AAPL Apple Inc

By Paul Page 

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President Donald Trump is pledging big changes in Apple Inc.'s supply chain -- "big, big, big" changes. The president told The Wall Street Journal in an interview that Apple Chief Executive Tim Cook has committed to build three big plants in the U.S., the WSJ's Tripp Mickle and Peter Nicholas report, a dramatic upgrade on Apple's plan for U.S. work that would help fulfill his administration's economic goal of reviving American manufacturing. Mr. Trump said Mr. Cook promised him Apple would build "three big plants, beautiful plants," but he wouldn't elaborate on where and when those factories would be built. Apple, which declined to comment, has said it would create a $1 billion fund to invest in U.S. companies that do advanced manufacturing. Apple now depends on contract manufacturing, most of it in China and a small share at three sites in the U.S. In the interview, Mr. Trump said people in states without jobs will have to move to states like Wisconsin, Iowa and Colorado that are adding "these massive plants."

The flow of vehicles across the U.S.-Mexico border is changing, but not in the way the White House envisioned. New data shows production of light vehicles in Mexico rose 16% in the first half of this year, the WSJ's Mike Colias and Chester Dawson report, just as tepid sales of sedans held down production in the U.S. and Canada. The shift in car sales, with sport-utility vehicles growing in popularity, has sent the value of light-vehicle imports from Mexico to the U.S. soaring by 40% through May this year. President Trump has launched several attacks on Mexican car imports, but one in five cars built in the North America now comes from Mexico, the highest share in nearly a decade. Consumers are responding to market forces, turning to pickups and SUVs amid low gas prices, illustrating the challenge facing the administration as it seeks to push North America's automotive supply chains in a different direction.

A battle is breaking out between customers and suppliers in the world's high value, high stakes aviation supply chains. Boeing Co. and Airbus SE moves to grab a bigger piece of the aftermarket business for aircraft parts are triggering a supplier backlash, the WSJ's Thomas Gryta reports, with United Technologies Corp. warning of higher prices for jet engines and other parts if the aircraft manufacturers push into its business territory. The two sides are wrestling over changing business models and the search by Airbus and Boeing for new, predictable revenue streams in a volatile aircraft market. Engine makers like United Technologies' Pratt & Whitney unit, General Electric Co. and Rolls-Royce Holdings PLC typically sell their goods with little or no profit but make up the money by selling decades of servicing and parts. The jet makers envy that long-term tie to customers, but getting into that business may carry big upfront costs.

SUPPLY CHAIN STRATEGIES

New technology is fracturing the field for suppliers for smartphone display panels. LG Display Co. plans to spend $7 billion to churn out more smaller-size organic light-emitting-diode panels, the WSJ's Eun-Young Jeong reports, a challenged to Samsung Electronics Co.'s dominance in the market for the OLED panels. The bulk of smartphones use LCD displays, but premium smartphones are switching to OLED, and Apple will use the thinner, more flexible part for its upcoming iPhone 8. It's a sign that the high stakes and the high concentration in some electronics lines -- the OLED-making Samsung Display unit holds a 97.1% share of the market by revenue -- is drawing more competition among suppliers. Research firm IHS Markit projects the global OLED market to reach $25.2 billion this year, up 63% from last year. That growth is reshuffling some manufacturing, with LG shifting some factory work to accommodate the new market.

A new focus on cargo is providing an important boost to Cincinnati/Northern Kentucky Airport, although to be fair the mini-horses have also helped. Authorities at the airport have completed a transformation of the site since Delta Air Lines scaled back its hub operations there, the WSJ's Shibani Mahtani reports, shrinking its passenger terminal space and committing more of its 7,500-acre property to sprawling logistics operations, including Deutsche Post AG's DHL and Amazon.com Inc. Along with a focus on smaller, discount passenger operations and more on-site services, the airport has overhauled its business, with more than half the landed-weight of aircraft now coming from cargo operations. The passenger side includes unusual features like miniature horses that visit the terminal, but the big gain has come from logistics, including Amazon's decision this year to spend $1.5 billion to turn the site into an air hub.

QUOTABLE

IN OTHER NEWS

Canadian Prime Minister Justin Trudeau, setting up a dispute with the U.S., says it is "absolutely essential" a revised North American trade pact includes a dispute-resolution panel. (WSJ)

Amazon will hold a job fair in August to fill 50,000 jobs, mostly in its U.S. warehouses. (WSJ)

Caterpillar Inc. signaled cautious optimism about the global economy as it reported growing second-quarter sales and stronger demand for its construction equipment. (WSJ)

Toyota Motor Corp. says it is near a major breakthrough in electric-car batteries that would allow for smaller power units that can hold a charge longer. (WSJ)

General Motors Co. expects to cut elevated auto inventories to normal levels by year end after reporting reduced second-quarter profits. (WSJ)

Luxury-goods retailer Michael Kors will buy shoe maker Jimmy Choo for $1.17 billion and says it plans more acquisitions. (WSJ)

A court approved Payless ShoeSource Inc.'s reorganization plan, moving the discount shoe retailer closer to exiting bankruptcy protection. (WSJ)

German car parts maker ZF Friedrichshafen AG recently held takeover talks with Wabco Holdings Inc. before they fell apart. (WSJ)

Barnes & Noble Inc. is open to discussing a hedge fund's call to put itself up for sale. (WSJ)

McDonald's Corp. boosted its second-quarter profits as it slashed prices to lure customers in a fast-food "market share fight." (WSJ)

Chinese e-commerce company JD.com abruptly severed links with courier group Tiantian in the latest spat in the country's booming logistics sector. (Financial Times)

A U.K. government official says corporate bosses could be jailed for labor abuses and companies could be fined for violations by smaller firms down the supply chain. (The Guardian)

Werner Enterprises Inc. reported a 27% boost in second-quarter profit on improved truckload efficiency and growing dedicated services revenue. (American Shipper)

Roadrunner Transportation Systems Inc. closed on a five-year, $292 million financing to help the struggling trucker's recapitalization efforts. (DC Velocity)

British supermarket giant Tesco PLC launched nationwide same-day grocery delivery. (Logistics Manager)

The Georgia Ports Authority will buy six gantry cranes for $73 million to handle the bigger container ships at the Port of Savannah. (Atlanta Journal-Constitution)

Ultra-large container ships will double their share of the Asia-Europe trade lane within the next 18 months, says SeaIntel. (Splash 24/7)

Dubai-based DP World's container volumes at its terminals around the world grew 10.7% in the second quarter. (Arabian Business World)

Ship-charter company Diana Containerships Inc. swung to a $36.5 million second-quarter profit. (Journal of Commerce)

Trade critics in the U.K. are warning a new pact with the U.S. would bring in a flood of chlorine-washed chickens. (MarketWatch)

ABOUT US

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 paul.page@wsj.com

(END) Dow Jones Newswires

July 26, 2017 07:09 ET (11:09 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.