machinery. The Pearl River Delta, located in the south of China, is one of the country’s most important manufacturing regions, with a large concentration of factories and industries.

United States: The United States is the second-largest manufacturing hub in the world, with a GDP of more than $21 trillion in 2021. The United States is home to a number of important manufacturing hubs, including the Midwest and the Southeast. These regions are home to a range of industries, including automotive, aerospace, and heavy machinery. The United States has a strong infrastructure and a highly skilled workforce, making it an attractive location for manufacturers. The country’s manufacturing industry is diverse and includes a wide range of products, including automobiles, aerospace, and pharmaceuticals. The Midwest region of the United States is known for its manufacturing hub, with states like Michigan, Ohio, and Indiana being home to many of the country’s automotive factories.

Japan: Japan is the third-largest manufacturing hub in the world, with a GDP of more than $5 trillion in 2021. The country is known for its advanced technology and high-quality products, including electronics, automobiles, and machinery. The Kanto region, which includes Tokyo and Yokohama, is Japan’s main manufacturing hub. Japan is home to a number of globally recognized brands, including Toyota, Honda, and Sony. The country is known for its advanced manufacturing techniques and high-quality products, and it is a leader in the automotive and electronics industries.

Germany: Germany is the fourth-largest manufacturing hub in the world, with a GDP of more than $4 trillion in 2021. The country is known for its advanced engineering and high-quality products, including automobiles, machinery, and chemicals. The Ruhr region, located in western Germany, is the country’s main manufacturing hub. Germany is home to a number of leading manufacturing companies, including Siemens and Bosch. The country is known for its advanced technology and high-quality products, and it has a long history of innovation in the manufacturing industry.

South Korea: South Korea is the fifth-largest manufacturing hub in the world, with a GDP of more than $2 trillion in 2021. The country is known for its advanced technology and high-quality products, including electronics, automobiles, and machinery. The Gyeongsang region, located in the southeast of South Korea, is the country’s main manufacturing hub.

 

Other manufacturing hubs

In addition to these five countries, there are many other manufacturing hubs around the world, including Taiwan, India, and Brazil. These hubs are important centers of economic activity and contribute significantly to the global economy.

However, the rise of manufacturing hubs in developing countries has also led to concerns about labor practices and environmental impacts. Many companies have been criticized for exploiting cheap labor and not properly addressing environmental concerns in these countries. As a result, there has been a push for more responsible and sustainable manufacturing practices in these regions.

Manufacturing hubs play a vital role in the global economy, as they provide the goods and products that are needed to support the needs of consumers around the world. These hubs are often characterized by their strong economic and industrial base, as well as a skilled and specialized workforce. Overall, the world’s largest manufacturing hubs play a crucial role in the global economy and contribute significantly to the production of a wide range of products. However, it is important to ensure that these hubs are operating in a responsible and sustainable manner.

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US Legislation has passed CHIPS Act and is preparing semiconductor bill to become law

The United States Legislation is taking a new step where they are planning to clear its last major hurdle by boosting US chip production. The Senate has passed the bill to boost US chip manufacturing.

 

The Bill

 

CNBC reported, “The bill, known as the CHIPS-plus or Chips and Science Act, passed in a 64-33 vote. It will now head to the House, where lawmakers hope to pass it and send it to the White House for President Joe Biden’s signature before Congress leaves town in early August.” House Speaker Nancy Pelosi, D-Calif., said the chip bill “is a major victory for American families and the American economy” when it passed a key Senate vote earlier in July.

 

The production

 

CNBC has also talked about the production of the Chips by various companies producing computer chips. They said, “The package includes more than $52 billion for U.S. companies producing computer chips, as well as tax credits to encourage investment in chip manufacturing. It also provides funding to spur the innovation and development of other U.S. technologies.”

 

Benefit for chips production companies

 

According to Engadget, “Earlier approaches drew objections from both sides of Congress. Republicans were concerned the reconciliation bill would include unrelated climate, health and tax elements. They also said it risked funding Chinese manufacturing. Independent Senator Bernie Sanders, meanwhile, has expressed concerns the bill might reward chip manufacturers already rolling in cash, and was the only non-Republican in the Senate to vote against it.

 

The CHIPS and Science Act isn’t expected to affect production in the short term. It will take companies years to build new factories and otherwise upgrade facilities to tackle chip shortages and improve manufacturing independence. If things play out as its supporters imagine, however, CHIPS will hopefully decrease the severity of future supply chain crunches.”

Why will Koch Industries Continue Operations in Russia Despite Such Turmoil?

Koch Industries, the conglomerate run by billionaire Charles Koch, is planning to stay in Russia even as hundreds of Western companies have scaled back operations there following the invasion of Ukraine. The company will continue operations in Russia despite several turmoil.

 

Continue Operations in Russia

 

In a statement, Koch Industries announced its Guardian Industries subsidiary will continue operations in Russia. The company will continue its operations with two glass manufacturing facilities in Russia that employ about 600 people. “While Guardian’s business in Russia is a very small part of Koch, we will not walk away from our employees there or hand over these manufacturing facilities to the Russian government so it can operate and benefit from them,” Koch Industries President Dave Robertson said in the statement. “Doing so would only put our employees there at greater risk and do more harm than good.”

Beyond the two factories, Koch Industries said it employs 15 people in Russia but has no other physical assets in the country. Charles Koch has been a frequent supporter of the Republican party. Senate Democrat leaders chastised the company for its decision and called on Koch Industries to immediately suspend its operations in Russia.

 

Generating Profits ahead of Democracy

 

“Koch Industries is shamefully continuing to do business in Putin’s Russia and putting their profits ahead of defending democracy,” said Senate Majority Leader Chuck Schumer and Senator Ron Wyden, in a joint statement. “As the democracies of the world make huge sacrifices to punish Russia for Putin’s illegal and vicious invasion of Ukraine, Koch Industries continues to profit off of Putin’s regime.”

The announcement came on the same day that Ukraine’s President Volodymyr Zelensky called on America, including business leaders, to do more during what is the “darkest time” for his country.

 

Industries Pulling out of Russia

 

“All American companies must leave Russia from their market, leave their market immediately, because it is flooded with our blood,” Zelensky said during his address to Congress. Koch Industries said it is complying with all sanctions, laws and regulations within all countries it operates in. The company condemned Russia for its invasion of Ukraine.

“The horrific and abhorrent aggression against Ukraine is an affront to humanity,” Robertson said. Koch Industries further added that it has provided financial assistance to employees and their families from Ukraine and humanitarian aid to those impacted in neighboring countries.

 

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