Manufacturing Turns a Corner
At last, some good news on the manufacturing front. Last year, although the country's economy was humming along pretty smoothly, all was not well with the manufacturing sector. Much of it was in a downright recession as a result of the trade war with China and slowing global economic growth. Well, it looks like things are looking up as the latest indicators from the Philadelphia and New York Federal Reserve showed a sharp rebound that far exceeded expectations. Still, a few troubling signs remain. Industrial production contracted by 0.3% and manufacturing jobs fell by 12,000, mostly due to a decline in motor vehicles and parts. Boeing's continuing problems are also still weighing on the manufacturing index which fell 0.1%.
Companies Not Raising Wages to Fill Record Job Openings
The jobs market is tight to the point where companies are saying it's never been harder to find qualified workers. A recent survey from job placement firm Manpower Group finds that nearly 7 in 10 employers reported talent shortages last year. This is the worst level ever recorded, three times higher than a decade ago, and a jump of 17 percentage points from 2018. The Labor Department also announced that there are 670,000 more job openings than potential unemployed workers to fill them. The problem is not limited to the U.S. with Manpower's global survey finding Finland, Poland, Hungary, Hong Kong, Croatia, Greece, Taiwan, Romania and Japan all experiencing acute talent shortages. Still, companies aren't shelling out more dollars in hopes of attracting their ideal hires, with wages growing only 3% annually, well behind the historical norm.
Things at Boeing Go from Worse to Worser
Are we sure a scorned witch didn't put a hex on Boeing because the beleaguered planemaker and America's largest exporter can't seem to catch a break -- literally. In this case we're talking $100 million in annual tax breaks that the state of Washington (Boeing's manufacturing hub) is rescinding. Here's the rub. The United States and Boeing called out arch-nemesis Airbus for receiving billions in so-called launch aid from European countries as it developed new aircraft. But when you point a finger, three fingers point back at you. European officials and Airbus hit back that Boeing had received illegal subsidies from Washington. The World Trade Organization upheld the American complaint and imposed tariffs on $7.5 billion worth of European imports in response to the aid to Airbus. Now, in hopes of fending off retaliatory tariffs and deflect Airbus's complaint, Washington state really has no choice but to begrudgingly cut off subsidies to Boeing.
Facing Losses, Airbus Slashes Jobs
Considering that the airplane market is controlled by a duopoly, you'd assume that Boeing's unending struggles would be Airbus's gain, but that's not the case. The French manufacturer has been dealing with its own challenges, specifically, a loss of €1.36 billion ($1.47 billion) last year due mostly to bribery and corruption charges in which it had to write billion dollar settlement checks to France, the U.K., and the U.S. And while Airbus reported record deliveries in 2019, the company lost some €1.2 billion due to problems with its A400M military transport program and €221 million because the German government suspended export licenses to Saudi Arabia. In a bid to shore up its bottom line, Airbus plans to cut more than 2,300 jobs at its defense and space division, spreading the cuts across several countries.
Aerojet Wins 'Star Wars' Project
Knocking a missile out of the sky has been likened to stopping a bullet with another bullet. If you’ll remember, President Regan proposed a similar defense project, popularly dubbed 'Star Wars,' back during the Cold War. Well, now Aerojet Rocketdyne got some cash to try and make the seemingly impossible happen. The aerospace and defense company signed a contract with the U.S. Defense Advanced Research Projects Agency (DARPA) to develop high-speed maneuverable vehicle technology that would intercept incoming missiles. DARPA has actually been working on a "hypersonic defense interceptor" program called Glide Breaker since 2018, and the $19.6 million deal with Aerojet will see the company engineer “enabling technologies" that will, fingers crossed, make the long-fabled defense project a reality.
Need more Weekly Roundup in your life? Last week's is an oldie but goodie.