F Ford Motor Company

By Paul Page 

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The Saint Laurent fashion house is giving up some control over distribution in China in hopes of reaching deeper into the market. The French luxury retailer will use an agreement with a new online platform to expand in China's rapidly growing domestic market, the WSJ's Matthew Dalton reports. The brand will sell merchandise on the new joint venture platform created by Farfetch and JD.com, China's second-biggest e-commerce company, in a cautious foray into China's freewheeling internet market. That's a significant step because luxury firms have been reluctant to sell over the internet in China because of concerns that JD.com and Alibaba Group Holding Ltd. run marketplaces riddled with counterfeit goods. But Chinese consumers account for 30% of global luxury spending and are increasingly shopping at home. Saint Laurent believes an online strategy will help them reach those customers, particularly outside the big cities, without risking overexpansion of its stores.

Aluminum may not be turning into the new steel, after all. Auto makers are stepping up their use of aluminum as they look for lightweight alternatives to the heavier sheet metal in many vehicles, but the WSJ's Chester Dawson reports that search is giving way to a patchwork of materials as a fundamental part of the automotive supply chain is bent into new configurations. Aluminum has enjoyed a surge as auto engineers have shaved weight from virtually every component amid tighter emissions standards. Ford Motor Co.'s shift in 2014 to aluminum for the best-selling F-150's body panels was seen as a tipping point because sales and production volumes of Ford's truck are so high. Producers are responding, however, with moves to new materials including magnesium and carbon fiber, and steelmakers have rolled out stronger but lighter steels. That's slowed the growth of some aluminum producers, but auto parts providers like Arconic Inc. insist the drive to aluminum will continue even if the pace slows down.

Boeing Co. is taking more complete control of critical pieces of its aircraft manufacturing supply chain. The jet maker is creating a unit to develop and build aircraft avionics systems, the WSJ's Doug Cameron reports, moving more deeply into the electronics behind planes as the company expands its strategy of insourcing key technology to cut costs. The move takes Boeing further into the territory of big suppliers, following its push to get more involved in the aftermarket service and maintenance business of big engine providers. Boeing says the new avionics unit is being established in consultation with suppliers. The action sent shares in some of those suppliers into decline, however, a sign of unease over the steep changes that are underway in aerospace supply chains. Boeing is hoping to reduce costs with more vertical integration of its manufacturing, but the actions may also provide more control of production and a tighter grip on revenue from its aircraft sales.

TRANSPORTATION

Commodity-focused companies are looking stronger, although not entirely because of a turnaround in underlying business. The past year has seen mining, energy and other commodity businesses lead a surge in corporate bonds that have reached investment grade, the WSJ's Tatyana Shumsky reports, in part because those companies have slashed costs, sold assets and cleaned up balance sheets. Energy and basic materials businesses accounted for 85% of the bonds moving into to Bank of America Merrill Lynch's high-grade index, opening those companies to lower-cost borrowing. The change illustrates how swiftly the fortunes of commodity companies have turned as they focused on restraining supply and then benefited from a rebound in resource prices and a stronger global economy. Companies like natural gas exporter Cheniere Energy Partners L.P. now are looking to push more business through global distribution channels as they gain firmer financial footing.

The founder of National Air Cargo is fighting to keep his job and to keep the airline in operation. Christopher Alf, chief executive of the military transport specialist, is asking a bankruptcy court judge to dismiss calls for his ouster, the WSJ's Katy Stech reports, arguing that a series of past legal problems won't get in the way of his efforts to turn the company around. Mr. Alf's plea is part of a bankruptcy-court battle for control of one of the few independent U.S. air cargo airlines remaining in a business roiled by consolidation and changing shipping patterns. Aircraft provider Global BTG LLC is trying to wrest away the business after winning a $10 million judgment against the carrier in an aircraft-leasing dispute. The leasing company says the case is the result of a broader pattern of mismanagement, an accusation Mr. Alf says is built on unproven and irrelevant charges. National, like others tied to military contracts, is still facing diminishing business as the U.S. moves to wind down operations in the Middle East.

QUOTABLE

IN OTHER NEWS

A gauge of China's manufacturing activity fell more than expected in July, a likely sign of a slowdown in the world's second-largest economy. (WSJ)

America's largest companies are on pace to post two consecutive quarters of double-digit profit growth for the first time since 2011. (WSJ)

Manufacturing growth fueled by export demand helped push Mexico's economic growth to o.6% in the second quarter. (WSJ)

The eurozone's unemployment rate fell to its lowest level in more than eight years as the inflation rate remained low. (WSJ)

Dutch brewer Heineken NV posted higher profit in the first half of the year, helped by big growth in low-alcohol drink sales in Europe. (WSJ)

Truck drivers handling cargo at Toronto Pearson International Airport are reporting long delays amid a strike by Swissport ground crews. (Today's Trucking)

Japan's big three container shipping lines reported strongly improved results in the past quarter as they prepare to integrate their businesses. (The Loadstar)

Seaspan Corp. co-founder Gerry Wang is stepping down as chairman and chief executive of the container ship leasing business. (American Shipper)

Growing container shipping concentration is bringing carriers closer to a "nirvana of sustainable profitability," Drewry Shipping Consultants Ltd. says. (Port Technology)

The ambitious clean-air program at California ports depends on truck technology that hasn't been developed and will be expensive to implement. (Long Beach Press-Telegram)

United Parcel Service Inc. is expanding its alcohol-shipping services to include more international ordering and transport capability. (Post & Parcel)

A Pennsylvania company will ship 700,000 tons of coal to Ukraine in a deal the Trump administration says is a move to undercut Russia. (Bloomberg)

The Baltic Exchange will close its Baltex electronic trading platform for freight brokers by the end of the year. (Lloyd's List)

Net profit at Dubai-based logistics provider Aramex rose 15% in the second quarter after eliminating one-time investment costs. (Supply Chain Digital)

An unnamed group paid $62 million to buy a warehouse property in California's North San Jose area, near Silicon Valley. (Business Journals)

E-commerce growth in Germany is expected to slow in coming years as the share of consumers buying goods online plateaus. (eMarketer)

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

August 01, 2017 07:08 ET (11:08 GMT)

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