Special budget needed to hasten quantum components production

Taiwan's national team for quantum technology development is facing difficulties in manufacturing quantum dots, quantum bits, control boards and photonic quantum bits, necessitating special budgets to help remove related production barriers, according to industry sources......»»

Category: topSource: digitimesJun 24th, 2022

Learning From James Dyson

When you look back in history at some of mankind’s greatest achievements, one of the things that stands out in almost every case is that those successes came with a lot of blood, sweat and tears and an incredible amount of persistence. Often what appeared on the surface to be an “overnight success’’ actually took […] When you look back in history at some of mankind’s greatest achievements, one of the things that stands out in almost every case is that those successes came with a lot of blood, sweat and tears and an incredible amount of persistence. Often what appeared on the surface to be an “overnight success’’ actually took years to achieve. Henry Ford and his self-propelled vehicle, Walt Disney and his animated pictures, Alexander Bell and his telephone and even the Wright Brothers and their aeroplane; all were examples of people who failed many, many times before they eventually succeeded, often facing distressing financial hardship along the way. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get Our Icahn eBook! Get our entire 10-part series on Carl Icahn and other famous investors in PDF for free! Save it to your desktop, read it on your tablet or print it! Sign up below. NO SPAM EVER (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q3 2021 hedge fund letters, conferences and more But if you were one of these people and were inventing something that could be potentially momentous and change things forever, at what point would you give up after encountering multiple failures? After 10 attempts? 50? What about 1,000? You’d have to think you were on a road to nowhere if you had failed that many times. So how about 5,127 times? How does that grab you? Incredibly, that’s the number of hand-made prototypes James Dyson built over a four year period before he finally achieved success with his cyclonic vacuum cleaner. Labouring through trial and error, Dyson overcame a brutal patent abuse, endless rejections from both venture capitalists and the world’s leading appliance manufacturers whilst managing an ever expanding overdraft he didn’t extinguish until the age of forty-eight. Contrast that with today, Sir James Dyson is the UK’s fourth richest resident with a net worth of c.US$9.7 billion. Dyson struck on the idea of a cyclonic vacuum from his experience manufacturing his first product, the ‘Ballbarrow.’ Applying paint to the metal frame created havoc in the factory - excess waste and mess. Seeking a solution, Dyson asked around the trade and eventually arrived at a cyclonic separator. He recalled, ‘I found the centrifuge dust extraction principle of the cyclonic separator utterly fascinating.’ James Dyson’s recently published memoir, ‘James Dyson - Invention: A Life,’ is a tale of constant innovation, incredible challenges overcome and the deep resilience required to create one of today’s leading technology companies. One of my favourite insights from the book relates to the opportunity set afforded Dyson by the vacuum industry’s incumbent players. Hamilton Helmer labelled this power ‘Counter-Positioning’ in his best-selling book on competitive strategy, ‘7 Powers.’ The opportunity arises when a newcomer adopts a new, superior business model which the incumbent doesn’t mimic due to anticipated damage to their existing business. In the case of vacuum cleaners, the incumbents were making billions selling replacement bags to their customers. Why create a product which puts at risk that perpetual revenue stream? If there’s one thing I’ve noticed about successful business founders, it’s that there is no straight line to success. Without perseverance and resilience beyond the scope of all but the rarest of people, these businesses would die on the vine. I’ve included some of my favourite extracts below. Failure and 'Trial & Error' “This might sound boring and tedious to the outsider. I get that. But when you have set yourself an objective that, if reached, might pioneer a better solution to existing technologies and products, you become engaged, hooked and even one-track-minded. Folklore depicts invention as a flash of brilliance. That eureka moment! But it rarely is, I’m afraid. It is more about failure than ultimate success. I even thought about calling this book ‘James Dyson: Failure’, but was talked out of it because it might give the wrong impression.” “The failures began to excite me. ‘Wait a minute, that should have worked, now why didn’t it?’” “Research is about conducting experiments, accepting and even enjoying failures, but going on and on, following a theory garnered from observing the science. Invention is often more about endurance and patient observation than brainwaves.” “Learning by trail and error, or experimentation, can be exciting, the lessons learned deeply ingrained. Learning by failure is a remarkably good way of gaining knowledge. Failure is to be welcomed, rather than avoided. It should not be feared by the engineer or scientist or indeed by anyone else.” “The Ballbarrow - my first consumer product, my first solo effort - was a failure but one from which I learned valuable lessons. There was a lesson about assigning patents, another about not having shareholders. I learned the importance of having absolute control of my company and not undervaluing it.” “One of the really important principles I learned to apply was changing only one thing at a time to see what difference that one change made. People think that a breakthrough is arrived by a spark of brilliance or even a eureka thought in the bath. I wish it were for me. Eureka moments are very rare. More usually, you start off by testing a particular set-up, and by making one change at a time you start to understand what works and what fails. By that empirical means you begin the journey towards making the breakthrough, which usually happens in an unexpected way.” “I worked on the [production] line for two weeks to understand how to make the vacuum cleaner more efficiently and have watched all of our lines ever since .. I learned which components were difficult to assemble and encouraged our engineers to visit lines frequently. Most importantly, this experience helped me look as all our subsequent products to understand where production inefficiencies fell.” “Of the 5,127 prototypes I made in the coach house of the cyclone technology for my first vacuum cleaner, all but the very last one were failures. And yet, as well as painstakingly solving a problem, I was also going through a process of self-education and learning. Each failure taught me something and was a step towards a working model. I have been questioning things and learning every day ever since.” “Learning by doing, Learning by trial and error. Learning by failing. These are all effective forms of education.” “When I was trying, unsuccessfully, to raise capital to start my vacuum cleaner business, all the venture capitalists turned me down, with one even saying that they might consider the opportunity if I had someone heading up the company from the domestic appliance industry. This was at a time when that industry was vanishing from Britain because, taken as a whole, its products were uncompetitive.” Life Lessons “Every day is a form of education.” “It was playing games, however, that taught me the need to train hard and to understand teamwork and tactics. The planning of surprise tactics, and the ability to adapt to circumstance, are vital life lessons. These virtues are unlikely to be learned from academic life and certainly not from learning by rote.” “Long-distance running taught me to overcome the pain barrier: when everyone else feels exhausted, that is the opportunity to accelerate, whatever the pain, and win the race. Stamina and determination along with creativity are needed in overcoming seemingly impossible difficulties in research and other life challenges.” “Doing things with my hands, often as an autodidact and with an almost absence of fear, became second nature. Learning by making things was as important as learning by the academic route. Visceral experience is a powerful teacher. Perhaps we should pay more attention to this form of learning. Not everyone learns in the same way.” Creativity & Invention “In order to stay ahead we need to focus increasingly on our creativity.” “At Dyson, we don’t particularly value experience. Experience tells you what you ought to do and what you’d do best to avoid. It tells you how things should be done when we are much more interested in how things shouldn’t be done. If you want to pioneer and invent new technology you need to step into the unknown and, in that realm, experience can be a hindrance.” “[You] need to listen to your customers, aiming to improve products wherever necessary and, if you are an inventor, simply for improvements sake. This is not to say we at Dyson ask our customers what they want and build it. That type of focus-group-led designing may work inn the very short term, but not for long.” “I still find myself saying and putting into practice some of the same things Jeremy Fry [an early mentor/employer] said and did when I worked for him half a century ago. As an inventor, engineer and entrepreneur, he believed in taking on young people with no experience because this way he employed those with curious, unsullied and open minds.” “The inventing mind knows instinctively that there are always further questions to be asked and new discoveries to be made.” “The Land Rover, the Swiss Army penknife, the Citroen 2CV, the Bell 47 helicopter and Alec Issigoni’s Mini - what I liked so much about these machines - and my affection for them remains undimmed - is their ingenuity and the fact that the power of invention invested in them made for designs that re-imagined and revolutionised their market sectors and even created wholly new markets. And yet, for all their functionality, each is a highly individual product with a character and charm of its own. What is equally interesting is that these radical machines made use of pre-existing ideas and components.” “A design might be considered ahead of its time and, sometimes because of this, even ridiculous. The hugely successful Sony Walkman was dismissed when first launched because who could possibly want a tape recorder that couldn’t record. And it was received knowledge, until Volkswagen and, later, Honda crossed the Atlantic with the Beetle and the Accord that Americans were wedded resolutely to big cars.” “The Sony Walkman is another fascinating success story because, at first, its design appeared to defy common sense. Priced at $150, the compact silver and blue Walkman wasn’t cheap, while within Sony it was controversial and brave because it was unable to record, and no one made a ‘tape recorder’ that wouldn’t do so before… With lightweight foam headphones and no function other than playback, the Walkman emerged. The press lampooned it. Even the name was ridiculous. The Japanese press was wrong, although the market hadn’t known it wanted a tiny personal stereo. When it saw the attractive little device, and heard it in action, it fell in love with it… By the mid-1980’s, the word had entered the Oxford English Dictionary. Sony’s Masura Ibuka - one of the Japanese company’s founders - hoped to sell 5,000 Walkmans a month. He sold 50,000 in the first two months. By the time production ended in Japan in 2010, more than 400 million had been sold worldwide.” “Without entrepreneurship, an inventor may not be able to bring their radical or revolutionary products to the marketplace or at least not under their own control. Without becoming an entrepreneur, they have to licence their technology, putting them at the mercy of other companies that may or may not have a long-term commitment to a particular new idea or way of thinking about the future.” “The idea [for the cyclonic vacuum cleaner] had been in my head since welding up the giant metal cyclone for the Ballbarrow factory. Now it made increasing sense. Here was a field - the vacuum cleaner industry - where there has been no innovation for years, so the market ought to be ripe for something new. And, because houses need cleaning throughout the year, a vacuum cleaner is not, like my Ballbarrow, a seasonal product. It is also recession proof. Every household needs one. It seemed to tick all the boxes. In any case, I’d used one since childhood and knew from experience that there had to be a better vacuum cleaner.” “If you believe you can achieve something - whether as a long distance runner or maker of a wholly new type of vacuum cleaner - then you have to give the project 100% of your creative energy. You have to believe that you’ll get there in the end. You need determination, patience and willpower.” “Bio-mimicry is clearly a powerful weapon in an engineer’s armoury.” “It’s a part of the Dyson story that I made 5,127 prototypes to get a model I could set about licensing. This is indeed the exact number. Testing and making one change after another was time-consuming. This, though, was necessary as I needed to follow up and prove or disprove every theory I had. And, however frustrating, I refused to be defeated by failure. All of the 5,126 I rejected - 5,126 so-called failures - were part of the process of discovery and improvement before getting it right on the 5,127th time. Failure, as I had already begun to learn with my experience with the Ballbarrow business is very important. I find it important to repeat that we do, or certainly should, learn from our mistakes and we should be free to make them.” “Every judgement in science stands on the edge of error and is personal… I have long had great admiration for engineers like Alec Issigonis [designed the Mini] and Andrew Lefebvre of Citroen .. they questioned orthodoxy, experimented, took calculated risks, stood on the edge of error and got things right. And when they got there, they continued to ask questions.” “One of the ways we made Dyson distinctive is by not allowing ourselves to rest on our laurels.” “A jet engine spins at 15,000 rpm, a Formula 1 engine at 19,000 rpm and a conventional vacuum cleaner motor at 30,000 rpm. Why go very much faster? Although at the time we were neither designers nor manufacturers of electric motors, we wanted to come up with a breakthrough in their design, creating a quantum leap in performance: many times faster, much lighter and smaller, brushless for a longer life and no emissions, more electrically efficient and above all controllable for speed, power and consumption.. The turbine speed we initially aimed for was 120,000 rpm.. Today, Dyson pioneers the world’s smallest high-speed motors. These have enabled us to reinvent the vacuum cleaner again with a pioneering new Dyson format. They have also allowed us to improve products in wholly new areas.” “People often ask if we would supply other companies with our motors. Although it might be profitable to do so, we supply no one other than ourselves. This is because I want Dyson engineers to be 100% focused on our next exciting motor development and not retrofitting our motors to someone else’s product.” “With each new motor we aimed to double its power output and halve it’s weight.” “We had been experimenting for some time with blades of air and working with sophisticated computational fluid-dynamics models for a project that remains secret… We had accidentally developed a new form of hand dryer. What’s more it didn’t need a heater… It has a carbon footprint six times smaller than that of paper towels… Despite our inroads, the paper towel industry retains 90% of the hand-drying market, worth billions of dollars each year. The big players want to defend a highly lucrative status quo.” “As often happens, our observations during the development of the Dyson Airblade hand dryer led us to the principles used in other products, like our Air Multiplier fans and, in turn, to heaters, humidifiers and air purifiers.” “For me, [the hairdryer] was another of those products, used frequently by hundreds of millions of people, stuck in a technological time warp. Existing hairdryers were heavy and uncomfortable to use.” “Ever since the Industrial Resolution, inventions had tended to compound inventions.” “It is hard for other people to understand or get excited about an entirely new idea. This requires self-reliance and faith on part of the inventor. I can also see that it is hard for an outsider to understand the challenge and thrill of inventing new technology, designing and manufacturing the product then selling it to the world.” “After the event, a revolutionary new idea can look so obvious - surely no one could possibly have doubted it? At their conception, though, new ideas are not blindingly obvious. They are fragile things in need of encouragement and nurturing against doubting Thomases, know-it-alls and so-called experts. Just as Frank Whittle discovered, it is easy for people to say ‘no,’ to dismiss new ideas and to be stick-in-the-muds, pessimists, or even cynics. It is much harder to see how something unexpected might be a success.” “We certainly have taken big risks, with the digital electric motors, the washing machine, the electric car and our research into solid-state batteries. Not all have been commercially successful. That is the point. By its very nature, pioneering will not always be successful, otherwise it would be all too easy. We don’t start these ventures with the inevitability of success - we are all to aware we may well fail.” Obliquity “Inventors rarely set out to make money per se, and if they do theirs is more often than not a pipe dream.” “I didn’t work on those 5,127 vacuum cleaner prototypes or even set up Dyson to make money. I did it because I had a burning desire to do so. And as do my thousands of colleagues, I find inventing, researching, testing, designing and manufacturing both highly creative and deeply satisfying.” Focus Groups & Experts “Just before the launch of the Mini car, Austin Morris did indeed consult a focus group, and nobody wanted this tiny car with small wheels. So they cut the production lines down to one. When the public saw it on the street, they were most enthusiastic for it. Austin Morris never caught up with demand, missing out on serious profits.” “The bestselling British car of all time is the Mini - If market research had ruled Alec Issigoni’s roost at BMC, it would never had existed… Alec’s view [was] that ‘market research is bunk’ and that one should ‘never copy the opposition.’” “I am cautious of experts .. Experts tend to be confident that they have all the answers and because of this trait, they can kill new ideas. But when you are trying to break new ground, you have no interest in getting stuck in engineering conventions or intellectual mud.” “Venture capitalists proved to be no help. [Six] venture capitals turned me down.” “I had been warned that at £200, or at least three times as expensive as most other vacuum cleaners, the DC01 would prove to be too expensive. It sold really well.” “The marketing team, who I listened to, said to me, ‘If you make it £200 cheaper you will sell a lot more [Dyson washing machines],’ and I believed them. We made it £200 cheaper and sold exactly the same number at £899.99 as we had a £1,089 and ended up losing even more money. I had made a classic mistake. This might sound counter-intuitive, but I should have increased the price. The Contrarotator was not meant to be a low cost washing machine.” “Although there is no guarantee of success, disruptive ideas can revolutionise a company and its finances through intuition, imagination and risk-taking as opposed to market research, business plans and strategic investment.” “Early on in our story, the [Dyson vacuum cleaner’s] clear bin was another ‘clear’ example of going our own way regardless. Trusting our own instincts, we decided to ignore the research and the retailers. Pete and I had been developing the vacuum cleaner and we loved seeing the dust and the dirt. We didn’t want to hide all the hard work the machine had done. Going against established ‘experts’ was a huge risk. No one could confirm that what we were doing was a good idea. Everyone, in fact, confirmed the reverse. The data were all against it. If, however, we had believed ‘the science’ and not trusted our instincts, we would have ended up following the path of dull conformity.” Innovation, Constant Improvement & Change “I greatly admire Soichiro Honda for his addiction to the continuous improvement of products. and Takeo Fujisawa. Their genius was to think against the grain while focusing on continuous improvement. The company [Honda] continues to invest a sizeable chunk of its income into R&D, aiming for constant improvement and innovation.” “Rather like the way some sharks have to keep moving to stay alive, innovative engineering-led manufacturers need continuous innovation to stay competitive. Striving for new and better products is often what defines such companies. At Dyson, we never stand still. In a quarter of a century, we have gone from making a revolutionary vacuum cleaner to prototypes of a radical electric car. Invention tends to compound invention and companies need to be set up for this.” “What was exciting is that, although our main focus was the vacuum cleaner, our thinking was that of a tech company. How else could we evolve cyclonic technology? What other uses could we put it to?” “Investment in new technologies requires many leaps of faith and huge financial commitment over long periods.” “I believe that it is critical to keep on improving and never to relax with a product that appears to be selling well. Permanently dissatisfied is how an engineer should feel.” “Our product development process is now truly a twenty-four hours a day process.” “What I can say is that if you came back to see what Dyson’s up to in five, ten, twenty or a hundred years from now, whether with our products or through our farms, things will be very different indeed. It’s all tremendously exciting and we should have cause for optimism.” “Every day is an adventure and a response to the unexpected. Even if things appear to be in some kind of stasis, a company must move on. It has to get better, evolve and improve in order to survive. There is no greater danger than satisfaction.” “What we do know is that companies always have to change to get better at what they do, plan to do and even dream of doing in the future. The adage that the only certainty is change is true, and this means not being afraid of change even if, for a company, it means dismantling what you have built in order to rebuild it stronger or killing your own successful product with a better one, as we did with our new format battery vacuum cleaners.” Counter-Positioning “Anyone watching me at work might reasonably have wondered why Electrolux and Hoover weren’t making and selling a vacuum cleaner like mine. With all their resources, surely they could have leaped ahead of me - one man and his dog, as it were, in a rural coach house - and cornered the market between them. There were though, at least three good reasons why they didn’t even think of pursuing a similar path to me. One, which went without saying, was that the ‘No Loss of Suction’ vacuum cleaner had yet to be invented. The second was that the vacuum cleaner bag replacement business was highly profitable. And the third, to my surprise, was that well established electrical goods companies seemed remarkably uninterested in new technology. With no outside challenges, they could afford to rest on their laurels. For the moment at least.” “I went to see Electrolux, Hotpoint, Miele, Siemens, Bosch, AEG, Philips - the lot - and was rejected by every one of them. Although frustrating, what I did learn is that none of them was interested in doing something new and different. They were, as I had already understood, more interested in defending the vacuum cleaner bag market, worth more than $500 million in Europe alone at the time. Here, though was an opportunity. Might consumers be persuaded to stop spending so much on replacement bags, which, by the way, are made of spun plastic and are not biodegradable, and opt for a bag-less vacuum cleaner that offered constant suction instead? If so, I might stand a chance against these established companies.” Multi-Disciplinary Approach “I loved my time at the Royal College of Art not least because of its lively and inventive cross-disciplinary approach. Here, as I progressed, I realised that art and science, inventing and making, thinking and doing could be one and the same thing. I dared to dream that I could be an engineer, designer and manufacturer at one and the same time.” Commerciality & The ‘Art of Selling’ “Inventions, though, no matter how ingenious and exciting, are of little use unless they can be translated through engineering and design into products that stimulate or meet a need and can sell.” “Even the most worthwhile and world changing inventions, from ballpoint pen to the Harrier Jump Jet, need to be a part of the process of making and selling to succeed.” “Selling goes with manufacturing as wheels do with a bicycle. It is far more than flogging second-hand cars or contraband wristwatches. Products do not walk off shelves and into people’s homes, And when a product is entirely new, the art of selling is needed to explain it. What it is. How it works. Why you might need and want it.” “Jeremy Fry taught me not to try to pressure people into buying but to ask them lots of questions about what they did, how they worked and what they might expect of a new product. Equally, I learned that most people don’t really know exactly what they want, or if they do it’s only from what they know , what is available or possible at the time. As Henry Ford said, famously if he asked American farmers what they wanted in terms of future transport, they would have answered ‘faster horses.’ You need to show them new possibilities, new ideas and new products and explain these as lucidly as possible. Dyson advertising focuses on how our products are engineered and how they work, rather than on gimmicks and snappy sales lines.” “Word of mouth and editorial remain the best way to tell people what you have done. It is far more believable than advertising and a real compliment when intelligent journalists want to go off and talk about your product on their own free will. If you have new technology and a new product, a journalist’s opinion and comment is far more important and believable than an advertisement.” “Within eighteen months, the DC01 vacuum cleaner was the biggest seller in the UK market. Our first sales were through hefty mail order catalogues. These devoted a few pages to vacuum cleaners. We were among the last pages, at the bottom, with a small, square picture of the DC01… Ours was the most expensive in these catalogues by some margin and they were not the sort of place you would expect expensive items to be sold. Both we and the buyers at the catalogue were, in fact, astonished that DC01 did so well through their pages, with repeat orders coming in. I have never, though, believed that someone’s income is a bar to them wanting to buy the best product and a vacuum cleaner is an important purchase.” “We decided to highlight the Achilles’ heel of other vacuums - the bag and its shortcomings.” “I love the fact we tackled prosaic products, making the vacuum cleaner into a high-performance machine.” “From the beginning we decided that we would create our own publicity materials and advertising. We would not use outside agencies. This is because we want to talk fearlessly about technology, which, of course is what had driven Dyson into being. Since we have developed the technology, we should know how to explain it to others.” “I didn’t want anyone to buy our vacuum cleaner through slick advertising. I wanted them to buy it because it performed. We could be straightforward in what we said, explaining things simply and clearly.” “I believe that trustworthiness and loyalty come from striving to develop and make high performing products and then looking after customers who have bought them. I am not a believer in the theory that great marketing campaigns can replace great products. What you say should be true to who you are.” Manufacturing “Experience taught me that, ideally, a manufacturer - Dyson certainly - should aim to source as little as possible from outside the company. Those of us who drove British cars made in the 1970’s know pretty much exactly why. Poor assembly aside, what often let these cars down were components sourced from poor-quality external suppliers. Electrical failures were legion.” “Obviously at Dyson we cannot make absolutely everything on own own, but we work with suppliers so that they are in tune with us, with our manufacturing standards and our values. Because what we’re doing is special and different, we can’t go to a company like Foxconn, for example. which makes well known American, Canadian, Chinese, Finnish & Japanese electronic products. Those products are mostly made from off-the-shelf components. We design our own components. We don’t buy them off the shelf.” “You can manufacture good-quality, pioneering technology much more readily when you sit side by side with your suppliers rather than 10,000 miles away in a different time zone.” “We build close relationships with owners of factories so we can build our machines in their premises. The tooling, assembly lines and test stations are ours and we control the purchasing and quality. We don’t approach a sub-contractor and say, ‘Make me a product of this or this design.’ We tend to go to outfits which have never made vacuum cleaners before or hairdryers, robots, fans and heaters or purifiers or lights, and we teach their people to make things using our production methods. It’s a heavily engaged and involved process of learning and improvement.” “We need other factories because, expanding at the rate of 25% each year, we simply couldn’t cope with the planning and building of new factories even in Singapore, Malaysia and the Philiipines.” Going Global “I knew that if Dyson was to be a successful technology company, rather than just a British vacuum cleaner manufacturer, we couldn’t be Little Englanders. We needed to become global, and quickly. England, and the rest of the United Kingdom, is simply not a big enough market on its own to sustain the constant and huge investment technology requires.” “In 2004, we took the DC12 cylinder vacuum to Japan, calling it the ‘Dyson City.’ It was engineered specifically for the tiny, perfectly formed homes of Japan. We were amazed by its success. Within three months it had captured 20% of the Japanese market.” “Dyson has become as much an Asian business as a British one: our products are sold in eighty-three countries around the world, so we are arguably a truly global company. Having started in Britain and consistently grown in Britain, we, for some time now, sell over 95% of our products in our global markets.” Acquisitions “We are not in the business of buying up other companies. It may be a quick way to acquire technology or a business that would augment a company, but it can be difficult to assimilate the people and their ways of doing things. Usually, I feel, it’s better to start your own research project or your own business, which, although slower to begin with, develops organically and is stronger for it.” Dyson Electric Car “Because of the shifting commercial sand, we made the decision to pull out of production [of our electric car] at the very last minute. N526 was a brilliant car. Very efficient motors. Very aerodynamic. Wonderful to drive and be driven in. We just couldn’t ever have made money from it, and for all our enthusiasm for the project we were not prepared to risk the rest of Dyson.” “Fortunately, we were able to stomach the £500 million cost and survive. We did, though, push ourselves to learn a great deal in areas including batteries, robotics, air treatment, and lighting. We also learned more about virtual engineering as a tool in the design process and how, we would be able to make products more quickly and less expensively. These were all valuable lessons for the future.” Private Company & Long Term Thinking “Today, Dyson is a global company. I own it, and this really matters to me. It remains a private company. Without shareholders to hold back, we are free to take long-term and radical decisions. I have no interest in going public with Dyson because I know that this would spell the end of the company’s freedom to innovate in the way it does.” “When you own the whole company, and especially if you are free of debt, from the early days and for better or worse, all decisions are your own. So you take these very seriously and follow your own view of risk balanced, hopefully, with reward. This certainly sharpens the mind.” “We’re one family-owned company following its interest and passions.” “The advantages of a family business are that they can think in the very long term, and invest in the long term, in ways public companies are unable to do. I also believe that family-owned enterprises have a spirit, conscience and philosophy often lacking in public companies.” Win-Win & ESG “In our first year in Currys [retailer], Mark Souhami, one of the bosses alongside the founder Stankley Kalms, invited me to lunch with them both. They explained that because of Dyson they were now making a profit in their vacuum cleaner section and he wanted more Dyson products.” “I have always loathed companies that use ‘greenwash’ as part of their marketing. I would rather reduce our environmental impact quietly and by action. We were, and remain, a company primarily of engineers and because of this we have sought from the outset to use as little energy or materials as possible to solve or complete one particular task. Lean engineering is good engineering.” “For me, as for all Dyson engineers, lightness - lean engineering and material efficiency - is a guiding principle. Using less material means using less energy in the process of making things. It also means lighter products that need less energy to power them and are easier to handle and so more pleasurable to use.” “Dyson has always focused on making long-lasting machines that use fewer resources while achieving higher performance. Lighter machines resulting from developing new technology and reinventing the format, consumer less energy and are not only better for the planet but also more pleasurable to use. Our cord-free vacuum cleaners, for instance, are a fraction of the weight and use a fraction of the electricity than their predecessors did. This has come about by taking an entirely different approach and developing new technology, motors and batteries, from the ground up.” “We must move ever closer to a culture whereby we minimise the use of materials through lean engineering along with the recycling of products at the end of their lives. It’s not just okay to politely offset our carbon footprint. We have to deal with it at source.” “As Dyson, we are trying at every turn to touch the ground lightly in everything we do, to make more from less and to create a circular system through which we aim to recycle everything we use.” Removing Middlemen “Over the past three years we had been striving to sell more products direct to our customers ourselves, either online or through Dyson Demo stores. By early 2021 we had 356 Dyson stores. We have been opening them around the world so that customers can try our Dyson products in the best possible way. There are two reasons for this. First, we like to have a direct relationship with our customers, who are buying our product for which we are responsible, and we want to know how we can help them. Secondly, retailers around the world are declining in numbers and sales. They are nothing like the force they were, due of course to the decline of the high street and the rise of internet shopping. If you want to buy from a website, why not buy from the Dyson website! Why not deal directly with the manufacturer?’” “When I started out with the vacuum cleaner business, wholesales and retailers made most of the money .. which is why today a lot of our sales at Dyson are direct.” “Cutting out the middleman, and those who add no value, ought to be a popular national campaign. It would mean a possibility of profit for risk takers and producers, and lower prices for consumers.” Listen to Customers “Listening to what our users say is gold dust and I really enjoy reading or hearing about complaints. We devised a system of reporting all remarks heard by customers in stores or by store salespeople from all over the world, so that everyone in the company can see this priceless intelligence.” Optimism “I have great faith that science and technology can solve problems, from more sustainable and efficient products to the production of more and better food, and a more sustainable world. It is technological and scientific breakthroughs, far more than messages of doom, that will lead to this world. We need to go forwards optimistically into the future as if into the light, and with bright new ideas rather than darkness and end to human ingenuity portrayed by doomsayers.” “The depressing thing is that harbingers of doom and gloom get far more attention than optimists and problem solvers. I feel very strongly that progress should be embraced and encouraged, and it is a duty of governments and companies to catalyse the ideas of the progressive and harness them to achieve good ends.” Summary Most people would consider someone who’d failed 5,126 times and succeeded just once, a failure. Yet, that’s exactly what James Dyson did. That one success was the acorn that grew into a $US10 billion dollar fortune (talk about asymmetric returns!) There’s a myriad of lessons for inventors, investors and entrepreneurs in the pages of this book. Many of the lessons are equally applicable to each endeavour; maintaining focus, taking a long term view, continuously learning, challenging conventional wisdom and adopting a multi-disciplinary mindset. As you delve into the story an investment case emerges and the pieces of the puzzle start to fit together. An inventive fanatic full of passion, tenacity, resilience and self-belief recognises a prosaic industry that’s been neglected by technology and ripe for disruption. The target market is huge and somewhat immune from the vagaries of the economic cycle. A kernel of inventive insight, a variant perception on consumers preparedness to pay more for quality products and constant iteration leads to the development of a revolutionary product. Driven by a purpose beyond wealth accumulation (obliquity), a ‘technology’ business emerges. Full control of the ecosystem and intellectual property become further competitive attributes difficult to challenge. As technology compounds (a’la Brian Arthur) the barriers to competition widen. The tone is set from the top - a culture of continuous innovation and rejecting the status quo flourishes. Risk taking on a scale where failure is tolerable (a’la Palchinsky principle) is encouraged, creating new possibilities. Private ownership and low debt affords a long term view - no one is watching the quarterly shot clock. While there is no spreadsheet or financial model, there is a full scale mental model, or theory, developing. The component mental models, together, shed light on the Dyson company’s extraordinary success. My contention is this latter model will prove more useful in determining whether Dyson will continue to prosper in the future. Let’s not forget however, that without James Dyson, there would be no Dyson. Like many of the great businesses we’ve studied, it started with a fanatic. Source: ‘James Dyson - Invention: A Life,’ James Dyson, Simon & Schuster, 2021. Further Learning: ‘James Dyson - Invention: A Life - Interactive Portal.’ Follow us on Twitter : @mastersinvest * NEW * Visit the Blog Archive Article by Investment Masters Class Updated on Nov 22, 2021, 3:44 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkNov 22nd, 2021

NOVAGOLD Reports Second Quarter 2022 Financial Results

Donlin Gold's Largest Drill Program in Over 10 Years Advancing in Preparation for Feasibility Work Strong Treasury of $142 Million in Cash and Term Deposits; $25 Million of Receivables in 2023 Building on the success of the 2021 drill program, drilling commenced in February 2022 with four drill rigs operating for 34,000 meters of planned drilling. As of mid-June, more than 70% of planned drilling is complete. The first set of assay results for this year's program are expected to be published this summer. The 2022 drill program continues to yield encouraging results. In 2022, under the largest budget in over a decade, geologic modelling and interpretation work to update the resource model is underway, including engineering activities for use in an updated feasibility study that, subject to Donlin Gold LLC Board approval, is expected to commence in the second half of 2022. NOVAGOLD's robust balance sheet of $142 million in cash and term deposits as of May 31, 2022, with additional funds of $25 million due in July 2023 from Newmont Corporation, should be sufficient to advance Donlin Gold to a construction decision. VANCOUVER, British Columbia, June 29, 2022 (GLOBE NEWSWIRE) -- NOVAGOLD RESOURCES INC. ("NOVAGOLD" or "the Company") ((NYSE American, TSX:NG) today released its 2022 second quarter financial results and an update on its Tier One1 gold development project, Donlin Gold, which NOVAGOLD owns equally with Barrick Gold Corporation ("Barrick"). Details of the financial results for the quarter ended May 31, 2022 are presented in the consolidated financial statements and quarterly report filed on Form 10-Q on June 29, 2022 that is available on the Company's website at, on SEDAR at, and on EDGAR at All amounts are in U.S. dollars unless otherwise stated. In the second quarter 2022, the following milestones were achieved at Donlin Gold: The drill program is progressing ahead of schedule with 24,000 meters completed to date of the planned 34,000-meter drill program. The site crew (150 employees, contractors and student interns), a majority of which are local hires from 24 Yukon-Kuskokwim (Y-K) communities in Alaska, are working on a two-week rotation schedule and continue to advance project activities at a good pace. In May, the Alaska Department of Environmental Conservation (ADEC)'s Division of Water upheld the 401 Certification of the Clean Water Act (CWA) which had been remanded to the ADEC on December 29, 2021, for consideration of additional information provided by Donlin Gold. Donlin Gold participated in and sponsored statewide events and, together with its Native Corporation partners, Calista Corporation and The Kuskokwim Corporation (TKC), carried out a wide range of critical support and engagement activities throughout the Y-K region. These included: Finalizing a Shared Value Statement with Stony River, a village from the Y-K region for a total of nine Shared Value Statements to date (Akiak, Sleetmute, Kalskag, Napaimute, Crooked Creek, Napaskiak, Nikolai, Tuluksak, and Stony River). These agreements include educational, environmental, and social initiatives to help support villages; Serving as a principal partner in the 50th Iditarod Race in March with mushers and their teams from around the world participating in the 1,000-mile-long sled-dog race in Alaska, also called "The Last Great Race"; Holding the Lower Kuskokwim School District's annual College and Career fair with 30 vendors and 89 students attending the virtual event; Working with TKC to charter flights with drinking water to Red Devil, one of the local communities on the Kuskokwim River, following a flood due to ice break-up in May that temporarily contaminated the local water wells; and Sponsoring multiple Y-K community events and gatherings as well as statewide events, including the Skwentna 200 snowmobile race, the Native Youth Olympics and the Arctic Encounter Symposium – the largest annual Arctic policy event held in the United States. ________________________1 NOVAGOLD defines a Tier One gold development project as one with a projected production life of at least 10 years, annual projected production of at least 500,000 ounces of gold, and average projected cash costs over the production life that are in the lower half of the industry cost curve. President's Message Donlin Gold's Largest Drill Program in More Than 10 Years Progressing Ahead of Schedule The prime focus of our activities this year is to undertake a 34,000-meter drill program with tight-spaced grid drilling as well as in-pit and ex-pit exploration; and to input the results from this drilling into the geologic modelling and interpretation work that is being used for updated resource models. In addition to the engineering studies being undertaken, this program will as a whole enable commencement of an updated feasibility study. The Donlin Gold total 2022 expenditures are anticipated to be $60 million (of which NOVAGOLD's portion is 50%). The budget also supports the advancement of environmental activities, and finances community and external affairs efforts. Following the excellent results of 2021, we are encouraged by the significant drill program for 2022, with drilling also focused on upside prospects in the ACMA and Lewis pits where drilling so far has been limited. In the second quarter 2022, the team of 150 people at Donlin Gold are advancing drilling activities at a good pace, with more than 70% of the planned drilling completed to date. We expect the first set of assay results from the 2022 drill program to be issued this summer. The health and safety of our workforce, both at NOVAGOLD and at Donlin Gold, is a priority. Both NOVAGOLD and Donlin Gold have implemented strict safety protocols, and COVID-19 mitigation measures are still in place at Donlin Gold to ensure the staff rotations in and out of the camp are conducted in both an efficient and safe manner. The 2021 drill program results are being incorporated into updated geologic and resource models as well as mining schedules and life of mine business plans ahead of the update to the feasibility study, which is expected to commence in 2022, subject to a formal decision by the Donlin Gold LLC Board. Onwards and Upwards Donlin Gold is fortunate to enjoy time-tested partnerships with Calista and TKC, owners of the mineral and surface rights, respectively. The project's location on private land specially designated for mining activities through the 1971 Alaska Native Claims Settlement Act (ANCSA) constitutes a key attribute that distinguishes it from most other mining assets in Alaska. Our longstanding commitment to meaningful tribal consultation throughout project development and permitting has been demonstrated over decades of reliable and dependable engagement with the community. And it shows. Donlin Gold received its federal permits in 2018 and most of the key State permits are also in place. This represents a tremendous achievement and the product of a substantial undertaking, over many years, to ensure a diligent, thorough, transparent, and inclusive process for all involved – including stakeholders from the Y-K region. On May 16, 2022, ADEC's Division of Water upheld the 401 Certification of the CWA which had been remanded to the ADEC on December 29, 2021. On June 13th, 2022, Earthjustice and Orutsararmiut Native Council (ONC) requested that the ADEC Commissioner conduct an additional adjudicatory hearing on the part of the Division of Water's decision related to potential water temperature effects in Crooked Creek. In 2021, the State of Alaska's issuance of water rights for the mine and transportation facilities was appealed to the Commissioner of the Alaska Department of Natural Resources (ADNR). On April 25, 2022, the ADNR Commissioner denied the appeal; however, Earthjustice, ONC and five villages appealed the Commissioner's decision in Alaska Superior Court on May 25, 2022. A briefing schedule has not yet been set by the Court. Donlin Gold and the owners will continue to support the State in its defense of their thorough and diligent permitting process. On September 20, 2021, ADNR's issuance of the Right-of-Way (ROW) lease for the portions of the natural gas pipeline on State lands was separately appealed in Alaska Superior Court by two parties: (1) Earthjustice representing ONC, the native villages of Eek, Chevak, and Kwigillingok, and Cook Inletkeeper; and (2) Robert Fithian, an adventure business owner who operates near the ROW. On April 5, 2022, Earthjustice filed its opening brief, ADNR and Donlin Gold then filed their response briefs on June 16, 2022. Mr. Fithian filed his opening brief on June 8, 2022, ADNR and Donlin Gold are working on their response briefs. Donlin Gold has applied for a new air quality permit from ADEC to be in place when the extension of the current permit expires in mid-2023. We anticipate that ADEC will issue a draft of the new permit for public comment in the second half of 2022. We are also working with the ADNR, the U.S. Bureau of Land Management, and our Alaska Native Corporation partners on re-locating certain public easements and ROWs in the mine and transportation facility areas for public safety purposes. Alternate routes will be constructed and available before any existing planned routes are closed (some of which are not passable during much of the year). We anticipate that the proposed re-locations will be issued for public comment sometime in 2022. Donlin Gold, working with its Native Corporation partners, continues to support the State of Alaska to advance other permits and certificates for the project. The field work related to the issuance of the Alaska Dam Safety certificates is expected to recommence during the second half of 2022 or the first half of 2023. Native Corporation Participation and Consistent Community Engagement NOVAGOLD prides itself on having been a longstanding leader in ESG. We are committed to delivering long-term value to all our stakeholders through responsible mining, the protection of human life, good stewardship of the environment, and adding value to the local communities in which we operate. Donlin Gold's Native Corporation partners, Calista and TKC, provide valuable insight about their region, way of life, culture, and ANCSA mandate, under which the Donlin Gold lands were selected and set aside for mining activities to promote the economic prosperity of their shareholders. As private landowners, Calista and TKC are committed to developing a mining operation that is consistent with the Elders' vision of responsible development – one that creates jobs and economic benefits for the communities while mitigating impacts to the environment and protecting local culture. In the second quarter, Donlin Gold participated in and sponsored multiple local events with Calista and TKC, providing a wide range of critical support and engagement activities throughout the Y-K region. This encompassed a broad array of projects including the signing of a new Shared Value Statement with Stony River, a village in the Y-K region, for a total of nine Shared Value Statements to date (Akiak, Sleetmute, Kalskag, Napaimute, Crooked Creek, Napaskiak, Nikolai, Tuluksak, and Stony River). In addition, we undertook numerous educational, environmental, and social initiatives to help support villages, such as working with TKC to charter flights with drinking water to Red Devil, one of the local communities on the Kuskokwim River, following a flood in May as a result of the ice breakup that temporarily contaminated local water wells, supporting the Skwentna 200 snowmobile race, and sponsoring the Lower Kuskokwim School District's annual College and Career fair with 30 vendors and 89 students attending the virtual event. Additionally, Donlin Gold sponsored statewide events including the Native Youth Olympics and the Arctic Encounter Symposium – the largest annual Arctic policy event in the United States. Donlin Gold was also the principal sponsor of the 50th anniversary of the Iditarod, the 1,000-mile sled-dog race, often referred to as "The Last Great Race". This event holds a special connection with the gold rush days in Alaska and is a reconstruction of the freight route to Nome through which much needed supplies as well as news from afar were once delivered. In March 2022, 49 mushers and their dogs participated in the race, with numerous volunteers and veterinarians to support and care for the mushers and dogs along the various checkpoints. A Rare High-Quality Gold Asset in a Jurisdiction that Welcomes Responsible Development In our view, Donlin Gold is a rare gold development asset. The reason for such a unique status, beyond providing investors with pure leverage to gold, lies in the project's key attributes – namely: Size (no gold mine ever began production with 39 million ounces in Measured and Indicated Resources, inclusive of Proven and Probable Mineral Reserves); Scale (expected to be a million-ounce-per-year producer with a projected mine life of ...Full story available on»»

Category: earningsSource: benzinga14 hr. 16 min. ago

Raytheon (RTX) Wins $867M Deal to Build SM-3 Block IIA Rounds

Raytheon (RTX) set to engage in the manufacture and assembly of Standard Missile-3 Block IIA All-Up Rounds. Raytheon Technologies Corp.’s RTX business unit, Missile Systems, recently secured a contract involving Standard Missile-3 (SM-3). The contract has been offered by the Missile Defense Agency, Dahlgren, VA.Details of the DealValued at $866.6 million, this contract is projected to be completed by Dec 31, 2026. Per the terms, Raytheon will engage in the manufacture and assembly of Standard Missile-3 Block IIA All-Up Rounds.The work related to the deal will be executed in Tucson, AZ and Huntsville, AL. The contract will cater to the U.S. government and Japan’s Ministry of Defense.Raytheon’s Missile StrengthRaytheon Missiles & Defense (RMD) is a leading designer, developer, integrator producer and sustainer of integrated air and missile defense systems. This unit serves as the prime contractor or major subcontractor on numerous missile and related programs with the U.S. Department of Defense.The SM-3 missile is a defensive weapon that the U.S. Navy uses to destroy short- to intermediate-range ballistic missiles. The flexibility of the SM-3 interceptor to be both land- and sea-based offers countries that do not have ballistic missile defense-enabled navies to take advantage of its incredible capacity to protect large areas of land.In cooperation with Japan, Raytheon is currently developing the next-generation SM-3 Block IIA interceptor. It has two distinct new features: larger rocket motors that will allow it to defend broader areas from ballistic missile threats and a larger kinetic warhead. The kinetic warhead has been enhanced, improving the search, discrimination, acquisition and tracking functions, to address advanced and emerging threats.So far, more than 400 interceptors have been delivered to the U.S. and Japan’s navy, which reflects the solid demand that Raytheon’s SM-3 missile enjoys worldwide. Considering this and the upgraded features of Block IIA, we expect the company to witness more inflow of contracts, involving production and associated upgrade of these missiles, like the latest one.Growth ProspectsPer Mordor Intelligence, the missiles and missile defense systems market is estimated to register a CAGR of more than 10% between 2020 and 2025. The growing conflicts between various countries and the increasing number of investments in missile defense systems being made by nations are expected to drive the market, thereby creating solid growth opportunities for Raytheon, which is a prominent missile maker.Other major missile makers like Northrop Grumman NOC, Lockheed Martin LMT and General Dynamics GD are also expected to benefit, considering the aforementioned growth prospects of the missile and missile defense market.Northrop is a prominent developer of missile systems, and counter systems, including strategic deterrents, as well as subsystems and components. In fact, to strengthen its position in the missile market, Northrop acquired Orbital ATK in 2018, which used to be one of the industry leaders in providing missile components across air, sea, and land-based systems.Northrop boasts a long-term earnings growth rate of 6.1%. The Zacks Consensus Estimate for 2022 sales implies an improvement of 2.6% from 2021’s reported figure.Lockheed’s Missiles and Fire Control business unit develops, manufactures, and supports advanced combat missiles and rockets for military customers, including the U.S. Army, Navy, Air Force, Marine Corps, NASA and dozens of foreign allies. Some of its prominent products include the PAC-3 missile as well as the Terminal High Altitude Area Defense missile.Lockheed boasts a long-term earnings growth rate of 5.7%. It has a four-quarter average earnings surprise of 63.25%.  General Dynamics’ Ordnance and Tactical Systems is the system integrator of the 2.75-inch Hydra-70 family of rockets. It also produces composite rocket motor cases and launch tubes for tactical and strategic missiles.General Dynamics boasts a long-term earnings growth rate of 9.8%. The Zacks Consensus Estimate for 2022 sales indicates an improvement of 2.7% from 2021’s reported figure.Price MovementIn the past year, Raytheon Technologies’ shares have risen 4.2% against the industry’s 4.7% decline.Image Source: Zacks Investment ResearchZacks RankRaytheon Technologies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Free: Top Stocks for the $30 Trillion Metaverse Boom The metaverse is a quantum leap for the internet as we currently know it - and it will make some investors rich. Just like the internet, the metaverse is expected to transform how we live, work and play. Zacks has put together a new special report to help readers like you target big profits. The Metaverse - What is it? And How to Profit with These 5 Pioneering Stocks reveals specific stocks set to skyrocket as this emerging technology develops and expands.Download Zacks’ Metaverse Report now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lockheed Martin Corporation (LMT): Free Stock Analysis Report Northrop Grumman Corporation (NOC): Free Stock Analysis Report General Dynamics Corporation (GD): Free Stock Analysis Report Raytheon Technologies Corporation (RTX): Free Stock Analysis Report To read this article on click here......»»

Category: topSource: zacksJun 17th, 2022

Surging Oil Prices Push Permian Production to New Record

Big producers like ExxonMobil (XOM), Chevron (CVX) and ConocoPhillips (COP) are betting heavily on the prolific Permian Basin as the shale play looks set to hit a new production record. According to the U.S. Energy Information Administration’s (EIA) latest Drilling Productivity Report, oil output in the Permian Basin will surpass 5.3 million barrels per day in July. The agency forecasts that crude volumes from the western part of Texas and the south-eastern part of New Mexico will go up from a record 5,232 thousand barrels per day (Mbbl/d) in June to 5,316 Mbbl/d next month. The projected production figure for July would be a new high for America’s biggest oil field and reflects the steady addition of rigs. As proof of improvement in activity, the rig count in the Permian Basin has risen to 344 from an all-time low of 116 in August 2020.  As far as combined U.S. oil supplies from seven major shale formations (Anadarko, Appalachia, Bakken, Eagle Ford, Haynesville, Niobrara and Permian) is concerned, EIA expects it to increase from 8,758 thousand barrels per day (Mbbl/d) in June to 8,901 Mbbl/d in July. As crude prices hover around the $120-barrel level, production is expected to increase in six of the seven unconventional plays, with the largest gain of 84,000 barrels per day seen in the Permian Basin.The effects of strong oil prices can also be seen in the number of wells being drilled but not completed, or wells that could be turned on at short notice. The EIA said that the number of such wells declined by 46 over the past month, with 37 of those in the Permian.Experts say that it’s cheaper to drill and complete oil wells in the Permian Basin as compared to most other major fields. Moreover, there are certain parts of the shale play whose well-returns are the best in the U.S. Permian’s attractive economics. This means that producers can make enough money and sustain growth there at the current price. According to estimates, the average breakeven prices in most of the Permian well locations is below $50 per barrel — the lowest in the United States.It’s not surprising that the United States’ top energy moguls have renewed their focus on the largest U.S. shale play. The likes of ExxonMobil XOM, Chevron CVX and ConocoPhillps COP are placing long-term bets on the Permian Basin to take full advantage of the commodity upcycle.ExxonMobil continues to invest heavily in the low-cost play. The company plans to spend 50% more this year in the Permian compared to last year. Of the $20-$25 billion budget annually through 2027, XOM will allocate the lion’s share of the investment toward Permian, to go with offshore Guyana initiatives.At first-quarter end, the Zacks Rank #1 (Strong Buy) ExxonMobil produced 560,000 barrels of oil equivalent per day in the Permian Basin, which is a 25% increase versus 2021. XOM has a strong presence in the prolific area, where it continues to lower its fracking & drilling costs.  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Chevron, meanwhile, announced that for 2022, it intends to spend $4.5 billion on shale, with the largest part (or $3 billion) going to the lucrative Permian Basin of Texas and New Mexico alone. In fact, CVX’s existing project pipeline is among the best in the industry, thanks to its premier position in the lucrative play.Driven by robust output in the showpiece region, Chevron's Permian volumes during the first quarter of 2022 increased 26.5% from the year-earlier level to a record 692 thousand barrels of oil equivalent per day. CVX currently holds approximately 2.2 million net acres in the Permian — primarily in the prolific Midland and Delaware basins.Another big U.S. company ConocoPhillips' Permian footprint has expanded significantly over the past year, culminating with last year’s purchase of 225,000 net acres in the core of the oilfield. The acquisition added 200,000 barrels of oil equivalent per day of production to COP’s portfolio, putting it just behind ExxonMobil to become the second-largest hydrocarbon producer in the Lower 48.To further frame the Permian's importance for ConocoPhillips, COP expects a company-wide capital expenditure of $7.8 billion in 2022, including some $700 million associated with the Permian asset acquisition.In conclusion, crude production in the Permian Basin — the lowest-cost shale region — seems to have taken off with commodity prices stabilizing within the range of $110 to $120 a barrel. As major operators hit the accelerator on drilling activity, the region is set to experience significant gains in oil production next year, taking it past the pre-pandemic levels. Free: Top Stocks for the $30 Trillion Metaverse Boom The metaverse is a quantum leap for the internet as we currently know it - and it will make some investors rich. Just like the internet, the metaverse is expected to transform how we live, work and play. Zacks has put together a new special report to help readers like you target big profits. The Metaverse - What is it? And How to Profit with These 5 Pioneering Stocks reveals specific stocks set to skyrocket as this emerging technology develops and expands.Download Zacks’ Metaverse Report now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chevron Corporation (CVX): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report ConocoPhillips (COP): Free Stock Analysis Report To read this article on click here......»»

Category: topSource: zacksJun 17th, 2022

3 Furniture Stocks Worth Watching Amid Supply-Chain Woes

Although rising inflation and supply-chain disruptions pose risks, positive momentum in home remodeling projects along with a focus on digitization and product innovation raise hopes for WSC, LZB, and VIRC. Increasing investments in home improvement and remodeling activities accompanied with technological advancements and solutions are expected to drive the Zacks Furniture industry’s growth. Although supply-chain disruptions, greater inflation, continued investments in e-commerce and intense competition might keep margins under pressure, higher consumer spending, product innovation as well as accretive buyouts should favor the furniture industry. In addition, efficient cost management should lend support to industry players like WillScot Mobile Mini Holdings Corp. WSC, La-Z-Boy Incorporated LZB and Virco Mfg. Corporation VIRC.Industry DescriptionThe Zacks Furniture industry comprises manufacturers, designers and marketers of residential as well as commercial furnishing solutions. Some of the companies provide kitchen and bath cabinets as well as various engineered components and products in the United States along with international markets. A few industry players also offer specialty rental services such as modular and portable storage solutions as well as modular space and portable storage solutions. They are involved in designing and producing a wide variety of engineered components and products for homes, offices and automobiles. The industry players cater to different sectors, namely, construction, energy, healthcare, security, government, retail, commercial, education and transportation.3 Trends Shaping the Furniture Industry's FutureSupply-Chain Issues, Rising Inflation & Higher Expenses: The companies have been witnessing supply-chain disruptions, especially in chemicals, semiconductors, labor and transportation, which are constraining volume growth. As such, consumers are increasingly concerned about rising inflation and many expect inflation to outpace income growth. This would represent a risk to spending, which makes up two-thirds of the economy. The industry players are distressed by the rising raw material prices and logistic expenses. The labor market has also tightened with limited availability of labor, thereby driving labor costs.Also, the furniture industry is highly competitive, with home furnishing retailers, department stores and antique dealers giving a hard time. Again, companies need to make incremental investments to address an expanding omni-channel environment, as shoppers tend to look for online options. Growth in online sales may continue to dent traditional furniture retailers’ market share as brands such as Etsy, Things Remembered, Costco and Amazon are finding their way into the market.Higher Home Repair & Remodeling Activities: Higher spending by homeowners for home renovation has been benefiting the furniture industry. Homeowners remain committed to investing in their homes despite sharp product and material costs driven by supply-chain disruptions. The latest Leading Indicator of Remodeling Activity (“LIRA”), released by Harvard University’s Joint Center for Housing Studies, predicts that expenditures for improvements and repairs to the owner-occupied housing stock are expected to grow throughout 2022 and into early next year. LIRA expects residential renovation and maintenance spending to increase year over year and peak at 19.7% in the third quarter of this year before sliding downward to 15.1% in the first quarter of 2023. So, significant investments in renovation are expected to brighten the market outlook.Innovation, Digital Marketing & Acquisitions: Product innovation plays a key decisive factor for market share gain in this industry. Players are investing in new products to improve the product mix in a competitive landscape and drive top-line growth. Also, millennials represent the largest consumer cohort in the furniture market. More money in the hands of this largest and most-active generation of homebuyers should keep demand elevated. Customer experience is getting enhanced by innovative marketing techniques, with an emphasis on digital marketing, better merchandising, store remodeling and loyalty programs. Furthermore, the industry players are pursuing acquisitions to broaden their product portfolio and expand geographic footprint as well as market share.Zacks Industry Rank Indicates Dull ProspectsThe Zacks Furniture industry is an eight-stock group within the broader Zacks Consumer Discretionary sector. The industry currently carries a Zacks Industry Rank #193, which places it at the bottom 24% of more than 250 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates tepid near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. Since April 2022, the industry’s earnings estimates for 2022 have been revised 1.9% downward.Despite the industry’s gloomy near-term view, we will present a few stocks that one may consider adding to their portfolio. Before that, it’s worth taking a look at the industry’s shareholder returns and current valuation.Industry Outperforms Sector, Lags S&P 500The Zacks Furniture industry has outperformed the broader Zacks Consumer Discretionary sector but lagged the Zacks S&P 500 composite over the past year.Over this period, the industry has lost 20.5% compared with the broader sector’s 35.8% decline and the S&P 500’s decrease of 3.5%.One-Year Price PerformanceIndustry's Current ValuationOn the basis of the forward 12-month price-to-earnings (P/E), which is commonly used for valuing furniture stocks, the industry is currently trading at 13.46X compared with the S&P 500’s 17.59X and the sector’s 18.66X.Over the past five years, the industry has traded as high as 19.25X and as low as 9.40X, with the median being 15.12X, as the chart below shows.Industry’s P/E Ratio (Forward 12-Month) Versus S&P 5003 Furniture Stocks to Watch NowWe have selected one stock from the Zacks universe of furniture stocks that currently carry a Zacks Rank #2 (Buy). We have also highlighted two other stocks carrying a Zacks Rank #3 (Hold) with solid prospects. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. WillScot Mobile Mini Holdings: This Phoenix, AZ-based company provides modular space and portable storage solutions. The company is benefiting from continuous product innovation, solid segmental results and transformation of the legacy WillScot business into Mobile Mini's SAP platform. Record order backlog and broad-based end-market strength have been driving growth. Despite macroeconomic uncertainties, WSC expects robust demand to continue into 2023 given order backlog, prospects for infrastructure investment, a net positive inflationary environment, own national account conversations, and the 14th month of ABI expansion, which is a strong leading indicator for non-residential construction customers. The recent acquisitions through April, and a robust pipeline added to the positives.WillScot, a Zacks Rank #2 stock, has gained 27.4% over the past year versus the industry’s 20.5% drop. The company has an expected earnings growth rate of 73.7% for 2022.Price and Consensus: WSCLa-Z-Boy: Based in Monroe, MI, this company manufactures, markets, imports, exports, distributes, and retails upholstery furniture products, accessories, and casegoods furniture products. LZB has been benefiting from strong demand trends across all business units. Further, its solid cash position and investment in business bode well. The company has been navigating well through challenges like escalating commodity and freight costs with the help of higher pricing, strong brand presence, vast distribution through multiple channels and strategic investments across the business to drive market share gains.La-Z-Boy’s shares have dropped 40.9% in the past year. Nonetheless, earnings of La-Z-Boy — a Zacks Rank #3 company — are expected to grow 13.7% in fiscal 2022.Price and Consensus: LZBVirco Mfg.: Headquartered in Torrance, CA, this company designs, produces and distributes furniture in the United States. Although the company has been reeling under material cost increases, and higher costs associated with materials, freight and logistics, VIRC has been witnessing higher demand as stimulus funding aids recovery in the school furniture market. Notably, the fourth quarter is typically a slow time for orders in the seasonal cycle for school furniture. Nonetheless, orders were up 65% during the fiscal fourth quarter of 2022 compared to the same period of the prior year. A higher funding level for public schools, as well as the competitive advantage it has from its domestic production and distribution model, has been enabling VIRC to consistently take market share from overseas competitors.VIRC’s shares have slipped 4% in the past year. Earnings of VIRC — a Zacks Rank #3 company — are expected to grow 134.7% in fiscal 2022.Price and Consensus: VIRC Free: Top Stocks for the $30 Trillion Metaverse Boom The metaverse is a quantum leap for the internet as we currently know it - and it will make some investors rich. Just like the internet, the metaverse is expected to transform how we live, work and play. Zacks has put together a new special report to help readers like you target big profits. The Metaverse - What is it? And How to Profit with These 5 Pioneering Stocks reveals specific stocks set to skyrocket as this emerging technology develops and expands.Download Zacks’ Metaverse Report now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report WillScot Mobile Mini Holdings Corp. (WSC): Free Stock Analysis Report LaZBoy Incorporated (LZB): Free Stock Analysis Report Virco Manufacturing Corporation (VIRC): Free Stock Analysis Report To read this article on click here......»»

Category: topSource: zacksJun 6th, 2022

Czech Republic To join Poland And Hungary In Central European Gold Rush

Czech Republic To join Poland And Hungary In Central European Gold Rush Submitted by Ronan Manly, It was almost inevitable that the Czech Republic would buy more gold. With all of its regional neighbors having recently either repatriated large quantities of gold (Germany and Austria), or bought large quantities of gold (Poland and Hungary), it seems that the Czech Republic has now taken note and does not want to be left out of this Central European gold rush. On 26 May in an interview with Czech publication Ekonom, the incoming governor of the Czech National Bank (CNB), Aleš Michl, said that he plans to massively increase the central bank’s gold reserves from the current 11 tonnes to over 100 tonnes or more. The Czech Republic - At the centre of Central Europe 1000% Increase in Czech Gold Holdings Talking to Ekonom’s editor Vojtěch Wolf, and deputy editor-in-chief, Martin Petříček, the soon to be central bank governor explained his approach to the management of the Czech central bank’s reserves:   Ekonom question: "You have repeatedly said that the CNB should manage foreign exchange reserves differently, which have swelled in recent years. What is your vision on that?" Aleš Michl answer: "The reserve management team is professional, they have assignments from the bank board that perform well. I would like to give them a new assignment, to slightly increase the expected return on reserves. To do this, you need to have more stocks and more gold. And to do it gradually, step by step, it is a change of strategy over years."   Ekonom question: "How should the proportions of the individual components develop?" Aleš Michl answer: "In our Assets and Liabilities Committee, I will propose to, gradually over the years, increase equities from the current 16 percent of reserves to 20 percent or more. The central banks of Switzerland, Israel or large state sovereign wealth funds, led by Norway, do the same. And I will propose to have more gold, from 11 tonnes to 100 and more tonnes. Gradually, over several years. Gold is good for diversification, it has zero correlation with stocks." The 44 year old Michl has been a member of the Czech central bank board since December 2018, and will begin his 6-year term as CNB governor on 1 July 2022, after having been appointed to the role by Czech president Miloš Zeman. Aleš Michl - Incoming governor of the Czech central bank The Ekonom interview also gives some insights into how the new CNB governor thinks about managing the Czech central bank’s gold and foreign exchange reserves, with the word ‘wealth’ cropping up a number of times.     Michl - “My vision is to have a long-term profitable CNB. We are at a great loss now. I would like to set the strategy so that the expected return on assets, which are foreign exchange reserves, in the long run exceeds the cost of the central bank's liabilities, which are mainly deposits of banks that we have to pay interest on." Ekonom question: "For what reason?" Michl – “It is a vision to create a nation's wealth that exceeds my six-year term.” Elsewhere he again mentions the wealth of a nation: Michl - "Rather than predicting another devastating event, it is much easier to conclude that a country, nation, population, business or enterprise can better mitigate the effects of disasters if they have savings, wealth, rather than a pile of debt in better times. " The incoming governor does not go into detail how the about how the central bank’s expanded gold holdings will contribute to an increase in the expected return on reserves, i.e. will the new gold be actively managed (i.e. through gold loans and gold swaps) at for example, the Bank of England, or whether the gold will be held in its own vault on an allocated basis. Its not even clear where the current Czech central bank gold reserves are actually held. The annual financial report of the Bank for the year to 31 December 2021 does not specify the storage locations of any of the Bank's gold, merely stating that the gold reserves are divided into 10.2 tonnes in a  "Long-term reserve – gold placed abroad (marketable bars) and precious metals held at the Bank in the long term (bars, coins, medals)" and 0.2 tonnes in an "Operating reserve – precious metals held for the production of coins". Although previous years' editions of the same report state that some of the gold was held as short term (1 month) gold deposits, which implies gold lending (probably at the Bank of England).  Poland's gold bars in boxes begin airlifted from London to Warsaw, 2019 Czech Gold Fire Sale in 1998 - 56 tonnes Currently, the 10.9 tonnes of gold which the Czech central bank holds only represents 0.4% of its total reserves. According to the World Gold Council’s “Changes in World Official Gold Reserves” data, the Czech National Bank’s gold holdings fell by 2.9 tonnes between 2002 and 2022 (mostly due to gold in the holdings being used to mint and issue Czech gold coins), meaning that it held about 14 tonnes of gold prior to 2002. This is corroborated by the CNB’s own data, with a 2019 CNB research paper on central bank gold stating that: “The CNB sold off the bulk of its reserve gold in 1998. By this time, gold had ceased to meet the CNB’s needs in terms of liquidity, security and returns. Furthermore, the CNB needed to increase its international reserves to be able to intervene in support of the Czech koruna at times of currency turbulence. It thus sold 56 tonnes of gold, thereby gaining greater liquidity and return stability, and was left with 14 tonnes (CNB Archive, 2019).” Judging by Aleš Michl’s plan to bring the CNB gold pile back up above 100 tonnes, he is probably not too impressed with his predecessors for having sold 56 tonnes of Czech gold in 1998.       And it’s not clear why in 1998 the CNB claimed that gold “had ceased to meet the CNB’s needs in terms of liquidity, security and returns” because that is obviously a false statement, but in 2022 those very same reasons are being used to justify increasing the Czech gold holdings 10-fold. Back in the 1990s and early 2000s, a lot of central banks sold gold in circumstances which didn’t make financial sense, e.g. UK, Netherlands, Australia and Switzerland, and used equally bizarre claims to justify the sales. To this list you can add the Czech central bank in 1998. More plausible reasons for those widespread central bank gold sales in the 1990s and early 2000s may have been to either close out existing gold loans to bullion banks which had no chance of being repaid without forcing the gold price far higher, or else it was redistribution of central bank gold holdings behind the scenes from Western central banks to rising economic powers such as China, à la the Brodsky and Quaintance theory.  The Visegrád Group - Birds of a Feather In expressing a plan to increase its gold reserves by 10-fold to over 100 tonnes, the Czech central bank looks to be taking a page right out of the playbook of one of its Visegrád Group allies - Hungary. The Visegrád Group, also known as the ‘Visegrad Four’ or ‘V4’, is an economic, political, security and cultural alliance comprising the Czech Republic, Hungary, Poland and Slovakia which was formed in February 1991 in Visegrád in Hungary, during a meeting between the then president of the Czechoslovak Republic, Václav Havel, the then president of the Polish rRepublic, Lech Wałęsa, and the then prime minister of the Hungarian Republic, József Antall.   Recall that in October 2018 in a surprise move, the Hungarian central bank, Magyar Nemzeti Bank (MNB), announced that it had increased its gold reserves 10-fold from 3.1 tonnes to 31.5 tonnes. For details, see BullionStar article “In surprise move, Central Bank of Hungary announces 10-fold jump in its gold reserves”. The proposal of the incoming Czech central bank governor, Aleš Michl, to increase Czech gold reserves from 11 tonnes to more than 100 tonnes is a practical carbon copy of the Hungarian move, in terms of percentage increase (i.e. a 1000% increase, or 10-fold). Hungarian central bank gold bars arriving under heavy armed guard In 2021, the Hungarian central bank then raised the stakes further when it bought another 63 tonnes of gold bars, and in doing so tripled the its gold holdings from 31.5 tonnes to 94.5 tonnes. For details see the BullionStar article “Hungarian central bank boosts its gold reserves by 3000% in less than 3 years”. Likewise, fellow Visegrád Group member Poland sent shockwaves through the gold market when the Polish central bank announced in July 2019 that it had bought 125.7 tonnes of gold in London (100 tonnes in 2019 and 25.7 tonnes in 2018), thereby boosting its gold reserves at the time to 228.6 tonnes. See BullionStar article “Poland joins Hungary with Huge Gold Purchase and Repatriation” for further details. The Poles then promptly flew 100 tonnes of this gold from London back to Warsaw during the second half of 2019, using 8 special cargo flights that each airlifted 1,000 Good Delivery gold bars (100 tonnes in total). For further details see “Polish central bank airlifts 8000 gold bars (100 tonnes) from London to Warsaw”. The 2019 purchases were not the end of Poland’s gold buying as the Polish central bank president, Adam Glapiński, stated in October 2021 that they planned to buy an additional 100 tonnes of gold during 2022. See BullionStar article “Poland accelerates gold buying: Plans to purchase 100 tonnes during 2022” for further details. Exchange of Information According to the Visegrád Group website: “Czechia, Hungary, Poland and Slovakia have always been part of a single civilization sharing cultural and intellectual values and common roots in diverse religious traditions, which they wish to preserve and further strengthen.” “In order to preserve and promote cultural cohesion, cooperation within the Visegrad Group will enhance the imparting of values in the field of culture, education, science and exchange of information.” This “sharing of cultural and intellectual values” and “exchange of information” now appears to include the Visegrád Group countries deciding between themselves to buy vast quantities of gold bars. Hungary bought gold. Poland bought gold. And now the Czech Republic plans to buy gold. And lots of it. The Visegrád Countries - Czech Republic, Poland, Hungary and Slovakia So could Slovakia be next? Slovakia claims to hold 31.7 tonnes of monetary gold reserves, all of which is stored at the vaults of the Bank of England in London. When Poland repatriated 100 tonnes of gold from London in 2019, there were calls from a former prime minister of Slovakia, Robert Fico, that Slovakia should do likewise. But nothing came of that call. Still, it will be interesting to watch whether Slovakia announces in the future that it too has bought more gold, or plans to do so, given that all of its fellow members of the Visegrád Group – Hungary, Poland and the Czech Republic – are now big and active players in the central bank gold buying game. One major point which might prevent Slovakia buying gold is that unlike Hungary, Poland and the Czech Republic, Slokavia uses the Euro, and so has less monetary independence from the European Central Bank (ECB). Whereas each of Hungary, Poland and the Czech Republic still have their own fiat currencies, the forint, zloty, and koruna, respectively. Despite what Slovakia may or may not do, we now know there are a group of three independently-minded and strong allies in the centre of Europe, whose three central banks, namely the Czech National Bank,  Magyar Nemzeti Bank (Hungary), and Magyar Nemzeti Bank (Poland), are trail blazing a course in physical gold buying.      Conclusion When Hungary made its large gold purchase in 2021, it explained the rationale for buying in a press release, saying that gold “carries no credit or counterparty risks, [it] reinforces trust in a country in all economic environments, which still renders it one of the most crucial reserve assets worldwide”. Also that “the appearance of global spikes in government debts or inflation concerns further increase the importance of gold in national strategy as a safe-haven asset and as a store of value”. In 2021, when Polish central bank president, Adam Glapiński, announced in an interview that the bank will buy another 100 tonnes of gold during 2022, he explained the buying rationale, saying that: “gold is free from credit risk and cannot be devalued by any country’s economic policy. Besides, it is extremely durable, virtually indestructible”. He also stated that gold is a “safe-haven asset, which means that its price usually increases in conditions of increased risk, financial and political crises or other turmoil in the global markets” and that “gold is characterised by a relatively low correlation with the main asset classes – especially the US dollar – which means that including gold in the reserves reduces the financial risk in the investment process”. To the above we can add the gold buying rationale of the Czech central bank’s incoming governor Aleš Michl - “Gold is good for diversification, it has zero correlation with stocks." While a brief comment for now, Michl hasn't started the governor's job yet. But expect more in-depth comments from him on gold later this year when he actually takes up the role. Watch this space!   This article was originally published on the website under a similar title "Czech Republic to join Visegrád Group allies in Central European Gold Rush". Tyler Durden Mon, 05/30/2022 - 06:20.....»»

Category: blogSource: zerohedgeMay 30th, 2022

Deere Reports Second Quarter Net Income of $2.098 Billion

Quarterly earnings rise 17% on increase in net sales of 9%. Market conditions and industry fundamentals support continuation of robust environment. Full-year earnings forecast increased to $7.0 to $7.4 billion, including special items. MOLINE, Ill., May 20, 2022 /PRNewswire/ -- Deere & Company (NYSE:DE) reported net income of $2.098 billion for the second quarter ended May 1, 2022, or $6.81 per share, compared with net income of $1.790 billion, or $5.68 per share, for the quarter ended May 2, 2021. For the first six months of the year, net income attributable to Deere & Company was $3.001 billion, or $9.72 per share, compared with $3.013 billion, or $9.55 per share, for the same period last year. Net sales and revenues increased 11 percent, to $13.370 billion, for the second quarter of 2022 and rose 8 percent, to $22.939 billion, for six months. Net sales were $12.034 billion for the quarter and $20.565 billion for six months, compared with $10.998 billion and $19.049 billion last year. "Deere's second-quarter performance reflected a continuation of strong demand even as we face supply-chain pressures affecting production levels and delivery schedules," said John C. May, chairman and chief executive officer. "Deere employees, suppliers, and dealers are working hard to address these challenges. We are proud of their extraordinary efforts to get products to our customers as soon as possible under the challenging circumstances." Company Outlook & Summary Net income attributable to Deere & Company for fiscal 2022 is forecast to be in a range of $7.0 billion to $7.4 billion, which includes a net $220 million gain from special items in the second quarter of 2022. For further details on special items, see Note 1 of the press release financial statements. "Looking ahead, we believe demand for farm equipment will continue benefiting from positive fundamentals in spite of availability concerns and inflationary pressures affecting our customers' input costs," May said. "The company's smart industrial strategy and recently announced Leap Ambitions are focused on helping customers manage higher costs and increasingly scarce inputs, while improving their yields, through the use of our integrated technologies." Deere & Company Second Quarter Year to Date $ in millions, except per share amounts 2022 2021 % Change 2022 2021 % Change Net sales and revenues $ 13,370 $ 12,058 11% $ 22,939 $ 21,170 8% Net income $ 2,098 $ 1,790 17% $ 3,001 $ 3,013 Fully diluted EPS $ 6.81 $ 5.68 $ 9.72 $ 9.55 Results for the second quarter of 2022 and year-to-date periods of 2022 and 2021 were impacted by special items. For further details, see Note 1 of the press release financial statements.  Production & Precision Agriculture Second Quarter $ in millions 2022 2021 % Change Net sales $ 5,117 $ 4,529 13% Operating profit $ 1,057 $ 1,007 5% Operating margin 20.7% 22.2% Production and precision agriculture sales increased for the quarter due to price realization and higher shipment volumes. Operating profit rose primarily due to price realization and higher shipment volumes / sales mix. These items were partially offset by higher production costs, higher research and development and selling, administrative, and general expenses, and impairments related to events in Russia / Ukraine.   Small Agriculture & Turf Second Quarter $ in millions 2022 2021 % Change Net sales $ 3,570 $ 3,390 5% Operating profit $ 520 $ 648 -20% Operating margin 14.6% 19.1% Small agriculture and turf sales for the quarter increased due to price realization partially offset by the unfavorable impact of currency translation. Operating profit decreased primarily due to higher production costs, a less-favorable sales mix, and higher selling, administrative, and general and research and development expenses. These items were partially offset by price realization.   Construction & Forestry Second Quarter $ in millions 2022 2021 % Change Net sales $ 3,347 $ 3,079 9% Operating profit $ 814 $ 489 66% Operating margin 24.3% 15.9% Construction and forestry sales moved higher for the quarter primarily due to price realization and higher shipment volumes, partially offset by the unfavorable impact of currency translation. Operating profit increased due to a non-cash gain on the remeasurement of the previously held equity investment in the Deere-Hitachi joint venture and price realization. These items were partially offset by higher production costs, impairments related to the events in Russia / Ukraine, and a less-favorable product mix.   Financial Services Second Quarter $ in millions 2022 2021 % Change Net income $ 208 $ 222 -6% The decrease in financial services net income for the quarter was mainly due to higher reserves for credit losses related to the events in Russia / Ukraine, partially offset by income earned on a higher average portfolio. The prior year also benefited from a favorable adjustment to the provision for credit losses. Industry Outlook for Fiscal 2022 Agriculture & Turf U.S. & Canada: Large Ag Up ~ 20% Small Ag & Turf ~ Flat Europe Up ~ 5% South America (Tractors & Combines) Up ~ 10% Asia Down moderately Construction & Forestry U.S. & Canada: Construction Equipment Up ~ 10% Compact Construction Equipment Flat to Up 5% Global Forestry Flat to Up 5% Global Roadbuilding Flat to Up 5% Deere Segment Outlook for Fiscal 2022 Currency Price $ in millions Net Sales Translation Realization Production & Precision Ag Up 25 to 30% -1% +13% Small Ag & Turf Up ~ 15% -3% +8% Construction & Forestry Up 10 to 15% -2% +9% Financial Services Net Income $ 870 Financial Services. Full-year 2022 results are expected to be slightly lower than fiscal 2021 due to a higher provision for credit losses and higher selling, administrative, and general expenses. These factors are expected to be partially offset by income earned on a higher average portfolio. John Deere Capital Corporation The following is disclosed on behalf of the company's financial services subsidiary, John Deere Capital Corporation (JDCC), in connection with the disclosure requirements applicable to its periodic issuance of debt securities in the public market. Second Quarter Year to Date $ in millions 2022 2021 % Change 2022 2021 % Change Revenue $ 651 $ 675 -4% $ 1,294 $ 1,332 -3% Net income $ 159 $ 177 -10% $ 348 $ 344 1% Ending portfolio balance $ 42,543 $ 40,613 5% Results in the quarter decreased due to a higher provision for credit losses and less-favorable financing spreads, partially offset by income earned on a higher average portfolio. For the year-to-date period, net income rose mainly due to income earned on a higher average portfolio and improvement on operating-lease residual values, partially offset by a higher provision for credit losses and less-favorable financing spreads. The prior year also benefited from a favorable adjustment to the provision for credit losses. FORWARD-LOOKING STATEMENTS Certain statements contained herein, including in the sections entitled "Company Outlook & Summary," "Industry Outlook," and "Deere Segment Outlook," relating to future events, expectations, and trends constitute "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995 and involve factors that are subject to change, assumptions, risks, and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect all lines of the company's operations, generally, while others could more heavily affect a particular line of business. Forward-looking statements are based on currently available information and current assumptions, expectations, and projections about future events. Except as required by law, the company undertakes no obligation to update or revise its forward-looking statements. Further information concerning the company and its businesses, including factors that could materially affect the company's financial results, is included in the company's other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. "Risk Factors" of the company's most recent Annual Report on Form 10-K and the company's subsequent Quarterly Reports on Form 10-Q). Factors Affecting All Lines of Business All of the company's businesses and their results are affected by general economic conditions in the global markets and industries in which the company operates; customer confidence in general economic conditions; government spending and taxing; foreign currency exchange rates and their volatility, especially fluctuations in the value of the U.S. dollar; changing interest rates; inflation and deflation rates; changes in weather and climate patterns; the political and social stability of the global markets in which the company operates; the effects of, or response to, terrorism and security threats; wars and other conflicts, including the current military conflict between Russia and Ukraine; natural disasters; and the spread of major epidemics or pandemics (including the COVID-19 pandemic). Significant changes in market liquidity conditions, changes in the company's credit ratings, and any failure to comply with financial covenants in credit agreements could impact access to funding and funding costs, which could reduce the company's earnings and cash flows. Financial market conditions could also negatively impact customer access to capital for purchases of the company's products and purchase decisions, financing and repayment practices, and the number and size of customer delinquencies and defaults. A debt crisis in Europe, Latin America, or elsewhere could negatively impact currencies, global financial markets, funding sources and costs, asset and obligation values, customers, suppliers, and demand for equipment. The company's investment management activities could be impaired by changes in the equity, bond, and other financial markets, which would negatively affect earnings. Additional factors that could materially affect the company's operations, access to capital, expenses, and results include changes in, uncertainty surrounding, and the impact of governmental trade, banking, monetary, and fiscal policies, including financial regulatory reform and its effects on the consumer finance industry, derivatives, funding costs, governmental programs, policies, and tariffs for the benefit of certain industries or sectors; retaliatory actions to such changes in trade, banking, monetary, and fiscal policies; actions by central banks; actions by financial and securities regulators; actions by environmental, health, and safety regulatory agencies, including those related to engine emissions, carbon and other greenhouse gas emissions, and the effects of climate change; changes to GPS radio frequency bands or their permitted uses; changes in labor and immigration regulations; changes to accounting standards; changes in tax rates, estimates, laws, and regulations and company actions related thereto; changes to and compliance with privacy, banking, and other regulations; changes to and compliance with economic sanctions and export controls laws and regulations; and compliance with U.S. and foreign laws when expanding to new markets and otherwise. Other factors that could materially affect the company's results and operations include security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of the company and its suppliers and dealers; security breaches with respect to the company's products; production, design, and technological innovations and difficulties, including capacity and supply constraints and prices; the loss of or challenges to intellectual property rights, whether through theft, infringement, counterfeiting, or otherwise; the availability and prices of strategically sourced materials, components, and whole goods; delays or disruptions in the company's supply chain, including work stoppages or disputes by suppliers with their unionized labor; the failure of customers, dealers, suppliers, or the company to comply with laws, regulations, and company policy pertaining to employment, human rights, health, safety, the environment, sanctions, export controls, anti-corruption, privacy and data protection, and other ethical business practices; introduction of legislation that could affect the company's business model and intellectual property, such as right to repair or right to modify; events that damage the company's reputation or brand; significant investigations, claims, lawsuits, or other legal proceedings; start-up of new plants and products; the success of new product initiatives or business strategies; changes in customer product preferences and sales mix; gaps or limitations in rural broadband coverage, capacity, and speed needed to support technology solutions; oil and energy prices, supplies, and volatility; the availability and cost of freight; actions of competitors in the various industries in which the company competes, particularly price discounting; dealer practices, especially as to levels of new and used field inventories; changes in demand and pricing for used equipment and resulting impacts on lease residual values; labor relations and contracts, including work stoppages and other disruptions; changes in the ability to attract, develop, engage, and retain qualified personnel; acquisitions and divestitures of businesses; greater-than-anticipated transaction costs; the integration of acquired businesses; the failure or delay in closing or realizing anticipated benefits of acquisitions, joint ventures, or divestitures; the inability to deliver precision technology and agricultural solutions to customers; and the failure to realize anticipated savings or benefits of cost reduction, productivity, or efficiency efforts. COVID-19 Uncertainties related to the continued effects of the COVID-19 pandemic have adversely affected and may continue to affect the company's business and outlook. These uncertainties include, among other things: the duration and impact of any resurgence in COVID-19; disruptions in the supply chain, including those caused by industry capacity constraints, material availability, and global logistics delays and constraints arising from, among other things, the transportation capacity of ocean shipping containers, and continued disruptions in the operations of one or more key suppliers, or the failure of any key suppliers; an increasingly competitive labor market due to a sustained labor shortage or increased turnover caused by the COVID-19 pandemic; the sustainability of the economic recovery from the pandemic remains unclear and significant volatility could continue for a prolonged period. Agricultural Equipment Operations The company's agricultural equipment operations are subject to a number of uncertainties, including certain factors that affect farmers' confidence and financial condition. These factors include demand for agricultural products; world grain stocks; soil conditions; harvest yields; prices for commodities and livestock; crop and livestock production expenses; availability of fertilizer; availability of transport for crops; trade restrictions and tariffs; global trade agreements; the level of farm product exports; the growth and sustainability of non-food uses for some crops (including ethanol and biodiesel production); real estate values; available acreage for farming; changes in government farm programs and policies; international reaction to such programs; changes in and effects of crop insurance programs; changes in environmental regulations and their impact on farming practices; animal diseases and their effects on poultry, beef, and pork consumption and prices on livestock feed demand; and crop pests and diseases. Production and Precision Agriculture Operations The production and precision agriculture operations rely in part on hardware and software, guidance, connectivity and digital solutions, and automation and machine intelligence. Many factors contribute to the company's precision agriculture sales and results, including the impact to customers' profitability and/or sustainability outcomes; the rate of adoption and use by customers; availability of technological innovations; speed of research and development; effectiveness of partnerships with third parties; and the dealer channel's ability to support and service precision technology solutions. Small Agriculture and Turf Equipment Factors affecting the company's small agriculture and turf equipment operations include customer profitability; labor supply; consumer borrowing patterns; consumer purchasing preferences; housing starts and supply; infrastructure investment; spending by municipalities and golf courses; and consumable input costs. Construction and Forestry Factors affecting the company's construction and forestry equipment operations include consumer spending patterns; real estate and housing prices; the number of housing starts; interest rates; commodity prices such as oil and gas; the levels of public and non-residential construction; and investment in infrastructure. Prices for pulp, paper, lumber, and structural panels affect sales of forestry equipment. John Deere Financial The liquidity and ongoing profitability of John Deere Capital Corporation and the company's other financial services subsidiaries depend on timely access to capital in order to meet future cash flow requirements, and to fund operations, costs, and purchases of the company's products. If general economic conditions deteriorate or capital markets become more volatile, funding could be unavailable or insufficient. Additionally, customer confidence levels may result in declines in credit applications and increases in delinquencies and default rates, which could materially impact write-offs and provisions for credit losses.   DEERE & COMPANYSECOND QUARTER 2022 PRESS RELEASE(In millions of dollars) Unaudited Three Months Ended Six Months Ended May 1 May 2  % May 1 May 2  % 2022 2021 Change 2022 2021 Change Net sales and revenues:    Production & precision ag net sales $ 5,117 $ 4,529 +13 $ 8,473 $ 7,599 +12    Small ag & turf net sales 3,570 3,390 +5 6,201 5,904 +5    Construction & forestry net sales 3,347 3,079 +9 5,891 5,546 +6    Financial services revenues 864 892 -3 1,734 1,776 -2    Other revenues 472 168 +181 640 345 +86      Total net sales and revenues $ 13,370 $ 12,058 +11 $ 22,939 $ 21,170 +8 Operating profit: *    Production & precision ag $ 1,057 $ 1,007 +5 $ 1,353 $ 1,651 -18    Small ag & turf 520 648 -20 891 1,117 -20    Construction & forestry 814 489 +66 1,085 756 +44    Financial services 279 295 -5 577 553 +4      Total operating profit 2,670 2,439 +9 3,906 4,077 -4 Reconciling items ** (111) (119) -7 (195) (226) -14 Income taxes (461) (530) -13 (710) (838) -15      Net income attributable to Deere & Company $ 2,098 $ 1,790 +17 $ 3,001 $ 3,013 *      Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains or losses. **      Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests.   DEERE & COMPANYSTATEMENTS OF CONSOLIDATED INCOMEFor the Three Months Ended May 1, 2022 and May 2, 2021(In millions of dollars and shares except per share amounts) Unaudited 2022 2021 Net Sales and Revenues Net sales $ 12,034 $ 10,998 Finance and interest income 796 809 Other income 540 251    Total 13,370 12,058 Costs and Expenses Cost of sales 8,918 7,928 Research and development expenses 453 377 Selling, administrative and general expenses 932 838 Interest expense 187 268 Other operating expenses 328 335    Total 10,818 9,746 Income of Consolidated Group before Income Taxes 2,552 2,312 Provision for income taxes 461 530 Income of Consolidated Group 2,091 1,782 Equity in income of unconsolidated affiliates 6 8 Net Income 2,097 1,790    Less: Net loss attributable to noncontrolling interests (1) Net Income Attributable to Deere & Company $ 2,098 $ 1,790 Per Share Data Basic $ 6.85 $ 5.72 Diluted $ 6.81 $ 5.68 Dividends declared $ 1.05 $ .90 Dividends paid $ 1.05 $ .76 Average Shares Outstanding Basic 306.2 312.8 Diluted 308.1 315.2 See Condensed Notes to Interim Consolidated Financial Statements.   DEERE & COMPANYSTATEMENTS OF CONSOLIDATED INCOMEFor the Six Months Ended May 1, 2022 and May 2, 2021(In millions of dollars and shares except per share amounts) Unaudited 2022 2021 Net Sales and Revenues Net sales $ 20,565 $ 19,049 Finance and interest income 1,595 1,644 Other income 779 477     Total 22,939 21,170 Costs and Expenses Cost of sales 15,613 13,734 Research and development expenses 855 743 Selling, administrative and general expenses 1,713 1,607 Interest expense 417 538 Other operating expenses 638 708     Total 19,236 17,330 Income of Consolidated Group before Income Taxes 3,703 3,840 Provision for income taxes 710 838 Income of Consolidated Group 2,993 3,002 Equity in income of unconsolidated affiliates 8 12 Net Income 3,001 3,014     Less: Net income attributable to noncontrolling interests 1 Net Income Attributable to Deere & Company $ 3,001 $ 3,013 Per Share Data Basic $ 9.78 $ 9.62 Diluted $ 9.72 $ 9.55 Dividends declared $ 2.10 $ 1.66 Dividends paid $ 2.10 $ 1.52 Average Shares Outstanding Basic 306.8 313.1 Diluted 308.8 315.6 See Condensed Notes to Interim Consolidated Financial Statements.   DEERE & COMPANYCONDENSED CONSOLIDATED BALANCE SHEETS(In millions of dollars) Unaudited May 1 October 31 May 2  2022 2021 2021 Assets Cash and cash equivalents $ 3,878 $ 8,017 $ 7,182 Marketable securities 682 728 668 Trade accounts and notes receivable - net 6,258 4,208 6,158 Financing receivables - net 34,085 33,799 30,994 Financing receivables securitized - net 4,073 4,659 4,107 Other receivables 2,306 1,765 1,504 Equipment on operating leases - net 6,465 6,988 7,108 Inventories 9,030 6,781 6,042 Property and equipment - net 5,715 5,820 5,704 Goodwill 3,812 3,291 3,190 Other intangible assets - net 1,352 1,275 1,310 Retirement benefits 3,059 3,601 951 Deferred income taxes 1,104 1,037 1,724 Other assets 2,280 2,145 2,337 Total Assets $ 84,099 $ 84,114 $ 78,979 Liabilities and Stockholders' Equity Liabilities Short-term borrowings $ 12,413 $ 10,919 $ 9,911 Short-term securitization borrowings 4,006 4,605 4,106 Accounts payable and accrued expenses 12,679 12,348 10,682 Deferred income taxes 584 576 533 Long-term borrowings 32,447 32,888 33,346 Retirement benefits and other liabilities 2,964 4,344 5,305     Total liabilities 65,093 65,680 63,883 Redeemable noncontrolling interest 99 Stockholders' Equity Total Deere & Company stockholders' equity 18,904 18,431 15,092 Noncontrolling interests 3 3 4    Total stockholders' equity 18,907 18,434 15,096 Total Liabilities and Stockholders' Equity $ 84,099 $ 84,114 $ 78,979 See Condensed Notes to Interim Consolidated Financial Statements.    DEERE & COMPANYSTATEMENTS OF CONSOLIDATED CASH FLOWSFor the Six Months Ended May 1, 2022 and May 2, 2021(In millions of dollars) Unaudited 2022 2021 Cash Flows from Operating Activities Net income $ 3,001 $ 3,014 Adjustments to reconcile net income to net cash provided by (used for) operating activities:    Provision (credit) for credit losses 45 (24)    Provision for depreciation and amortization 933 1,054    Impairment charges 77 50    Share-based compensation expense 44 45    Gain on remeasurement of previously held equity investment (326)    Undistributed earnings of unconsolidated affiliates (2) 11    Provision (credit) for deferred income taxes 37 (213)    Changes in assets and liabilities:      Trade, notes, and financing receivables related to sales (1,535) (1,124)      Inventories (2,265) (1,193)      Accounts payable and accrued expenses (443) 318      Accrued income taxes payable/receivable (139) 54      Retirement benefits (1,020) (5)    Other (169) (201)      Net cash provided by (used for) operating activities (1,762) 1,786 Cash Flows from Investing Activities Collections of receivables (excluding receivables related to sales) 11,190 10,367 Proceeds from sales of equipment on operating leases 1,035 1,011 Cost of receivables acquired (excluding receivables related to sales) (11,971) (11,359) Acquisitions of businesses, net of cash acquired (473) (19) Purchases of property and equipment (346) (320) Cost of equipment on operating leases acquired (1,004) (764) Collateral on derivatives – net (248) (255) Other (71) (48)      Net cash used for investing activities (1,888) (1,387) Cash Flows from Financing Activities Increase in total short-term borrowings 812 212 Proceeds from long-term borrowings 4,298 3,967 Payments of long-term borrowings (3,625) (3,157) Proceeds from issuance of common stock.....»»

Category: earningsSource: benzingaMay 20th, 2022

Is The Global Debt Bubble About To Burst?

Is The Global Debt Bubble About To Burst? Authored by Gail Tverberg via Our Finite World blog, Is the debt bubble supporting the world economy in danger of collapsing? The years between 1981 and 2020 were very special years for the world economy because interest rates were generally falling: Figure 1. Yields on 10-year and 3-month US Treasuries, in a chart made by the Federal Reserve of St. Louis, as of May 10, 2022. In some sense, falling interest rates meant that debt was becoming increasingly affordable. The monthly out-of-pocket expense for a new $500,000 mortgage was falling lower and lower. Automobile payments for a new $30,000 vehicle could more easily be accommodated into a person’s budget. A business would find it more affordable to add $5,000,000 in new debt to open at an additional location. With these beneficial effects, it would be no surprise if a debt bubble were to form. With an ever-lower cost of debt, the economy has had a hidden tailwind pushing it long between 1981 to 2020. Now that interest rates are again rising, the danger is that a substantial portion of this debt bubble may collapse. My concern is that the economy may be headed for an incredibly hard landing because of the inter-relationship between interest rates and energy prices (Figure 2), and the important role energy plays in powering the economy. Figure 2. Chart showing the important role Quantitative Easing (QE) to lower interest rates plays in adjusting the level of “demand” (and thus the selling price) for oil. Lower interest rates make goods and services created with higher-priced oil more affordable. In addition to the items noted on the chart, US QE3 was discontinued in 2014, about the time of the 2014 oil price crash. Also, the debt bubble crash of 2008 seems to be the indirect result of the US raising short term interest rates (Figure 1) in the 2004 to 2007 period. In this post, I will try to explain my concerns. [1] Ever since civilization began, a combination of (a) energy consumption and (b) debt has been required to power the economy. Under the laws of physics, energy is required to power the economy. This happens because it takes the “dissipation” of energy to perform any activity that contributes to GDP. The energy dissipated can be the food energy that a person eats, or it can be wood or coal or another material burned to provide energy. Sometimes the energy dissipated is in the form of electricity. Looking back, we can see the close relationship between total energy consumption and world total GDP. Figure 3. World energy consumption for the period 1990 to 2020, based on energy data from BP’s 2021 Statistical Review of World Energy and world Purchasing Power Parity GDP in 2017 International Dollars, as published by the World Bank. The need for debt or some other approach that acts as a funding mechanism for capital expenditures (sale of shares of stock, for example), comes from the fact that humans make investments that will not produce a return for many years. For example, ever since civilization began, people have been planting crops. In some cases, there is a delay of a few months before a crop is produced; in other cases, such as with fruit or nut trees, there can be a delay of years before the investment pays back. Even the purchase by an individual of a home or a vehicle is, in a sense, an investment that will offer a return over a period of years. With all parts of the economy benefiting from the lower interest rates (except, perhaps, banks and others lending the funds, who are making less profit from the lower interest rates), it is easy to see why lower interest rates would tend to stimulate new investment and drive up demand for commodities. Commodities are used in great quantity, but the supply available at any one time is tiny by comparison. A sudden increase in demand will tend to send the commodity price higher because the quantity of the commodity available will need to be rationed among more would-be purchasers. A sudden decrease in the demand for a commodity (for example, crude oil, or wheat) will tend to send prices lower. Therefore, we see the strange sharp corners in Figure 2 that seem to be related to changing debt levels and higher or lower interest rates. [2] The current plan of central banks is to raise interest rates aggressively. My concern is that this approach will leave commodity prices too low for producers. They will be tempted to decrease or stop production. Politicians are concerned about the price of food and fuel being too high for consumers. Lenders are concerned about interest rates being too low to properly compensate for the loss of value of their investments due to inflation. The plan, which is already being implemented in the United States, is to raise interest rates and to significantly reverse Quantitative Easing (QE). Some people call the latter Quantitative Tightening (QT). The concern that I have is that aggressively raising interest rates and reversing QE will lead to commodity prices that are too low for producers. There are likely to be many other impacts as well, such as the following: Lower energy supply, due to cutbacks in production and lack of new investment Lower food supply, due to inadequate fertilizer and broken supply lines Much defaulting debt Pension plans that reduce or stop payments because of debt-related problems Falling prices of stock Defaults on derivatives [3] My analysis shows how important increased energy consumption has been to economic growth over the last 200 years. Energy consumption per capita has been growing during this entire period, except during times of serious economic distress. Figure 4. World energy consumption from 1820-2010, based on data from Appendix A of Vaclav Smil’s Energy Transitions: History, Requirements and Prospects and BP Statistical Review of World Energy for 1965 and subsequent. Wind and solar energy are included in “Biofuels.” Figure 4 shows the amazing growth in world energy consumption between 1820 and 2010. In the early part of the period, the energy used was mostly wood burned as fuel. In some parts of the world, animal dung was also used as fuel. Gradually, other fuels were added to the mix. Figure 5. Estimated average annual increase in world energy consumption over 10-year periods using the data underlying Figure 4, plus similar additional data through 2020. Figure 5 takes the same information shown in Figure 4 and calculates the average approximate annual increase in world energy consumption over 10-year periods. A person can see from this chart that the periods from 1951-1960 and from 1961-1970 were outliers on the high side. This was the time of rebuilding after World War II. Many families were able to own a car for the first time. The US highway interstate system was begun. Many pipelines and electricity transmission lines were built. This building continued into the 1971-1980 period. Figure 6. Same chart as Figure 5, except that the portion of economic growth that was devoted to population growth is shown in blue at the bottom of each 10-year period. The amount of growth in energy consumption “left over” for improvement in the standard of living is shown in red. Figure 6 displays the same information as Figure 5, except that each column is divided into two pieces. The lower (blue) portion represents the average annual growth in population during each period. The part left over at the top (in red) represents the growth in energy consumption that was available for increases in standard of living. Figure 7. The same information displayed in Figure 6, displayed as an area chart. Blue areas represent average annual population growth percentages during these 10-year periods. The red area is determined by subtraction. It represents the amount of energy consumption growth that is “left over” for growth in the standard of living. Captions show distressing events during periods of low increases in the portion available to raise standards of living. Figure 7 shows the same information as Figure 6, displayed as an area chart. I have also shown some of the distressing events that happened when growth in population was, in effect, taking up essentially all of energy consumption growth. The world economy could not grow normally. There was a tendency toward conflict. Strange events would happen during these periods, including the collapse of the central government of the Soviet Union and the restrictions associated with the COVID pandemic. The economy is a self-organizing system that behaves strangely when there is not enough inexpensive energy of the right types available to the system. Wars tend to start. Layers of government may disappear. Strange lockdowns may occur, such as the current restrictions in China. [4] The energy situation at the time of rising interest rates in the 1960 to 1980 period was very different from today. If we define years with high inflation rates as those with inflation rates of 5% or higher, Figure 8 shows that the period with high US inflation rates included nearly all the years from 1969 through 1982. Using a 5% inflation cutoff, the year 2021 would not qualify as a high inflation rate year. Figure 8. US inflation rates, based on Table 1.1.4 Price Index for Gross Domestic Product, published by the US Bureau of Economic Analysis. It is only when we look at annualized quarterly data that inflation rates start spiking to high levels. Inflation rates have been above 5% in each of the four quarters ended 2022-Q1. Trade problems related to the Ukraine Conflict have tended to add to price pressures recently. Figure 9. US inflation rates, based on Table 1.1.4 Price Index for Gross Domestic Product, published by the US Bureau of Economic Analysis. Underlying these price spikes are increases in the prices of many commodities. Some of this represents a bounce back from artificially low prices that began in late 2014, probably related to the discontinuation of US QE3 (See Figure 2). These prices were far too low for producers. Coal and natural gas prices have also needed to rise, as a result of depletion and prior low prices. Food prices are also rising rapidly, since food is grown and transported using considerable quantities of fossil fuels. The main differences between that period leading up to 1980 and now are the following: [a] The big problem in the 1970s was spiking crude oil prices. Now, our problems seem to be spiking crude oil, natural gas and coal prices. In fact, nuclear power may also be a problem because a significant portion of uranium processing is performed in Russia. Thus, we now seem to be verging on losing nearly all our energy supplies to conflict or high prices! [b] In the 1970s, there were many solutions to the crude oil problem, practically right around the corner. Electricity production could be switched from crude oil to coal or nuclear, with little problem, apart from building the new infrastructure. US cars were very large and fuel inefficient in the early 1970s. These could be replaced with smaller, more fuel-efficient vehicles that were already being manufactured in Europe and Japan. Home heating could be transferred to natural gas or propane, to save crude oil for places where energy density was really needed. Today, we are told that a transition to green energy is a solution. Unfortunately, this is mostly wishful thinking. At best, a transition to green energy will need a huge investment of fossil fuels (which are increasingly unavailable) over a period of at least 30 to 50 years if it is to be successful. See my article, Limits to Green Energy Are Becoming Much Clearer. Vaclav Smil, in his book Energy Transitions: History, Requirements and Prospects, discusses the need for very long transitions because energy supply needs to match the devices using it. Furthermore, new energy types are generally only add-ons to other supply, not replacements for those supplies. [c] The types of economic growth in (a) the 1960 to 1980 period and (b) the period since 2008 are very different. In the earlier of these periods (especially prior to 1973), it was easy to extract oil, coal and natural gas inexpensively. Inflation-adjusted oil prices of less than $20 per barrel were typical. An ever-increasing supply of this oil seemed to be available. New machines (created with fossil fuels) made workers increasingly efficient. The economy tended to “overheat” if interest rates were not repeatedly raised (Figure 1). While higher interest rates could be expected to slow the economy, this was of little concern because rapid growth seemed to be inevitable. The supply of finished goods and services made by the economy was growing rapidly, even with headwinds from the higher interest rates. On the other hand, in the 2008 to 2020 period, economic growth is largely the result of financial manipulation. The system has been flooded with increasing amounts of debt at ever lower interest rates. By the time of the lockdowns of 2020, would-be workers were being paid for doing nothing. World production of finished goods and services declined in 2020, and it has had difficulty rising since. In the first quarter of 2022, the US economy contracted by -1.4%. If headwinds from higher interest rates and QT are added, the economic system is likely to encounter substantial debt defaults and increasing breakdowns of supply lines. [5] Today’s spiking energy prices appear to be much more closely related to the problems of the 1913 to 1945 era than they are to the problems of the late 1970s. Looking back at Figure 7, our current period is more like the period between the two world wars than the period in the 1970s that we often associate with high inflation. In both periods, the “red” portion of the chart (the portion I identify with rising standard of living), has pretty much disappeared. In both the 1913 to 1945 period and today, it is nearly all the energy supplies other than biofuels that are disappearing. In the 1913 to 1945 period, the problem was coal. Mines were becoming increasingly depleted, but raising coal prices to pay for the higher cost of extracting coal from depleted mines tended to make the coal prohibitively expensive. Mine operators tried to reduce wages, but this was not a solution either. Fighting broke out among countries, almost certainly related to inadequate coal supplies. Countries wanted coal to supply to their citizens so that industry could continue, and so that citizens could continue heating their homes. Figure 10. Slide prepared by Gail Tverberg showing peak coal estimates for the UK and for Germany. As stated at the beginning of this section, today’s problem is that nearly all our energy supplies are becoming unaffordable. In some sense, wind and solar may look better, but this is because of mandates and subsidies. They are not suitable for operating the world economy within any reasonable time frame. There are other parallels to the 1913 to 1945 period. One of the big problems of the 1930s was prices that would not rise high enough for farmers to make a profit. Oil prices in the United States were extraordinarily low then. BP 2021 Statistical Review of World Energy reports that the average oil price in 1931, in 2020 US$, was $11.08. This is the lowest inflation-adjusted price of any year back to 1865. Such a price was almost certainly too low for producers to make a profit. Low prices, relative to rising costs, have recently been problems for both farmer and oil producers. Another major problem of the 1930s was huge income disparity. Wide income disparity is again an issue today, thanks increased specialization. Competition with unskilled workers in low wage countries is also an issue. It is important to note that the big problem of the 1930s was deflation rather than inflation, as the debt bubble started popping in 1929. [6] If a person looks only at the outcome of raising interest rates in the 1960s to 1980 timeframe, it is easy to get a misleading idea of the impact of increased interest rates now. If people look only at what happened in the 1980s, the longer-term impact of the spike in interest rates doesn’t seem too severe. The world economy was growing well before the interest rates were raised. After the peak in interest rates, the world economy generally continued to grow. As a result of the high oil prices and the spiking interest rates, the world hastened its transition to using a bit less crude oil per person. Figure 11. Per capita crude oil production from 1973 through 2021. Crude oil amounts are from international statistics of the US Energy Information Administration. Population estimates are from UN 2019 population estimates. The low population growth projection from the UN data is used for 2021. At the same time, the world economy was able to expand the use of other energy products, at least through 2018. Figure 12. World per capita total energy supply based on data from BP’s 2021 Statistical Review of World Energy. World per capita crude oil is based on international data of the EIA, together with UN 2019 population estimates. Note that crude oil data is through 2021, but total energy amounts are only through 2020. Since 2019, our problem has been that the total energy supply has not been keeping up with the rising population. The cost of extraction of all kinds of oil, coal and natural gas keeps rising due to depletion, but the ability of customers to afford the higher prices of finished goods and services made with those energy products does not rise to match these higher costs. Energy prices probably would have spiked in 2020 if it were not for COVID-related restrictions. Production of oil, coal and natural gas has not been able to rise sufficiently after the lockdowns for economies to fully re-open. This is the primary reason for the recent spiking of energy prices. Turning to inflation rates, the relationship between higher interest rates (Figure 1) and annual inflation rates (Figure 8) is surprisingly not very close. Inflation rates rose during the 1960 to 1973 period despite rising interest rates, mostly likely because of the rapid growth of the economy from an increased per-capita supply of inexpensive energy. Figure 8 shows that inflation rates did not come down immediately after interest rates were raised to a high level in 1980, either. There was a decline in the inflation rate to 4% in 1983, but it was not until the collapse of the central government of the Soviet Union in 1991 that inflation rates have tended to stay close to 2% per year. [7] A more relevant recent example with respect to the expected impact of rising interest rates is the impact of the increase in US short-term interest rates in the 2004 to 2007 period. This led to the subprime debt collapse in the US, associated with the Great Recession of 2008-2009. Looking back at Figure 1, a person can see the effect of raising short-term interest rates in the 2004 to 2007 era. This eventually led to the Great Recession of 2008-2009. I wrote about this in my academic paper, Oil Supply Limits and the Continuing Financial Crisis, published in the journal Energy in 2010. The situation we are facing today is much more severe than in 2008. The debt bubble is much larger. The shortage of energy products has spread beyond oil to coal and natural gas, as well. The idea of raising interest rates today is very much like going into the Great Depression and deciding to raise interest rates because bankers don’t feel like they are getting an adequate share of the goods and services produced by the economy. If there really aren’t enough goods and services for everyone, giving lenders a larger share of the total supply cannot work out well. [8] The problems we are encountering have been hidden for many years by an outdated understanding of how the economy operates. Because of the physics of the economy, it behaves very differently than most people assume. People almost invariably assume that all aspects of the economy can “stay together” regardless of whether there are shortages of energy or of other products. People also assume that shortages will be immediately become obvious through high prices, without realizing the huge role interest rates and debt levels play. People further assume that these spiking prices will somehow bring about greater supply, and the whole system will go on as before. Furthermore, they expect that whatever resources are in the ground, which we have the technical capability to extract, can be extracted. It is important to note that prices are not necessarily a good indicator of shortages. Just as a fever can have many causes, high prices can have many causes. The economy can only continue as long as all of its important parts continue. We cannot assume that reported reserves of anything can really be extracted, even if the reserves have been audited by a reliable auditor. What actually can be extracted depends on prices staying high enough to generate funds for additional investment as required. The amount that can be extracted also depends on the continuation of international supply lines providing goods such as steel pipe. The continued existence of governments that can keep order in the areas where extraction is to take place is important, as well. What we should be most concerned about is a very rapidly shrinking economic system that cannot accommodate very many people. It seems that such a situation might occur if the debt bubble is popped and too many supply lines are broken. There may be a time lag between when interest rates are raised and when the adverse impacts on the economy are seen. This is a reason why central bankers should be very cautious about the increases in interest rates they make as well as QT. The situation may turn out much worse than planned! Tyler Durden Thu, 05/19/2022 - 19:20.....»»

Category: worldSource: nytMay 20th, 2022

Here"s Why AK-47 Ammo Could Shoot To The Moon

Here's Why AK-47 Ammo Could Shoot To The Moon Submitted by The Machine Gun Nest (TMGN)., 7.62x39, which many may know as a standard Russian caliber, famously used by the AK47, will be much more expensive soon, along with many other Russian calibers. Here's why. In August 2021, the administration announced a ban on Russian ammunition imports, which accounts for almost 40% of ammunition in the US Market, according to industry insiders.  Steph with TMGN gives some background on the Russian Ammo Ban:  The reason behind the ban? An Aug. 20, 2020 poisoning of a Russian opposition leader, Alexei Navalny. Almost a full year later, the Biden admin (after failing to push gun control through the legislative process) decided to cut a significant supply of ammunition into the United States. Although current imports that were approved before the ban's passage will continue, no new import will be approved thanks to the Biden administration. So once those ammunition shipments are sold, there will be no restock. To make matters worse, Russian ammo accounts for many of the more budget-friendly brands of ammo in the US Market. This import ban is, of course, an attempt to price gun owners out of being able to enjoy their 2nd amendment right. This backdoor gun control has become all too common for Biden, who, even during his recent announcement of the new "ghost gun rule," mentioned his "regulatory authority" in subverting Congress and governing via executive fiat. Naturally, after the import ban was announced, prices for popular Russian calibers like 7.62x39, 5.45x39, and 7.62x54R shot up from their already high pandemic pricing. But, as current pre-approved imports continue, the price has come down slightly. As of Apr. 8, 2022, the Biden admin has now raised a 32.3% duty on all imports from Russia and Belarus thanks to the aptly named "Suspending Normal Trade Relations with Russia and Belarus Act," or HR 7108 for short. This duty increase was confirmed to TMGN by a representative of Barnaul Ammunition. The 32.3% raise itself comes from HR 7108, making Russia & Belarus ineligible for the "most-favored-nation" tariff rates that the United States currently applies to imports from WTO member countries. How does this affect Russian Ammo imports, you might ask? Well, because this new law applies to all current imports, we can expect the price to increase dramatically on all Russian ammo still on its way to the US Market. Most components needed for ammunition production are trading at a much higher value than in years past. As supply tightens and prices increase through duties and taxes, we will see a significant increase in cost to the consumer. Additionally, this cost increase is compounded by the current commodities shock, supply chain issues, and more. Hopefully, in the future, US companies will start to produce these calibers in larger quantities or find a friendly nation overseas to import from. As of right now, our advice is to grab this ammo while you can. Tyler Durden Tue, 05/03/2022 - 23:25.....»»

Category: blogSource: zerohedgeMay 4th, 2022

Elon Musk discusses the war in Ukraine and the importance of nuclear power — and why Benjamin Franklin would be "the most fun at dinner"

Tesla CEO Elon Musk spoke with Axel Springer CEO Mathias Döpfner for an interview following the opening of the Gigafactory in Berlin. Mathias Döpfner speaks with Elon Musk at Tesla's Gigafactory in Berlin.Jason HenryMathias Döpfner, the CEO of Insider's parent company, Axel Springer, recently met with Tesla CEO Elon Musk for an interview for Welt Am Sonntag. The interview took place at Tesla's Gigafactory in Berlin, which Musk officially opened on Tuesday, and the men discussed Russia's invasion into Ukraine, space travel, and what makes human beings special. You can read a transcript of the conversation below.Mathias Döpfner: Before we talk about the future, let's look at the present. There is war in Europe. If you see the horrible images of Putin's troops invading Ukraine, killing people. What are your thoughts?Elon Musk: It is surprising to see that in this day and age. I thought we had sort of moved beyond such things for the most part. It is concerning. If you can get away with it, then this will be a message to other countries that perhaps they could get away with it too.Döpfner: Have you been surprised by Putin's behavior? I mean, I remember the discussions in the recent weeks when most of the Europeans thought he is not going to do it. A lot of Americans were convinced he is going to invade. What was your expectation?Musk: My best guess was that he would seek to capture the Eastern third of the country. Frankly, if you just listened to the rhetoric, then it is clear that he was going after at least portions of Ukraine that have a significant percentage of Russian speakers. He did that already in Georgia.Döpfner: In a way, if you listen carefully to dictators, they very often say what they want to do. You just had to take it seriously.Musk: Yeah. They are not subtle.Döpfner: But so far, there is a possibility that Putin achieves pretty much the opposite of what he wants to achieve. He wants to disentangle America from Europe. He wants to weaken NATO. So far, he has strengthened NATO. He has united the west. It is almost a bipartisan topic that unites democracies and open societies. With regard to the long-term outcome, are you rather pessimistic that it is going to strengthen Putin and thus, paving the way for other examples like China or elsewhere? Or are you more optimistic that it could be a turning point for a different security policy of the West?Musk: I do think this will strike the West. I suppose of course that people realize, maybe we should not have all these internal squabbles when there are more serious threats.Döpfner: Volodymyr Zelenskyy put it very clearly. "I need ammunition, not a ride". Europe, particularly Germany, struggled a long time. How about the American government?Musk: I think the American government has done more than people may realize. But it is just not been very public. But it is important to do something serious. We cannot let Putin take over Ukraine. This is crazy.Döpfner: Parts of the world, particularly Europe, have learned the wrong lesson from the Third Reich and the Holocaust. And that lesson is: no military intervention ever again. Trying not to get involved. Now, there is the opportunity that we learned the real lesson, and that is never ever racism, never ever genocides and never ever appeasement.Musk: Appeasement obviously did not work against Hitler. And how much better would the world had been if they had stopped him early. Better for everyone.Döpfner: You did something very concrete, 48 hours, upon the request of the digital minister of Ukraine. And that was delivering Starlink material in order to grant internet access. What was the motivation, and how is it developing?Musk: We did think that Starlink might be needed, and we took some preemptive actions to ensure that it could be provided quickly. When the request came, we acted very rapidly. It is worth noting that the satellite internet connectivity of Ukraine was taken offline by a cyberattack on the day of the invasion permanently. The cell towers are either being blown up or they are being jammed. There is a major fiber backbone which the Russians are aware of. It was quite likely that they will sever that fiber link. This would leave Ukraine with very few connections open. So Starlink might be, certainly in some parts of Ukraine, the only connection.Döpfner: What happens if the Russians and Chinese are targeting satellites? Is that also a threat for Starlink?Musk: It was interesting to view the Russian anti-satellite demonstration a few months ago in the context of this conflict. Because that caused a lot of strife for satellite operators. It even had some danger for the space station, where there are Russian cosmonauts. So why did they do that? It was a message in advance of the Ukraine invasion. If you attempt to take out Starlink, this is not easy because there are 2000 satellites. That means a lot of anti-satellite missiles. I hope we do not have to put this to a test, but I think we can launch satellites faster than they can launch anti-satellites missiles.Döpfner: Russia said that they are going to stop the delivery of rocket engines. Is that a threat or an opportunity for SpaceX?Musk: At SpaceX, we design and manufacture our own rocket engines. So we did not really own any Russian components at all.Döpfner: Is it dangerous for the United States of America?Musk: Boeing and Lockheed have strongly relied on the Russian RD-180 Engine. Which I should say, to be fair, is a great engine. They are hoping to move away from that in the future with engines from Blue Origin. There is also the Antares which uses the RD-180, I believe. They will not be able to fly as a result.Döpfner: With knowledge, products and services, Elon Musk is almost a strategic weapon in modern warfare. How do you see your role in that context?Musk: I think I can be helpful in conflicts. I try to take a set of actions that are most likely to improve the probability that the future will be good. And obviously sometimes I make mistakes in this regard. I do whatever I think is most likely to ensure that the future is good for humanity. Those are the actions that I will take.Döpfner: A couple of months ago we had an exchange about Ernst Jüngers famous book "Storm of Steel". You were very fascinated by that book, which has been published roughly a hundred years ago, about Jüngers experiences in the First World War. Why is that book so important for you?Musk: I read a lot of books, and for some reason I am fascinated by war and history in general. It is not just history of war, but just history in general. Jüngers book is an excellent personal account of World War One. The lesson taken from that book is we don't ever want to do that again.Döpfner: There is a big controversy around that book. Some people are saying this is glorifying war...Musk: It is definitely not!Döpfner: …It is rather positive nor negative. It is just describing what happened in a terrible way.Musk: Nobody is reading that book and says, I want to do that too. For me, it is just fascinating to read about history. I mean, learn the lessons of history, such that we do not repeat the mistakes of the past.Döpfner: History doesn't repeat itself, but it rhymes. And we see a rhyme these days. Back to the big strategic picture. The terrible actions of Putin are, to a certain degree, also a result of strategic mistakes that Europe, particularly Germany, has made, the dropout of nuclear energy in 2011.Musk: It is very important that Germany will not shut down its nuclear power stations. I think this is extremely crazy.Döpfner: If we really want to reduce Putin's power as well as Europe's and Germany's dependence on Russian energy, we have to decarbonize. It's the only way. Is more nuclear energy the key to free ourselves from dictators and autocrats like Putin.Musk: I want to be super clear. You should not only not shut down the nuclear power plants, but you should also reopen the ones that have already shut down. Those are the fastest to produce energy. It is crazy to shut down nuclear power plants now, especially if you are in a place where there are no natural disasters. If you are somewhere where severe earthquakes or tsunamis occur, it is more of a question mark. If there is no massive natural disaster risk-which Germany does not have-then there is really no danger with the nuclear power plants.Döpfner: Aren't there any safer alternatives that could have a similar effect? Solar and wind won't do it. Do you have any other ideas in mind about future energy policy?Musk: I think long term, most of civilization's energy is going to come from solar, and then you need to store it with battery because obviously the sun only shines during the day, and sometimes it is very cloudy. So you need solar batteries. That will be the main long-term way that civilization is powered. But between now and then, we need to maintain nuclear. I can't emphasize that enough. This is total madness to shut them down. I want to be clear, total madness.Döpfner: Let's see whether this very clear words are heard in Germany.Musk: I would say this is a national security risk.Döpfner: How is the climate issue going to look like in 15 years? Better than today?Musk: From a sustainable energy standpoint, much better.Döpfner: So we are going to solve this problem?Musk: Yes, absolutely. We will solve the climate issue. It is just a question of when. And that is like the fundamental goal of Tesla.Döpfner: You once said that the decrease of birth rate is one of the most underestimated problems of all the times. Why?Musk: Most people in the world are operating under the false impression that we've got too many people. This is not true. The birth rate has been dropping like crazy. Unfortunately, we have these ridiculous population estimates from the UN that need to be updated because they just don't make any sense. Just look at the growth rate last year. See how many kids were born and multiply that by the life expectancy. I would say that is how many people will be alive in the future. And then say, is the trend for birth rate positive or negative? It is negative. That is the best case, unless something changes for the birth rate.Döpfner: That is also why we need alternatives. You have recently presented Optimus, a human robot, and shared great expectations, what that could do for the world. I assume it is not only about the first visit to Mars that could be done by Optimus, but it might also be a game changer in AI. Could you share this vision?Musk: With respect to AI and robotics, of course, I see things with some trepidation. Because I certainly don't want to have anything that could potentially be harmful to humanity. But humanoid robots are happening. Look at Boston Dynamics. They do better demonstrations every year. The rate of advancement of AI is very rapid.Döpfner: Concretely, Optimus is going to be used in Tesla factories. That is one of the use cases, but what is the broader use case beyond Tesla?Musk: Optimus is a general purpose, sort of worker-droid. The initial role must be in work that is repetitive, boring, or dangerous. Basically, work that people don't want to do.Döpfner: Why has Optimus two legs? Just because it looks like a human being, or is it more practical? I thought four legs were better.Musk: Haha, four legs good, two legs bad. Kind of reminds me of Orwell. Humanity has designed the world to interact with a bipedal humanoid with two arms and ten fingers. So if you want to have a robot fit in and be able to do things that humans can do, it must be approximately the same size and shape and capability.Döpfner: Do you think that Optimus is going to play a role in our daily life, helping us in the household and things like that?Musk: Yes. A general focused humanoid.Döpfner: The prototype is going to be ready by the end of this year. When is it a product that can be mass marketed?Musk: I think we will have something pretty good at the prototype level this year, and it might be ready for at least a moderate volume production towards the end of next year.Döpfner: You said the potential is bigger than the potential of Tesla. If that is true, then it must be really a mass market product. But anyway, Optimus is also an answer to the problem of dropping birth rates. If we have not enough human people, we need more bots to get work done.Musk: Optimus will be helpful with respect to dropping growth rates. But if these things continue, then what happens? Humanity dies out. Is that what we want?Döpfner: Or replaced by artificial intelligence. Human beings powered by Neuralink.Musk: Neuralink in the short term is just about solving brain injuries, spinal injuries and that kind of thing. So for many years Neuralink's products will just be helpful to someone who has lost the use of their arms or legs or has just a traumatic brain injury of some kind. That is what Neuralink will be useful for many years.Döpfner: Could you imagine that one day we would be able to download our human brain capacity into an Optimus?Musk: I think it is possible.Döpfner: Which would be a different way of eternal life, because we would download our personalities into a bot.Musk: Yes, we could download the things that we believe make ourselves so unique. Now, of course, if you're not in that body anymore, that is definitely going to be a difference, but as far as preserving our memories, our personality, I think we could do that.Döpfner: The Singularity moment that the inventor and futurist Ray Kurzweil has, I think, predicted for 2025 is approaching fast. Is this timeline still realistic?Musk: I'm not sure if there is a very sharp boundary. I think it is much smoother. There is already so much compute that we outsource. Our memories are stored in our phones and computers with pictures and video. Computers and phones amplify our ability to communicate, enabling us to do things that would have been considered magical. Now you can have two people have a video call basically for free on opposite sides of the world. It's amazing. We've already amplified our human brains massively with computers. It could be an interesting ratio to roughly calculate the amount of compute that is digital, divided by the amount of compute that is biological. And how does that ratio change over time. With so much digital compute happening so fast, that ratio should be increasing rapidly.Döpfner: Talking about speed, you have the vision that one day, Starship could be able to get from A to B in 30 minutes all around the globe. Is that correct? It's like a global super taxi. You can just go from San Francisco to Nairobi?Musk: The landing will be loud. So you would probably be connecting cities that are next to oceans or seas. So you can land far enough offshore that the landing noise is not disturbing to peopleDöpfner: Coast to coast would be a realistic option?Musk: Yes, it is like an intercontinental rocket.Döpfner: You have solved so many problems of mankind and presented so many solutions. I'm surprised that one topic does not seem to fascinate you as much: Longevity. A significantly increased life span. Why aren't you passionate about that? Aren't you personally interested in living longer?Musk: I don't think we should try to have people live for a really long time. That it would cause asphyxiation of society because the truth is, most people don't change their mind. They just die. So if they don't die, we will be stuck with old ideas and society wouldn't advance. I think we already have quite a serious issue with gerontocracy, where the leaders of so many countries are extremely old. In the US, it's a very, very ancient leadership. And it is just impossible to stay in touch with the people if you are many generations older than them. The founders of the USA put minimum ages for a local office. But they did not put maximum ages because they did not expect that people will be living so long. They should have. Because for a democracy to function, the leaders must be reasonably in touch with the bulk of the population. And if you're too young or too old, you can't say that you will be attached.Döpfner: Is there a kind of ideal, maximum age? How old would you like to get?Musk: I think for political leadership, you want to be ideally within 10 or at least, 20 years of the average age of the population. And for me, I certainly would like to maintain health for a longer period of time. But I am not afraid of dying. I think it would come as a relief.Döpfner: You may not be able to see the vision of SpaceX come true in your life?Musk: I would like to live long enough to see that.Döpfner: How do you feel, being - at a net worth of USD 260 billion roughly - perceived as the richest person on earth?Musk: I do think that Putin is significantly richer than me.Döpfner: You really do?Musk: Yeah.Döpfner: Do you know John Law?Musk: No.Döpfner: John Law used to be the richest person on earth 300 years ago. He was a Scottish guy and lived in the end 17th century and the early 18th century. He was a gambler, 'un homme à femmes', then a very successful investor, and financial engineer. He was the biggest art collector on earth. He created a stock market bubble in France through a rush behind the shares of the Mississippi company. And was ultimately the reason for one of the first financial crises. John Law used to own roughly 30% of the United States of America then. In the end, he went bankrupt. Did you ever think about what would happen if something were to go wrong and you were to lose everything?Musk: There have been many times when I expected to lose everything. Who starts a car company and a rocket company expecting them to succeed? Certainly not me. I had less than 10 percent chance of success. After the third failure of SpaceX in 2008, I knew that if the fourth launch failed, SpaceX would be dead. We had no money for the fifth launch. Tesla's been on the verge of bankruptcy many times. We even closed on the last day of the financing round in 2008. Remember, back then General Motors and Chrysler had gone bankrupt and Ford was on the brink of it. So, imagine trying to raise money for an electric car startup while General Motors was going bankrupt. People were very angry that I even asked. But we were able to raise just enough money to squeak by. And closed the financial round for Tesla on the last hour of the last possible day in 2008. Christmas Eve. Had we not closed the round then, we would have gone bankrupt two days after Christmas.Döpfner: Elon Musk is not only an entrepreneur, he is also a philanthropist. What are the goals of your foundation?Musk: I do want to emphasize that SpaceX and Tesla fundamentally intend to improve the quality of the future. Especially in terms of usefulness to humanity. Tesla by accelerating sustainable energy. And SpaceX by making multiplanetary intercourse possible. This is more than I can do myself. When it comes to donations, I'd say it is very difficult to give away money effectively. If you care about the reality of doing good and not the perception of doing good, then it is very hard to give away money effectively. I care about reality. Perception be damned. So, there's obviously environmental causes, there is education, especially science and engineering education. Pediatric healthcare. Hunger these days is more of a political and logistics problem than it is not having enough food. There is a lot of food. In the US and many countries, the issue is more obesity than it is hunger. So, I'm always looking for ways to give away money that are effective.Döpfner: If you google Elon Musk, I think you would have more than 200 million search results and nearly 80 million Twitter followers. You are definitely one of the most popular people on earth. Is popularity a pleasure or a liability for you?Musk: It makes it difficult to go buy coffee at the corner. It is hard to go around places, or at least be able to just go to the store or walk down the street. Now it is quite difficult to do that.Döpfner: It reminds me a bit of a former chancellor of Germany, Helmut Kohl, who once told me, you cannot imagine how terrible it is to go into a restaurant and everybody recognizes you, comes to your table, asks you for an autograph. That is terrible. There is only one thing in life that is worse. And that is: if nobody comes to your table anymore.Musk: Hahaha. I just try to find a corner table that is in a dimly light or something, where I can stay out of the way.Döpfner: Is there anything that you most urgently want to achieve?Musk: In the short run, and the most pressing is completing full self-driving, so that we have full self-driving operating at a substantially safer level than humans. Basically, it comes down to solving the problem of real world AI. That consumes a lot of my mind. And getting the starship to work. Not only getting it to orbit but achieving rapid reusability - which is really the holy grail of rocketry that is necessary for humanity to become a multiplanet species. And I think those things might happen this year.Döpfner: Anything that you really would like to achieve, which you think is going to be impossible?Musk: Impossible is a strong word.Döpfner: You don't like that word.Musk: It's a strong word. I approach things from a physics standpoint and the word impossible is more or less banned in physics. I'm really worried about this birthrate thing. That's been troubling me for many years, because I just don't see it turning around. Every year it's worse. And I drive my friends crazy with this.Döpfner: Walter Isaacson is planning your biography. He has written about the lives of Albert Einstein, Steve Jobs, Benjamin Franklin, and Leonardo DaVinci. Among the four, with whom would you like to meet and have a glass of wine?Musk: I would be honored to meet any of them. I think Benjamin Franklin would be the most fun at dinner.Döpfner: And who is the one you think you are closest to? Would it be Leonardo DaVinci?Musk: I am pretty different. But it might actually be Benjamin Franklin. He did a lot of science and engineering. DaVinci wrote a book, seeing himself first and foremost as an engineer. Actually, in his application for the position that eventually enabled him to create all of the art, it was all about his engineering ideas. Just in the end, he mentioned doing some art. I think it's funny that DaVinci really thought of himself as an engineer. But he was pretty impressive for his time.Döpfner: You said that you cannot be alone. I very much share that feeling. Where does it come from?Musk: I think it's just a natural human reaction.Döpfner: A lot of people are happy if they are alone.Musk: Really? I think most people are not happy being alone.Döpfner: Do you feel lonely?Musk: I mean, there are times when I feel lonely, yes.Döpfner: Because you cannot find people with whom you like to share your feelings and thoughts? You are one of the most popular and looked after persons on earth. Everybody wants to speak with you. But it seems not to work.Musk: There are times when I'm lonely. I'm sure there are times when everyone is lonely. But it's pretty basic. Say if I'm working on the starship rocket and I'm just staying in my little house by myself, especially if my dog is not with me, then I feel quite lonely because I'm just in a little house by myself with no dog.Döpfner: What is your biggest fear?Musk: What are the existential threats that humanity faces? I spent a lot of time talking about the birthrate thing. That might be the single biggest threat to the future of human civilization. And then there's the concern of artificial intelligence going wrong. I think religious extremism is another concern.Döpfner: What is your biggest hope?Musk: My biggest hope is that humanity creates a self-sustaining city on Mars.Döpfner: You have once said, if I'm not in love, I cannot be happy. Are you happy at the moment?Musk: I think there are degrees of love. But certainly, for one to be fully happy, I think you have to be happy at work and happy in love. So, I suppose I'm medium happy.Döpfner: Can love for projects, for work, compensate for love among people?Musk: I tried to be as literal as possible. I would be happy if humanity has a self-sustaining city on Mars because then, probable lifespan of humanity is much greater. I think we really just got this little candle of consciousness, like a small light in the void. And we do not want this small candle in the darkness to be put out.  Read the original article on Business Insider.....»»

Category: worldSource: nytMar 26th, 2022

The Actual Impact Of Bitcoin On War

The Actual Impact Of Bitcoin On War Authored by Matthew Pines via, The impact of Bitcoin on war will not simply be the eradication of violence, a problem of humanity since the dawn of time... As bitcoin has appreciated and seen increased global adoption, it has emerged as a macroeconomically relevant phenomenon. This has turned formerly theoretical debates into live, practical questions on how Bitcoin will affect geopolitical relations. The current balance of global power is defined by complex arrangements of military alliances, trade flows, ethnic and religious affinity, cultural influence, linguistic agreement, and, of course, national borders. In this author’s view, it is hubris to expect Bitcoin to singularly override or sweep away the accumulated weight and historical inertia of this tightly-bound matrix of interlinked forces. Of course, it is tempting to smooth over this irreducible complexity and hypothesize a “saved” world, where bitcoin is that “one weird trick” to fix all that’s wrong with human civilization. This temptation to “immanentize the eschaton” is common among totalizing belief systems and becomes an emotionally attractive picture of the future, especially in an era where formerly trusted verities of common belief are losing their stabilizing force. And yet, we can still, and increasingly must, analyze the question of violence – especially state violence – in a future world order where Bitcoin is a major, if not the dominant, economic and political force. Some reason that Bitcoin will positively adjust the calculus of violence by which states decide how and where to project power and secure their respective interests. By shifting a large portion of national wealth from easily seized and vulnerable tangible assets into digital form, the incentives to violent conflict – as a means of confiscating this wealth – are substantially reduced. This moves the locus of inter-state conflict from the battlefield to the global, competitive mining market. Real wars become hash wars, and the negative externalities of the former (death and destruction) are replaced by the positive externalities of the latter (energy efficient computation and power generation). While this is well-reasoned and accords with the likely directional influence of Bitcoin on state competition, it is overly simplistic and incomplete. For human conflict exists on a spectrum: from soft power influence and psychological operations (psyops), gray zone subversion, and deniable covert action or sabotage to more overt forms of military violence via stand-off strikes, large-scale invasion, and (in the escalatory limit) all-out nuclear war. To claim Bitcoin will usher in an era of enduring world peace is to argue that it will eliminate all of these long-enduring sources and methods of human conflict. It is possible it will, but there are contrary forces at play that must not be overlooked. Considering the full set of relevant factors, a more reasonable thesis to hold is one in which Bitcoin may constrain certain forms of large-scale, expensive conventional war, but may not (on net) materially reduce human conflict or substantially constrain state violence. One can argue that all property claims, when it comes down to it, are enforced via violence or the threat thereof. (Bracket off for now the strong anthropological evidence, especially in human prehistory, that it is possible for communal social arrangements to endure with group-rights to “property,” though it remains an open question how durable these arrangements are as populations scale and cultural heterogeneity erodes the informal norms and coherence of group identity which mitigates violent dispute.) If Bitcoin succeeds in transposing most property claims from a vulnerable physical form to a more easily protected digital bearer asset, then one may argue that bitcoin removes one potent locus of physical violence from the world: physical property. However, even if one holds that all physical property claims are inherent or latent sources of violence, this doesn’t imply that all sources of human violence (namely, war) result from conflict over physical property. So even if Bitcoin succeeds in reducing one driver of war, one may not feel confident in the claim that Bitcoin fixes all, or even the dominant, drivers of war. I) Bitcoin reduces the state budget for war … but warfighting technology improvements will give states (and everyone else) “more for less” (partly because of bitcoin). One important, and little remarked-upon, factor is a corollary of Jeff Booth’s thesis (well-articulated in his book, ”The Price Of Tomorrow”) on the deflationary impact of technology. Much recent technological progress – especially in computational hardware, machine learning/artificial intelligence, resilient network communications, quantum computation, robotics/unmanned systems, 3D manufacturing, biological synthesis, propulsion systems, novel energetics, space launch and surveillance , among others – is being driven by and for military applications. The implication of Jeff Booth’s thesis (which has been borne out to date) is that just as technology drives exponential progress in consumer goods and services getting better and cheaper, so will the warfighter get “more for less.” More problematic, however, is that this will likely result in a proliferation of advanced technology that “democratizes” violence and distributes powerful capabilities to a broad range of human actors, with their use increasingly unconstrained by rules of engagement, Geneva Conventions, or deterrence considerations. One can imagine a world that has fully adopted a Bitcoin standard, but in which zero-day exploits in critical enterprise software and industrial control systems are found and deployed by teenage Minecraft players, autonomous drone-swarms are built and launched by hobbyists for a few hundred dollars, a disaffected postdoc cooks up synthetic viruses in his garage laboratory, and AI-bot armies execute continuous psyops campaigns against target populations. Further, as Jeff Booth has argued, Bitcoin’s natural alignment with these deflationary forces may accelerate technological progress, which while certainly positive for civilization at large, will likely have these kinds of spillover effects. At a different scale, once bitcoin becomes a globally-adopted neutral reserve asset, protection of domestic mining operations tightly integrated into energy grids becomes a national security issue. While mining firms within each nation will likely be regulated into coopetitive arrangements that dissuade disorderly sabotage, no such constraints will exist between states. In the zero-sum battle for the next nonce (and assuming the combination block reward and fee reflect the state of global adoption), the incentive to undercut one’s global competition will be large. This will manifest first in sophisticated corporate espionage and sabotage operations, likely involving the same sorts of firms which now hire armies of ex-intelligence and military professionals to conduct all sorts of unsavory activities around the world. As is the case with strategically important industries today, these types of activities tend to fuse with state intelligence services. Bitcoin mining may become a strategically important industry, if not the most important such industry in the most geopolitically powerful and relevant nations. Thus, it should not be surprising if we come to see state intelligence agencies brought into service to protect domestic mining operations and develop offensive capabilities to threaten their global competitors. Given the interconnection of these mining operations with regional energy production and grid networks, this will compound the existing risks states face in protecting against cyberattacks and disruption to critical infrastructure. States (and/or their deniable proxies) will find and exploit vulnerabilities in each other’s mining and national Bitcoin operations, which may range from executing sophisticated supply chain attacks that compromise competitor ASICs, to outright physical or cyber-enabled sabotage. This will set off an increasingly expensive game to relocate and protect one’s domestic mining infrastructure. However, the lessons from the current spate of cyber-incidents is that the offense is inherently advantaged over defense in these types of digital environments. It could be the case that the direct, substantial incentive that Bitcoin provides energy owners to protect their networks will finally focus attention on basic cyber-hygiene, insider-threat mitigation, and effective business continuity activities, but this is more a hope than a rational expectation. While beyond the scope of this essay to fully analyze, it is plausible that bitcoin, if adopted as the primary global neutral reserve asset, will constrain (but not eliminate) most forms of national debt finance. Note that it is likely that before it reaches equilibrium adoption as a unit of account (which could be a very long ways away), bitcoin will spend a substantial period of time as a reserve asset (taking increasingly dominant share of similar assets) in its store of value function and somewhat as a medium of exchange vehicle to settle large balances between institutions and governments and in jurisdictions which have adopted it as legal tender. In such a period, there are reasons to believe that large states will still find willing creditors for their national debt (denominated in local currency or, more likely, USD), subject to collateral conditions relating to that nation’s (provable) bitcoin reserve. Such creditors will assess the default risk of such sovereigns in a similar manner as today (and as throughout history), and will take the nation’s bitcoin reserve, its taxing ability, fiat currency acceptability, and extant geopolitical position as factors to consider when lending out their own bitcoin to help these governments’ finance expenditures beyond their existing fiscal balance. Note that this will likely be a much more constrained form of debt finance than we currently see, though it is hard to estimate this precisely. It most likely would not be sufficient to enable states to debt-finance large-scale, conventional wars involving mass mobilization, extensive heavy armaments, and protracted deployments, let alone decades-long occupations or “nation-building” imperial misadventures. Even if one doubts the above argument and believes that Bitcoin will absolutely bind governments to self-fund entirely via tax arrangements subject to revised social contracts delimiting the scope of such spending, war likely won’t disappear. This is because war (especially in the form near-future technology will enable) may not be that expensive to prosecute. As we saw above, the exponential effect of technological deflation (partly enabled by bitcoin shifting investor time preference and raising the hurdle rate for productive capital investment) will accelerate the trend already underway to radically cheap, but asymmetrically effective weapons. National defense strategies (among the most geopolitically significant states) will plausibly evolve towards a barbell strategy that combines irregular warfare capabilities with nuclear deterrence. The most expensive parts of national defense budgets derive from having to pay, train, equip, supply, transport, and provide medical benefits to human soldiers, and to construct manned platforms (e.g., aircraft carrier battlegroups) to project violent force. The next few decades will see a shift towards autonomous and unmanned weapons systems and cyber-enabled electronic warfare to deny, disrupt, and destroy similar adversary systems. Humans will be reserved for the special operations and irregular warfare activities in the broadening “gray zone” of state conflict that sits just below the threshold of overt peer-on-peer war. One perverse effect of the very power of nuclear weapons is the creation of deterrence voids for non-nuke threshold conflict, especially in deniable or gray-zone domains. As the capabilities to cheaply execute effective operations in these domains increases, the incentive to do so, while knowing the nuclear threshold sits high above, will be strong for many states. One can imagine revanchist regimes or those disposed to take special advantage of newly affordable weapons systems to prosecute long-awaited grievances or secure what they may see as marginal, and increasingly perishable, military superiority. For example, the 2020 Nagorno-Karabakh war saw Azerbaijan combine drone technology and long-range sensors to direct precision fires that dominated the battlefield and decisively tipped the scales in a decades-long conflict. These capabilities would have been out of reach just a few years ago, but were made affordable to such a small state by the deflationary impact of technological progress. It’s possible that even the relatively minimal costs of sustaining these forms of asymmetric capabilities will outweigh their benefit (priced in bitcoin, even). But this seems unlikely, especially if the technology deflation continues to make them ever cheaper, and while the world remains a contested, finite geography riven by historically embedded lines of division and political heterogeneity. II) States will likely continue to sustain and expand world-ending nuclear capabilities, even under a Bitcoin standard, merely as a result of the locked-in logic of deterrence. The one military technology where states are likely to be less cost sensitive are nuclear weapons. Despite the hopes of disarmament activists decades running, this particular genie isn’t going back in the bottle. The existential consequences of nuclear weapons will continue to hang like a sword of Damocles over humanity until we reach some (as yet unenvisioned) plane of enlightenment that ushers in enduring global accord. Until that time, we will require that states invest whatever is necessary in order to maintain extremely secure and reliable nuclear command, control, and communications (NC3) systems. It isn’t too much of a stretch to call the U.S. government (to take one example) as a form of nuclear monarchy. While our constitution vests the Commander in Chief (CiC) executive powers over the armed forces, it formally remands the authority to declare war with the Congress. While presidents have found various ways around this particular constraint, they still feel compelled to come to Congress to receive the political dispensation offered by “authorizations to use military force.” The time-scales of nuclear war, however, render all of that moot. Given the precious few minutes between launch detection and detonation, the CiC is given sole and unchallenged authority to issue counter-strike orders, able to select from a menu of pre-selected target packages (defined in the Single Integrated Operational Plan). This nuclear SIOP is designed explicitly to convince our nuclear adversaries that a devastating retaliatory strike is guaranteed, a deterrence logic captured by the dictum of mutually assured destruction. The fraught stability of this system courted catastrophe several times during the Cold War, and that era was comparatively simple from a game-theoretic perspective. As more (and less stable) states continue to nuclearize, the dynamics of multi-party deterrence becomes dangerously unpredictable. Further, technology is pushing the capability envelope, from dial-a-yield “tactical” weapons (e.g., the U.S. B61 bomb) to mega-weapons (e.g., Russia's Status-6 unmanned nuclear torpedo with a potentially 100MT payload), as well as novel delivery platforms like hypersonic glide vehicles and fractional orbital bombardment systems (like that recently demonstrated by China). Now, you may be asking why this excursion on nuclear weapons. Well, if the question at issue is the degree to which Bitcoin may constrain state violence, and war in particular, it seems to me absolutely imperative to recognize the deeply embedded present system of nuclear deterrence. Such a structure – which places the power of world-ending violence in the hands of individual political leaders – isn’t likely to change anytime soon (no matter what happens with Bitcoin). Humble Bitcoiners must reconcile themselves to this unfortunate reality, and hope that the enlightened Bitcoiner leaders of the future will dedicate themselves to reinvigorate the failed non-proliferation, denuclearization, and arms-reduction efforts of our current politicians. III) Bitcoin fixes a lot of things, but war is unlikely to be one of them (at least for the foreseeable future). More fundamentally, human conflict isn't always (or even mostly) motivated to directly seize monetary wealth. We fight each other for many reasons, including over scarce assets (e.g., water rights, agricultural land, minerals, rare earth metals, oil, and natural geographic features like ports, navigable waterways, straits, etc.), ethnic, tribal, or religious enmity, national pride or honor, domestic political wagging-of-the-dog, or just because of some individual leader’s mania or even group collective insanity. While humans are capable of some wondrous things, our capacity for violence and destruction (especially against our own self-considered and “rational” interest) is legion. In the "long-run," one can, possibly, envision a utopia of abundance where all conceivable axes of human conflict have been eliminated or mitigated. But this seems so far off as to distract from the more likely practical scenarios we must navigate in the decades ahead. Bitcoin as a bearer asset presents immense benefits as well as security challenges for individual holders. These will scale with the scale of adoption. It will be hard to steal a nation's or a large corporation’s bitcoin, but not impossible, and the incentives to try will be large. Right now, national governments substantially invest in securing domestic critical infrastructure – especially the financial system and its centralized, interconnected digital ledgers – from cyberattack, insider exploitation, theft, sabotage, and natural hazard disruption. Bitcoin’s ledger needs no such protection thanks to the geographic distribution, scale-free self-healing network structure, and endogenous incentives of miners (bracket off the 51% attack arguments here), but our keys do. If you don't believe the combined intelligence and defense capabilities of the world's (remaining, likely most powerful) states will not invest in forms of violence, compellence, theft, sabotage, and manipulation to undercut their rival's economic stability, I encourage more "adversarial thinking." Conclusion The precise outlines of the future state of geopolitical competition in a Bitcoin standard are hard to foresee. Exactly how the incentives of Bitcoin mining and national reserve adoption may affect the calculus of inter-state violence is unknowable. Still, we can reason and explore the parameter space of possibilities given present conditions and projected trends. There are good reasons to believe that Bitcoin may reduce the incentive for large-scale, conventional war and imperial-style occupations. At the same time, such forms of state violence may become outmoded regardless of Bitcoin due to the dramatic improvement in weapons technology to asymptotically project power with relatively little cost. Further, the posture of nuclear forces – and the taught logic of deterrence we rely on to prevent their use – will likely be entirely unchanged by Bitcoin (at least for the foreseeable future). Where does this leave us on the question of Bitcoin and war? Unfortunately, I’m not optimistic that it will fundamentally alter the strategic balance of geopolitical forces in such a way as to substantially reduce the likelihood of destructive state conflict. This is no fault of Bitcoin, which promises a great reformation and improvement in many critical aspects of our civilization. Rather, this is merely a statement that, for all its power, Bitcoin is unlikely to change (in our lifetimes, at least) inherent aspects of the human condition, existing as we are on a finite planet, burdened by the frailties of nature and our fraught history. Bitcoin is a net good for humanity, and especially good for those states that recognize its virtues before others. Bitcoin fixes a lot of things, and these should be explained clearly and proclaimed proudly, to all who wish to hear. For all its promise however, Bitcoin is unlikely to fix war. Until it does, stay humble and stack sats. Tyler Durden Fri, 01/21/2022 - 21:00.....»»

Category: blogSource: zerohedgeJan 21st, 2022

Raytheon (RTX) Wins $250M Deal for StromBreaker Bomb

Raytheon (RTX) is set to provide design, development, integration, test and production engineering for changes to the SDB II production baseline. Raytheon Technologies Corp.’s RTX business segment, the Missiles and Defense unit, recently won a contract, involving the integrated engineering change proposal for the StormBreaker Small Diameter Bomb II (SDB II). The award has been offered by the Air Force Life Cycle Management Center, Eglin Air Force Base, FL.Valued at $250 million, the contract is projected to be completed by Aug 22, 2027. Per the deal, Raytheon will provide design, development, integration, test and production engineering for changes to the SDB II GBU-53/B technical and production baseline.Work related to this deal will be performed in Tucson, AZ.Advantages of the StormBreaker BombRaytheon Technologies' SDB II enables warfighters to hit moving targets in all-weather conditions, especially when the visibility is limited. SDB-II is capable of three modes: a millimeter-wave radar that detects and tracks targets through all weather, imaging infrared for improved target discrimination and a semi-active laser to track lasers in the air or on the ground. Further, the weapon can fly more than 45 miles to strike mobile targets.What's Favoring Raytheon Technologies?Increasing geopolitical tensions across the globe have prompted nations to strengthen their defense systems manifold. With rapid technological upgrades, missile defense has been playing a pivotal role in a nation's defense strategy. To this end, Raytheon Technologies' Missiles & Defense unit secures significant awards from the United States as well as international customers due to its high-end, combat-proven arsenals. The latest contract win is a testament to that.The U.S. fiscal 2022 defense budget proposal provisioned $20.4 billion for investments in missile defense. This should enable Raytheon Technologies to clinch more contracts, like the latest one, related to various missile defense systems and associated services.Growth ProspectsPer Mordor Intelligence, the missiles and missile defense systems market is estimated to register a CAGR of more than 10% between 2020 and 2025. The growing conflicts between various countries and the increasing number of investments being made by nations in missile defense systems are expected to drive the market. This, in turn, is likely to create solid growth opportunities for Raytheon, a prominent missile maker.Major missile makers like Northrop Grumman NOC, Lockheed Martin LMT and General Dynamics GD are also expected to benefit, considering the aforementioned growth prospects of the missiles and missile defense market.Northrop is a prominent developer of missile systems and counter systems, including strategic deterrents as well as subsystems and components. To strengthen its position in the missile market, Northrop acquired Orbital ATK in 2018, which used to be one of the industry leaders in providing missile components across the air-, sea and land-based systems.Northrop reported third-quarter 2021 earnings of $6.63 per share, which surpassed the Zacks Consensus Estimate by 11.8%. NOC stock has rallied 25.8% in the past year.Lockheed’s Missiles and Fire Control business unit develops, manufactures and supports advanced combat missiles and rockets for military customers, including the U.S. Army, Navy, Air Force, Marine Corps, NASA and dozens of foreign allies. Some of its prominent products include the PAC-3 missile as well as the Terminal High Altitude Area Defense missile.Lockheed’s third-quarter 2021 adjusted earnings of $6.66 per share surpassed the Zacks Consensus Estimate by a whopping 239.8%. LMT boasts a long-term earnings growth rate of 3.6%.General Dynamics’ Ordnance and Tactical Systems is the system integrator of the 2.75-inch Hydra-70 family of rockets. It also produces composite rocket motor cases and launch tubes for tactical and strategic missiles.General Dynamics’ third-quarter 2021 earnings of $3.07 per share from continuing operations surpassed the Zacks Consensus Estimate by 3.4%. GD stock has rallied 37.6% in the past year.Price MovementIn the past year, Raytheon Technologies’ shares have surged 20.3% compared with the industry’s 9.1% growth.Image Source: Zacks Investment ResearchZacks RankRaytheon Technologies currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lockheed Martin Corporation (LMT): Free Stock Analysis Report Northrop Grumman Corporation (NOC): Free Stock Analysis Report General Dynamics Corporation (GD): Free Stock Analysis Report Raytheon Technologies Corporation (RTX): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacksDec 27th, 2021

Transcript: John Doerr

   The transcript from this week’s, MiB: John Doerr, Kleiner Perkins, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This… Read More The post Transcript: John Doerr appeared first on The Big Picture.    The transcript from this week’s, MiB: John Doerr, Kleiner Perkins, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have, yes, an extra special guest, John Doerr of the famed venture capital firm Kleiner Perkins is here to discuss all things venture capital and climate related. He has a new book out that’s really quite interesting. We talk about everything from crypto to Tesla to beyond me, to all of the opportunities that exist in order to help moderate and reduce carbon in the atmosphere and the potential climate crisis that awaits us if we don’t change our ways. So, Doerr is a venture capitalist. He invests money in order to generate a return. These aren’t just finger-wagging-be-green-for-green sake. He describes their venture fund which they put nearly a billion dollars into it 10 years ago and now, it’s worth over three billion. That’s how successful the returns have been. He describes the climate crisis as a multitrillion dollar opportunity. Yes, we need to do something in order to make sure we leave our children and grandchildren a habitable Earth. At the same time, there is a massive opportunity in everything from food to electrical grid, to transportation, on and on and on. It really is quite fascinating somebody like him sees the world from both perspectives, from the, hey, we want to make sure we have a habitable place to live but he can’t take off his VC hat and he sees just massive opportunities to do well by doing good. Really, a fascinating conversation. With no further ado, my interview with Kleiner Perkins’ John Doerr. ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: My extra special guest this week is John Doerr. He is the famed venture capitalists known for his work at Kleiner Perkins Caufield & Byers. The venture capital firm operates 32 funds. They’ve made more than 675 investments, including such early-stage funding for companies like Google, Twitter, Amazon and too many others to list. Doerr still holds a substantial stake in his initial investment in Google. His most recent book is “Speed & Scale: An Action Plan for Solving our Climate Crisis Now.” John Doerr, welcome to Bloomberg. JOHN DOERR, CHAIRMAN, KLEINER PERKINS: It’s thrilled to be here with you, Barry. Thank you. RITHOLTZ: And I’m thrilled to talk to you. Let’s go back to the early parts of your career before we start to get current. You originally joined Intel because you couldn’t land a gig as a venture capitalist. Tell us a little bit about that. DOERR: I came to Silicon Valley with no job, no place to live and incidentally, no girlfriend. The lady I’ve been dating decided I was too persistent and dumped me. So, I — my real goal was to win my way back into her heart and to join with some friends to start a company. I wanted to start a company and I heard that venture capital had something to do with that. So, I cold called all the venture capitalists and some of them returned my call in the mid-70s and they looked at my experience and uniformly included that I should go get a real job. That was their advice. I remember Dick Gramley (ph) said, we just backed a small new chip company called Intel, why don’t you interview for a job there, and I did. And lo and behold, unbeknownst to me, my former girlfriend, Ann Howland, now Ann Howland Doerr, has gotten a job at Intel. I got a job there and when I arrived that first summer day, I was surprised to see her there and she was not happy to see me. So, it took the rest of the summer to put our relationship back together again. But I love Intel, it was a dynamic place. They just invented the microprocessor and I’ve seriously considered abandoning my graduate education in business as it turns out to just stay at Intel. But I returned there after graduating and worked for, I guess, four or five years helping democratize computing as to get microprocessors used in everything from traffic lights to defibrillators, to nuclear resonance magnetic imaging systems, and it was all because I wanted to be part of new rapidly growing companies. RITHOLTZ: How did you work your way from Intel to venture investing? How did you find your way to Kleiner Perkins? DOERR: I got a phone call one day from a friend who said, hey, John, I just finished interviewing for job at a venture capital firm, Kleiner Perkins Caufield & Byers. It sounded to me like a law firm. I really didn’t know them. But he said, you should go interview there because what they want to add to their team is someone younger professional with a strong technical background, a good network in Silicon Valley, and a passion for startups. I think you and they would make a great fit. So, I didn’t — they ran an ad actually in the “Wall Street Journal” for this position which I didn’t see. But I called up, I interviewed and got a job there as an entry level professional, a gofer, I did everything. I carried people’s bags. I read business plans. But there was one important condition that I had and that is I made them promise that they would back me with my friends in starting a company. I went to work there because, honestly, I wasn’t interested in venture capital. I wanted to be an early ’80s entrepreneur. And they had — they agreed to that and pointed out that they had backed other young partners at Kleiner in writing business plans. Bob Swanson had written a business plan for Genentech that led to the whole biotech industry and Jimmy Treybig had done the same thing with Tandem Computers. My current partner, Brook Byers as the young partner at Kleiner wrote the business plan for hybrid tech. So, Eugene Kleiner and Tom Perkins were unusual and I’d even say mythic or epic figures in that they had technical backgrounds. They started their own companies and they felt that was part of what their venture capital firm ought to do. RITHOLTZ: So, here’s the key question, how come you never left Kleiner Perkins? Why didn’t you launch your own startup? DOERR: Well, I did. They backed me in doing it. The first was one called Silicon Compilers. I became the full-time CEO and founder of that with a Cal Tech professor, Carver Mead. RITHOLTZ: Sure. DOERR: Then as I worked with companies like Compaq, Sun Microsystems, they were growing really rapidly, I realized I was not at all qualified to advise these entrepreneurs. So, I took another 18-month leave of absence from Kleiner to run the desktop division of Sun and almost left Kleiner permanently to do that. But Ann and I wanted to start a family and she said, you know, you’re doing this Sun thing and keeping involved in Kleiner, it’s just not going to work, we have to make some choices here. And so, I left my operating role at Sun. But never gave up an interest in starting new companies and did that again at a later time with a company called @Home. You may remember that they … RITHOLTZ: Sure. DOERR: … standardized and commercialized the cable modem to access the Internet. Before the @Home venture, access to the Internet was really very slow and cable modem swept the United States and our company was key in making that happen. RITHOLTZ: So, I like this quote from you, “If you can’t invent the future, the next best thing is to fund it.” And so, I guess that helps to explain your move from Sun over back to Kleiner Perkins. DOERR: Exactly. It was Alan Kay, the Chief Scientist at Apple, who said the best way to predict the future is to invent it and while I’ve made some inventions, they’re modest, my better fortune has been to find amazing entrepreneurs, identify them and then help fund and accelerate their success. RITHOLTZ: Quite interesting. Amazon, Netscape, Applied Materials, Citrix, Intuit, Genentech, EA Sports, Compaq, Slack, Uber, Square, Spotify, Robinhood, that is just an amazing, amazing list of startups that you guys were fairly early investors in. Any of them stand out as uniquely memorable to you? DOERR: Well, two of the standouts got to be Amazon and Google, now, Alphabet, because, what are they, they’re two of the four or five most valuable companies in the world and I think both of them have profoundly changed the way that we live, communicate, educate, inform, conduct commerce, see the world. They both — what they both have in common is exceptional founders and really strong management teams who have a sense of urgency and a focus on either large new markets or large existing markets that deserved and have benefited from disruption. So, I remember when I was first offered a position at Kleiner Perkins, I told them that I thought it was kind of unfair that they would pay me to do the job. I would pay them for the privilege of working with these amazing entrepreneurs and founders. RITHOLTZ: So, when you’re thinking about putting money into the Amazon in the mid ’90s or Google in the late ’90s, at any point in that process, are you thinking, sure, these can become $2 trillion companies soon? DOERR: Well, I had no really good idea how big they could be. So, I put the question to Jeff Bezos and his response was, well, John, I don’t know but we’re going to get big fast. At that time, I kicked up something of a firestorm by proclaiming that the Internet had been under hyped and it might be the largest legal creation of wealth in our lifetimes. But I was more clear and explicit with Larry Page when I met with him and Sergey and I asked Larry, how big Google would get. I’ll never forget this, Barry. He responded to me without missing a beat, 10 billion, and I said, just to test myself, I said, surely, you mean market capitalization, don’t you, and he said, no, John, I mean revenues. We’re just beginning in the field of search and you cannot imagine how much better it’s going to get over time. And sure enough, he was, he was more than right. RITHOLTZ: To say the very least. So, let’s talk a bit about Google. You are known for introducing to both Larry and Sergey your concept of, OKRs, objectives and key results. What was the impact of that on Google? How did they respond to your suggestion on come up with objectives and come up with ways to measure your progress? DOERR: So, for everyone in your audience, objectives and key results or OKRs is a goalsetting system that Andy Grove invented at Intel and that’s because in the semiconductor industry, I’m a refugee from the semiconductor industry, you got to get tens of thousands of people to get lines that are a millionth of a meter, one micron wide, exactly right or nothing works, the chips fail. So, you need exceptional discipline, attention to detail, focus and execution. And so, Andy came up with the system. I was so enamored of it. When I left Intel, I took it everywhere I went from nonprofits to startups to large companies. The Gates Foundation in the nearly days, for example, how — they were — I mean, they were a very large nonprofit startup and an important one for the planet. So, I took Andy Grove’s system to Larry and Sergey, the founders of Google, in the very early days and I went through it with them and at the end of it asked them, so, guys, what you think, would you use this in growing Google, and Larry was — had no comment whatsoever. But Sergey, he was more like brilliant. I’d like to tell you, Barry, that he said, we love this, we’re going to adopt it wholeheartedly. Well, the truth of the matter is what he said was, we don’t have any better way to manage this Google company. So, we’ll give it a try, which I took as a ringing endorsement because what’s happened since then to this day, every Googler, every quarter, writes down her objectives and key results and publishes them for the entire company to see and interestingly, they never leaked. So, there’s 140,000 Googlers who are doing this four times a year. They’re graded. But at the end of each quarter, they’re swept aside because they’re not used for bonuses or promotions. They serve a higher purpose and that’s a collective social contract to get everybody focused and aligned and committed in tracking their progress to stretch for almost impossible to achieve goals. And I’m telling you this story because the same system that Andy Grove invented has now spread pretty broadly through the technology and other sectors of the economy and it’s at the heart of this plan that we have called speed and scale to deal with climate crisis. RITHOLTZ: Quite interesting. I want to stick with some of the early investments that you made and ask a really broad general question, how likely is it that a company you made in early stage investment in ends up looking like the company you thought you were investing in, meaning, how often do companies iterate or pivot into something totally different from what you thought you were getting involved with? DOERR: Well, I was going to say not often if it’s totally different. But if it’s meaningfully different, that happens all the time. And that’s why in the venture capital work that we do, it’s so important to back — to find fund and build a relationship with the right people because the people and the quality of the team is going to affect how they pivot, how they adapt their business plan to changing markets, changing technologies, changing opportunities. RITHOLTZ: Very interesting. So, you mentioned Amazon and Google as just uniquely memorable startups. What about some memorable ones that you thought would work out that didn’t or I know VCs love to talk about look how silly we are, we had an opportunity to invest in X and we passed and now X is fabulously successful, what stands out in that space? DOERR: Well, the standout in that space is the bad decision we made to invest in Fisker instead of in Tesla and at that time, they had similar strategies, which was to enter the electric vehicle market with high-end luxury, pretty expensive car and then to drive the cost of that vehicle down over time. Both companies were struggling to raise money. One of them had experienced executive from the automobile industry, fundamentally a designer by the name of Henrik Fisker as its founder and CEO. The other had Elon Musk who had no automobile industry experience but was determined to reinvent every part of the automotive car doing it more as a machine to run software than a collection of subsystems procured from the automobile industry. We made the wrong call and the rest is history. RITHOLTZ: That Fisker, that first Fisker car was just a gorgeous design and at that time, Tesla was taking old Lotus convertibles and filling them with laptop batteries. Between the two, it’s pretty easy to see how the Fisker opportunity really looked more intriguing than Tesla did way back when. How typical is that for the world of venture? DOERR: It happens all the time. RITHOLTZ: All the time. DOERR: That’s what makes the job of finding funding and accelerating the success of entrepreneurs hard. RITHOLTZ: To say the very least. So, there was just a new report that came out. It said, renewable energy in the U.S. has quadrupled over the past decade. So, we’re all good, right? There’s nothing else to worry about with the climate? DOERR: I wish that was true. I came to this project, this passion back in 2006 when Al Gore’s movie, you remember “An Inconvenient Truth” appeared. RITHOLTZ: Sure. DOERR: And I took my family and friends to see it and we came back for a dinner conversation and went around the table to see what people thought. When it came turn for my 16-year-old daughter Mary Doerr, she said, I’m scared and I’m angry. She said, dad, your generation created this problem, you better fix it. And, Barry, I was speechless, I had no idea what to say. So, I set out with partners at Kleiner Perkins to understand the extent of the climate crisis, even hired Al Gore as a partner and over time, over three funds, invested a third up to a half of the funds, total about $1 billion in some 70 climate ventures, most of which failed and, in fact, it’s hard, it’s very hard to grow a climate tech or green tech venture. It’s pretty lonely in the early days of doing that. And we almost lost all of our investments but we stood by these entrepreneurs and they produced companies like Beyond Meat or Enphase or the NEST smart thermostats and today are worth some $3 billion. But that was then, this is now. I think what’s important about now is we need way greater ambition and speed to avert catastrophic, irreversible climate crisis. I mean, the evidence is all around us. We’ve got devastating hurricanes and floods and wildfires and 10 million climate refugees. The IPCC says that if we don’t reduce our carbon emissions by 2030 by 55 percent, we will see global warming overshoot by more than 2°C, nearly 4°F. And the Paris accords, which were agreed to in 2015, if we were achieving them, it would still cause us to land at around 2°C. The bad news is we’re not close to achieving any of those goals. So, the latest report from the UN said this is a code red problem and I also see all problems as opportunities. Barry, I think this is going to be the greatest opportunity, human opportunity, social opportunity, economic opportunity for the 21st century. RITHOLTZ: So, let’s talk a little bit about that opportunity. You talked in the book about cutting emissions in half by 2030 and net zero by 2050 and you referenced six main areas of attack, transportation, the electrical grid, food, protecting nature, cleaning up industry, and then removing carbon from the atmosphere. Let’s talk a little bit about each of those because they’re all quite fascinating. We were talking about Tesla, how quickly do we think that we’re going to be past internal combustion engines with a fully electrified transportation network? DOERR: Well, that’s a great question and we can — I want to put this in context. Every year, we dump 59 gigatons of carbon, greenhouse gas emissions in the atmosphere as if it’s some kind of free and open sewer. And so, the book and the research behind it has built a plan in electrifying transportation and the other five for which each of the objectives has three to five key results. These are Andy Grove Intel style, very measurable specific steps in transportation. It says that electric vehicles will achieve parity, price performance parity with combustion engines in the U.S. by 2024. It says one of two new personal vehicles purchased worldwide are electric vehicles by 2030. So, what I’m trying to say is this is a global plan. RITHOLTZ: Right. DOERR: We’ve seen some nations of the world, some states like California say they’re going to ban the sale of internal combustion vehicles. And there’s also key results for buses, for trucks, for miles driven, for airplanes and maritime and this whole plan is available for free. You can download it at the website So, it’s pragmatic, it’s ambitious, it’s almost unachievable. It’s a total of 55 key results for the world, numeric time bound, and we’ve got to get after them all at once. We can’t take turns. We’re not going to achieve all of these, Barry. It’s — but if we fall short on one, we can make ground faster in others. Now, I don’t want to intimidate people by how big — how tall an order this is. The book also includes 35 stories from entrepreneurs and policymakers and leaders and innovators, leaders of indigenous tribes that describe in their own words their struggle, their successes, their journey to change the world. One of my favorites is of a cross-country team who got together to petition their school district to go to cleaner busses. They were sick and tired of running behind diesel buses with polluted air and it shows that something that I deeply believe and that is we’re fast running out of time. And so, yes, we need individuals to take individual action to eat less meat, use photovoltaic solar and buy an electric vehicle if you can afford it. But I’ve really written this book for the leader inside of everyone, their inner leader, and that’s their ability to influence others to act as a group like this cross-country team of runners in Maryland who got their school district to adopt electric buses. What the book shows is that we can get this job done but, as I said, we’re fast running out of time. RITHOLTZ: So, let’s talk a little bit about — by the way, the bus discussions in the book are quite fascinating not just because China leapt out to a big lead and have been very aggressively replacing diesel buses with electric buses but you helped fund an entrepreneur in the U.S. that’s gone around and has done a great job getting cities to purchase electric buses. The transportation grid is clearly an issue but as you point out, that’s only six gigatons. A bigger issue is the grid, the electric grid, which produces 21 gigatons of emissions. Tell us about what we need to do to decarbonize the electrical grid. DOERR: 100%, you’re right. If we move to electric vehicles but we still use coal to generate electricity, we won’t have reduced emissions. And the biggest opportunity is to decarbonize the grid and that’s to take today’s 24 gigatons of emissions mostly from goal, also natural gas to generate electricity. Take that 24 down to three gigatons. So, the first key result, the biggest of them, is to get 50 percent of our electricity from zero emission sources globally by 2025 and get it down to 38 percent — get a 90 percent by 2035. That would save us 16.5 gigatons. Simply put, we need to move to renewable sources like wind and solar and invest in longer-term durable storage so that we have reliable energy when the wind isn’t blowing and the sun isn’t shining. RITHOLTZ: So, let’s talk about that battery technology a little bit. We’ve seen a series of incremental improvements over time but nothing has been like an order of magnitude improvement. Will we be able to get there soon enough? Do we need a Manhattan project for batteries or are all those incremental improvements compounding and we’ll get there eventually? DOERR: Much of the improvement that is needed in all of these technologies is lowering their costs. And so, batteries today are still too expensive for electric vehicles in India and in China. They’re barely affordable in the U.S. marketplace. RITHOLTZ: Right. DOERR: And so, the book tells the story of QuantumScape, I’ll disclose, a public company that I’ve invested in and served on the board of, an entrepreneur by the name of Jagdeep Singh and he is going for a quantum improvement in batteries to more than double their energy density. The energy density of a battery is how much energy you’ll get out of it for a pound of weight of a battery and it’s especially important in electric vehicles because the most expensive part of the vehicle is the battery and it’s the heaviest part and you got use energy to move the weight around. So, if you double the energy density of a battery, you can get a three or four times systems improvement in the vehicle itself. I’m not expecting, I don’t think anyone is forecasting an order of magnitude improvement. We’ve seen considerable lowering costs of batteries over time. But the QuantumScape innovation, which is an all solid-state battery, would be a genuine breakthrough. RITHOLTZ: Let’s talk a little bit about food, another key source of emissions. How can we become more efficient in growing the food affecting the menu of what we eat and reducing enough food waste to make a difference? DOERR: There’s three big things t to do about food. The first is to reduce the meat and dairies in our diet and I’m not saying cut them out entirely but to replace some of that with delicious, healthy plant-based proteins. And the book tells a story of Beyond Meat and the crusade of its founder. He struggled and mortgaged his house to lead the revolution in plant-based protein. It turns out that there’s a billion cows on the planet. The book tells you their story as well. If they were a nation, it would be the third largest country in terms of the emissions. The second big thing to do about food is to reduce food waste. Globally, 30 percent of the food that we produce is wasted and taking some straightforward measures we think that can be reduced. Our goal is to reduce it to 10 percent of the food that we produce, particularly when you consider the population will grow to 10 billion by the end of the century. Finally, we got to get more efficient with how we grow food and we can, for example, apply fertilizer much more precisely with new technologies. All in all, the food sector is a way for us to reduce nine gigatons of emissions to two gigatons by 2050 or a net gain of seven out of the 59 gigatons that we got to drive to zero. RITHOLTZ: So, we’ve spent a lot of time talking about beef and agriculture generally. But let’s talk about commercial fishing, what’s the impact of our fishing practices on the health of the oceans and its ability to absorb carbon and reflect heat? DOERR: Well, over fishing together with over drilling and over development have released huge amounts of carbon from the ocean floor and life and if we prevented the destruction of mangroves and other ocean life, we could prevent a gigaton of emissions from entering the atmosphere every year. Our plan calls to eliminate deep sea bottom trawling, which is an especially destructive practice. Bottom trawling releases one and a half gigatons of CO2 equivalent emissions. It also calls for increasing the protection of oceans to 30 percent by 2030 and 50 percent by 2050. I want to call out, this is an area of climate ambition that Walmart is staking out an important and powerful leadership position. Not only that they said they’re going to have their supply chain be carbon neutral by 2040 but they are going to preserve, protect millions of acres of land and ocean water in the effort to become the first scale regenerative company. RITHOLTZ: Really, really interesting. So, very often, the average person listening to a conversation like this thinks, well, what can I do, I’m just one person. What’s the balance of responsibility between individuals on one side and government and institutions on the other? DOERR: We need all the forces in our economy, in our society to come together and work on this. We need innovators. We need entrepreneurs. We need policymakers. We need investors. We need to hear more from impassioned youth. In 2018, Greta Thunberg was a single high school student skipping school on Fridays. A year later, in 2019, in December, she organized a million-person march in a hundred cities around the world and specifically, she made the climate crisis atop two voting issue in the nations in Europe. Barry, it is not a top voting issue in the U.S. It is not a top issue in China or even in India. So, we have work to do and that’s one of our accelerants, the ways we get all this done faster and that’s to turn movements into specific actions. We really need individuals to lead others in powerful ways. That’s, for example, employees, pushing your employers to make net-zero commitment or shareholders and investors demanding changes in the board rooms. It turns out that changing the lightbulbs and eating less meat is important but we’ve got to go further. We’ve got to change our laws or even our lawmakers in order to avert this climate crisis. RITHOLTZ: Quite fascinating. I want to talk about some of the things you’ve said in the book that apply everywhere but are especially applicable to the climate crisis. Let’s start with, quote, “It seems every dozen years we witness magical ever-exponentially larger waves of innovation.” So, let’s start first with climate, how and where are those waves of innovation coming that’ll help ameliorate the climate crisis? DOERR: Well, the innovations are happening on many fronts, the material sciences, electrochemistry, biology. The opportunity that the climate transition to a clean energy the economy represents is the largest of our lifetime. It’s a bigger mobilization than even the effort of the allies to defeat the Nazi Axis in World War II. You’ll remember then, we shut down for four years all manufacturing of automobiles and appliances and instead, created 268,000 fighter aircrafts, 20,000 battleships. It was a monumental effort dealing with an existential threat. And that same level of innovation and ambition is required to win in this climate campaign. Other areas of breakthroughs or innovations, I’m even becoming a believer that we’ll see nuclear fusion. That’s the kind of clean energy that comes from the sun, practical within a decade. Concrete and steel that’s carbon free, long duration storage, the opportunities to reimagine and reinvent how we create, share, transmit and use energy in every facet of our lives is as big an opportunity as we’ll see in our lifetime. RITHOLTZ: So, let’s stay focused on that opportunity for a minute. This isn’t a charity or a foundation that’s doing this for free. When we look around, there are actual venture investments that you’ve been making successfully. So, you past on Tesla but somebody put money into Tesla. Wind turbines, solar, Beyond Meat is now public company. You are an early investor into that. You’re looking at this as more than just, hey, we have to do this in order to make sure that we don’t have a runaway greenhouse effect and Earth turns into Venus and becomes uninhabitable. But there are also very legitimate economic opportunities here also. Expound on those a little bit. DOERR: Well, there’s no better example than Tesla which had gone from a struggling company reliant on loans, thank you, United States taxpayers, to the sought most valuable company in the world. And by some measures, Elon Musk is the most — is the richest individual in the world. He took on huge risks and he delivered for his customers and shareholders, his country and his planet. And the best of the work that Elon has done is inspire, perhaps, through fear but certainly by example the rest of the automobile industry to accelerate their shift to clean and electric vehicles. So, this is, how I like to say, the mother of all markets. It’s a monster market. Batteries alone, the batteries to move from internal combustion vehicles to electric vehicles, are estimated to be $400 billion per year, Barry, for 20 years. We are going to — we must recreate all the infrastructure that we use to power out planet. RITHOLTZ: Let’s talk about something we haven’t gotten to when we were talking about those larger waves of innovation. Lots of folks are excited about blockchain and crypto and Web 3.0. But when we look at things like Bitcoin, it’s a big energy hog, how do we reconcile all the wealth that’s being created there with its massive electricity consumption? DOERR: Its electricity consumption is sustainable and so, we’re going to have to move to clean Bitcoin, green Bitcoin and we’ll get there by regulation, if not, by other market forces I would predict. Today, I believe that Bitcoin uses as much energy as the entire nation of Sweden. So, Bitcoin, I believe, is here to stay but it — we can’t fuel it through dirty electricity. RITHOLTZ: You mentioned concrete earlier and I also read in the book that you want to end single-use plastics. What does the world of material science promised us for replacing things in those spaces? How do you replace concrete? How do you replace single-use plastic? DOERR: Concrete is probably the hardest problem of all because in the production of the concrete, you almost must create carbon emissions. We can reduce the energy use to make concrete. There are some concrete innovations that absorb the CO2 into the material. But that’s an area where we need more innovation. What was your second area? RITHOLTZ: Single-use plastics. DOERR: Single-use plastics. The plan calls for the banning and really the replacement of single-use plastics. The banning of single-use plastics and in general to replace plastics with compostable materials that can be recycled and I am confident that with investment and entrepreneurial work, we can get that done. RITHOLTZ: So, we haven’t really talked about pulling carbon out of the atmosphere. I get the sense from some people that they’re expecting some technological magic bullet that’s going to solve climate change. Tell us about how we can remove carbon from the atmosphere and is there a magic bullet coming. DOERR: The speed and scale plan calls for us to remove 10 gigatons of carbon dioxide per year. I emphasize remove. This will be gigatons of CO2 emissions that we were not able to eliminate, we were not able to cut, we were not able to slash. They’ll be some uses of aviation fuel as an example or other stubborn carbon. Two approaches to this, one of which is to innovate around nature-based ways of removing CO2. For example, growing greater kelp forest in the oceans. But the other that has captured a lot of attention is called direct air capture or that’s engineered removal of carbon. Think of them as kind of mechanical trees and this technology works today but only at small scale. It sucks the CO2 out of the air. It requires a lot of electricity in order to do that. And so, it’s very expensive today, some $600 per ton. If we’ve got to remove five gigatons per year at $600 per ton, that’s $3 trillion a year and it’s hard to see how that’s affordable. So, entrepreneurs are hard at work to lower those costs and I hope they do. RITHOLTZ: So, there’s a quote I like from another venture capitalist who said venture capital properly deployed can solve the biggest problems, filling the void left by shrinking scientific ambitions of governments, foundations and international organizations. What are your thoughts on that approach? How crucial is venture capital to our future and can it replace these other entities? DOERR: Venture capital is crucial and it’s stepping up to the challenge. There will be an estimated $30 billion invested venture capital in climate technologies this year. Our plan calls for 50 billion this year. But venture capital is not going to get this job done on its own. We need government-funded research and development to grow in the U.S. alone to 40 billion a year. Other countries have got to triple their funding. We need project financing. We need philanthropic investing. Jeff Bezos’ commitment of $10 billion to the Bezos Earth Fund is the largest philanthropic commitment to climate crisis that we’ve ever witnessed or enjoyed. There’s really four accelerators that will get this job done. One of them is investing. Another is innovation, the work of entrepreneurs. But I think the hardest are going to be to turn our movements into actions so we get the politics and the policy correct because it’s going to take a massive, collective, coordinated effort to achieve our ultimate OKR and that’s to take 59 gigatons of emissions to net zero by 2050. RITHOLTZ: That’s an ambitious target and if we miss that target, what are the ramifications? DOERR: We’ll leave our kids and our grandkids an uninhabitable planet. We’ll see the Arctic sea ice surely melts away. We’ll have — estimates are up to a billion climate refugees. There’s 10 million of them already. Hundreds of millions of people will starve. It’s unthinkable. And so, we must get this done. RITHOLTZ: So, let me turn this back to what’s going on in the world of venture now. When the early decades of you work at Kleiner Perkins was into a very friendly IPO market, how much does timing matter broadly, meaning, hey, if there’s an exit available, if there’s a big IPO market that makes it more likely people are going to invest in these companies and have a successful exit. Tell us a little bit about timing. DOERR: Well, investors, myself included, will stop at nothing to copy success. So, the timing of today’s markets for climate technologies whether it’s Tesla or Rivian or better batteries or Beyond Meat, it’s good and I would say in the long run, it’s going to continue to be good because the size of the markets and the need, the economic need, the opportunity, and the planetary pressures. RITHOLTZ: So, if a younger venture capitalist or a newfound venture fund came to you and ask for advice, what would you tell them about this opportunity? DOERR: There’s so many different venture firms and strategies. I would say to them that this is the greatest opportunity with 21st century that they should be strategic about their contribution. Is it to work with early-stage entrepreneurs and removing technical risks or at the other extreme, is it to be smart and sharp about project financing? But the overall costs of the transition from a dirty fossil economy to a clean new energy economy is $4 trillion per year, per year. That sounds like a big number until you compare it with the cost of dirty energy, the social cost, the disruption, the premature deaths. One in five deaths are premature due to carbon pollution. Those come in at about $10 billion per year. So, it’s literally cheaper to save the Earth than it is to ruin it. RITHOLTZ: And there’s just seems to be endless amounts of cash pouring into the venture capital sector. Arguably, it’s never been higher. What are your thoughts on this? Does it worry you? What’s the driver of all this money sloshing around? DOERR: Some people say that we’re experiencing a bubble, a bubble in fintech or Bitcoin or climate technologies. I see it very differently. I think it’s a boom and historically, whether it was the advent of transcontinental railroads or the automobiles, we saw booms which led to full employment, overinvestment, rapid innovation. And, no, not all those car companies survive. But I think the same will be true of the other fields of innovation. I think one of the things that gives me great hope is the power of human ingenuity. We got ourselves into these specs and, Barry, I’m betting, we’re going to figure our way out. RITHOLTZ: So, what do you say to people who sort of posture Silicon Valley’s best days are behind it? Do you have a response to any of those folks? DOERR: I think they’re wrong. I think provided we deal with this existential threat, the climate crisis, and that is not guaranteed, but provided we do that and we get a 50% reduction in the next decade, I think we’re on track for a wonderful, prosperous, healthy planet. RITHOLTZ: Can I tell you and I should have mentioned this earlier but I read a ton of books for the show and I found the book really quite fascinating and it’s pretty obvious to me that an engineer was behind this. There’s just a lot of great slides and charts and graphs and it’s not just all texts. Parts of it are narrative and parts of it are historical and it reminds me of a well-made slide deck. So, nice job on the book. DOERR: Well, thanks for sharing that. I want to send you a bound version of the book if you’ll email me your physical mailing address. There’s one other thing — other story I might tell you about the book. RITHOLTZ: Sure. DOERR: I was talking the other day with a reader, a mom who told me that every night, she takes two or three pages of the book and she reads them together with her daughter and then they talk about together what that means for the world her daughter is going to inherit, and I thought, wow, that’s the use of the book I never imagined and one that I’m honestly proud of. RITHOLTZ: How — it looks like this was the work of a lot of different people. How did you end up researching and writing this? DOERR: We talked to hundred different leaders in the field, policymakers, researchers, modelers, activists and from those, selected some 35 stories. We ended up with a thousand different data points that we needed to verify and collected those into 500 end notes, which are in the book. And I did it with an amazing small team of three or four on research and writing stuf. I’m an engineer as you know and so I’m not so good with words and I had the benefit of a writing team that helped make this much more readable. RITHOLTZ: Well, it shows, you can see the book is a fast read. I sat down with a bunch of stickies and highlighter and found myself just plowing through chapter after chapter. It was a relatively quick read and very easy to put down and then pick back up again. Each chapter is very distinct and you’ve really laid out a plan to prevent climate catastrophe from taking place. So, thank you for that. DOERR: One thing I want to make sure your audience know is this, they can get a free infographic, it’s a single poster-sized piece of paper that has on both sides of it all the objectives, all the key results, all the measures. And it’s reassuring for people who are fearful that there is a plan and that if we do these things, we can find a way to a habitable planet. That’s what we’ve got to do. RITHOLTZ: So, I know I only have you for a limited amount of time. Let me jump to my favorite questions that I ask all of my guests starting with tell us what you’ve been streaming these days, give us your favorite Netflix or Amazon Prime or whatever podcast you’re listening to. DOERR: So, I haven’t had time for streaming on Netflix. I’ve been doing research, reading books and papers on the climate crisis itself. But getting this word out, I’ve listened to a — I’ve started listening to a couple of new podcast, John Heilemann’s Hell & High Water … RITHOLTZ: Sure. DOERR: … and Tim Ferriss Show, both of which, I think, have a distinctive imprint from their hosts (ph). RITHOLTZ: Tell us about your mentors who helped to shape your career. DOERR: So, the biggest influence on my life was my dad Lou Doerr, an engineer, entrepreneur and hero and I’ve been blessed by a number of mentors, perhaps most notable of them, Andy Grove, and what I learned from him at Intel prompted me to write a first book called “Measure What Matters” and that tells stories of a dozen different organizations using OKRs, which is what then I applied to the climate crisis. I would tell you Al Gore is a hero of mine. He’s wonderfully resolute man who’s impassioned, effective and funny. He and I talked regularly about the climate crisis. RITHOLTZ: Tell us about some of your favorite books, what are your all-time favorites and what are you reading right now. DOERR: So, my current reading, no surprise, is largely around the climate crisis. I love Elizabeth Colbert’s “Under a White Sky” which described climate futures. And two other books are “How to Avoid a Climate Disaster” by Bill Gates, very accessible book, and a profile — a new profile of Winston Churchill called “The splendid and the Vile.” RITHOLTZ: Two good recommendations. What sort of advice would you give to a recent college grad who wanted to pursue a career in venture investing? DOERR: I would say to her gain experience as an entrepreneur. I’d repeat the advice that I was given early in my career which was go get a real job in a real growing tech company and sharpen your skills in the real hard world of business economics and then take that experience to help other entrepreneurs succeed. RITHOLTZ: And our final question, what do you know about the world of venture investing today that you wish you knew 40 years ago? DOERR: I wish I knew 40 years ago how important the team is, the leadership of the team, the recruiting of the team, the growing of the team because in the end, it’s more than large market, it’s more than compelling technologies. It’s teams who know how to execute well. RITHOLTZ: Really, really fascinating stuff. Thanks, John, for being so generous with your time. We have been speaking with John Doerr. He is a partner at famed venture firm Kleiner Perkins and the author of the new book, “Speed and Scale: An Action Plan for Solving our Climate Crisis Now.” If you enjoy this conversation, be sure and check out all of our previous discussions. You can find those wherever you find your favorite podcast, iTunes, Spotify, Acast, wherever. We love your comments, feedback and suggestions. Write to us at Sign up for my daily reads Follow me on Twitter, @Ritholtz. I would be remiss if I do not thank our crack staff that helps with these conversations together each week, Michael Batnick is my head of research, Atika Valbrun is our project manager, Paris Wald is our producer, I’m Barry Ritholtz, you’ve been listening to Masters in Business on Bloomberg Radio.   ~~~   The post Transcript: John Doerr appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureDec 6th, 2021

How Migrant Surge At The Border Fuels Massive American OD"s From Tiny Grains of This Killer Drug

How Migrant Surge At The Border Fuels Massive American OD's From Tiny Grains of This Killer Drug By Vince Bielski, published originally in On a September afternoon, Allyssia Solorio wondered why her energetic young brother hadn’t emerged from his bedroom in their Sacramento, Calif., home. When she opened his door, she saw 23-year-old Mikael leaning back on his bed with his legs dangling over the side. She rushed to her brother and shook him, but to no avail. He was dead. A counterfeit pharmaceutical pill laced with illicit fentanyl had killed him. Mikael Tirado was one of an estimated 93,331 overdose fatalities in the United States last year – an all-time high. Nearly five times the murder rate, the deadly overdose toll was primarily caused by fentanyl, a highly lethal synthetic opioid. It’s manufactured mostly by Mexican cartels with ingredients imported from China, and then smuggled over the southwestern U.S. border. Fentanyl has been arriving in larger quantities each year since at least 2016. The cartels are taking advantage of law enforcement weaknesses and policy failures to smuggle record amounts of the lethal drug into the United States, according to interviews with half a dozen current and former drug and immigration agents. While a lack of screening technology to find contraband at ports of entry and an inept U.S-Mexico campaign to cripple the cartels are longstanding issues, there’s also a new one: the flood of migrants across the border that the Biden administration has done little to stop. Former law enforcement officials say the cartels are orchestrating the surge, overwhelming the capacity of agents to pursue drug smugglers. They can freely enter Texas, New Mexico, Arizona and California carrying fentanyl while agents are diverted to the time-consuming duty of apprehending and processing migrants. Frustrated border agents and their union have been calling on Congress to send reinforcements. But help is not on the way. The administration’s upcoming budget request doesn’t include funding for more Customs and Border Protection agents. In September, tensions boiled over after President Joe Biden and Vice President Kamala Harris lashed out at agents on horseback in response to videos showing them blocking Haitians crossing the border. Harris compared the incident to the mistreatment of slaves, an inflammatory accusation that the union strongly denied, saying no migrants were hit or hurt. The administration is pivoting away from law enforcement and embracing a public health approach to the fentanyl crisis. It has proposed spending $11.2 billion – a huge increase over last year – to expand substance abuse prevention, treatment and recovery services. Fewer addicts would mean fewer deaths from fentanyl. But curbing opioid addiction is very challenging. The vast majority of substance abusers avoid treatment, according to researchers, and only about one-third of those receiving long-term medical care fully recover. These success stories, however, will be offset if the supply of fentanyl continues to boom and fuel more addiction. “Drug treatment is very important, but you can’t treat someone in the morgue who just died from fentanyl poisoning. It’s too late,” says Derek Maltz, the former director of the Drug Enforcement Administration’s special operations division, which primarily targets cartels. “We have to vigorously attack the production labs in Mexico and increase border security on our side.” Cartels have turned to fentanyl because the super-potent powder is cheap to produce, making it more profitable than heroin, says Eric Triana, an assistant special agent in charge at the DEA division in New York. Two of Mexico’s most powerful crime groups – the Sinaloa and Jalisco New Generation cartels – manufacture the synthetic drug in rustic clandestine labs. In the U.S., the powder is mixed with heroin to stretch supplies. To boost sales, cartels have more recently increased production of counterfeit pharmaceuticals. They are made with fentanyl but labeled to look exactly like legitimate medications such as Percocet, Vicodin and Xanax. Cartels are increasing production of counterfeit pharmaceuticals. Above, a seized pill press. Flickr/DEA The fake pills, which are promoted and sold on social media platforms as real pharmaceuticals, are priced to sell at a discounted rate of about $20 each. They have brought the dangers of fentanyl to mainstream America, with victims belonging to every age, class and racial group. Nationwide, DEA agents seized an unprecedented 9.5 million fake pills -- some portion of that total in every U.S. state in the first nine months of 2021, or more than the last two years combined. That prompted the agency to issue a rare public safety alert in September. Fentanyl’s potency – at 50 times the strength of heroin – is what makes it so deadly. Two milligrams, which can fit on the tip of a pencil, can kill. But cartels don’t take precautions to make sure the pills aren’t lethal. DEA analysis found that 40% of the seized pills had a potentially deadly dose. “I saw the devastation that heroin brought to Baltimore as a young police officer,” Triana says. “But fentanyl is a more potent deadly threat. It’s frightening.” Crime groups have gained complete control of the Mexican side of the 1,950-mile border, directing the flow of both migrants and drugs. The Gulf Cartel runs the region around Brownsville, Texas, and moving west to California, the Cartel of the Northeast, Juarez Cartel and the Sinaloa Cartel have staked out turf, says Victor Avila, a former supervisory special agent with Immigration and Customs Enforcement who specialized in human and narcotics trafficking. Diversion Game at the Border They operate openly as if they were the Mexican military. Jalisco New Generation Cartel, which has recently expanded operations, even slaps a “CJNG” logo in big letters on its military-style trucks and uniforms as part of a show of force. The Jalisco cartel increasingly operates like a military force. (Above, a purported convoy.)  Twitter/@jaeson_jones The surge of migrants that began in 2019 and accelerated after Biden took office has been a boon to these violent enterprises. The migrants are coming from Eastern Europe and Africa as well as Central and South America, lured partly by the administration’s policy that allows unaccompanied children and families to stay in the states while they apply for asylum, according to border agents who have interviewed them. In addition to paying cartels between about $2,000 and $9,000 each to cross, migrants are also used as decoys in drug smuggling operations. Equipped with encrypted communications and satellite technologies, crime organizations are precisely orchestrating the timing and location of the border crossings of large migrant groups as part of a diversion tactic, several officers say. Dozens of agents are forced to leave their posts guarding many miles of the border and at checkpoints on roads to assist with apprehensions of the groups. The cartels work with spotters in the Halcon network to identify these wide security gaps along the border and send drug smugglers on foot through them undetected. A Call for More Agents “The illegal alien flows are so big that the Border Patrol has to leave hundreds of miles of border unprotected,” says Avila. “This absolutely means more fentanyl has been entering the country in the last few years.” The smugglers make their way across tough terrain to one of hundreds of stash houses located near roads in the border region. The drugs are then placed in cars and driven through often unguarded checkpoints and across the country. Rather than pursue these smugglers, many Border Patrol agents are handling the crush of migrants entering the U.S. They apprehended more than 1.7 million this fiscal year, or six times the 2017 number. (That doesn’t include the hundreds of thousands who got away, according to Border Patrol estimates.) Agents deport most of the single adults. But they have to assist in transporting, processing, housing and feeding the unaccompanied children and families who are placed in border patrol facilities for weeks before they are released into the U.S. to pursue asylum claims. In the busiest border areas, such as Texas’ Rio Grande Valley and Del Rio, as many as 30% of agents are pulled from the frontlines to deal with the migrant overflow, says Brandon Judd, president of the National Border Patrol Council. Texas is trying to fill the security void by deploying hundreds of state troopers and the National Guard in Operation Lonestar, a $1.8 billion effort. They have seized 127 pounds of fentanyl this year through early September. The Trump administration was able to tamp down the number of migrants crossing the border by forcing them to remain in Mexico while they applied for asylum. Biden ended that program, calling it inhumane, and the administration is now fighting a court order to reinstate it. Judd says as long as Biden’s asylum policy is in place, the Border Patrol, which has about 14,000 field agents covering both coasts and both land borders, needs thousands more to help secure the Southwest flank. Pleas to congressional leaders for help, made by Judd’s union and former Border Patrol chiefs, have gone unheeded.   “If you are not going to change the policy, then give me more manpower to stop the drugs,” Judd says. “But Democrats control Congress, and while some of them are fairly good on border security, it isn’t a priority for a majority of them.” So far this year, CBP has redeployed 400 agents from the northern and coastal areas to the southern border – not nearly enough to fill the gaps, Judd says. In a statement to RealClearInvestigations, a CBP spokesperson said the agency continues to evaluate the need for more agents and pointed to drug busts as evidence of strong enforcement. Border and customs agents seized 10,000 pounds of fentanyl this fiscal year, according to agency data. That’s five times the catch in 2018. But agents say more seizures actually indicates that more of the deadly drug is entering the country since they have only been capturing an estimated 10% to 15% of the total. Most of the fentanyl is pouring over the Southwest border at the U.S. ports of entry, particularly in California, a favorite route for smugglers. The challenge for customs agents at the controlled inspection ports in four states is very different than the cat-and-mouse pursuits of the Border Patrol: How to find illegal contraband in vehicles without slowing trade with Mexico worth hundreds of billions of dollars each year. The San Ysidro port in California between San Diego and Tijuana is the busiest land border crossing in the Western Hemisphere. The 70,000 vehicle passengers headed north every day through the port have to wait in long lines of traffic for an hour, on average. Nearby, the thousands of commercial trucks that go through the Otay Mesa port daily have even longer waits. Legal trade and travel occupy patrols at ports of entry like San Ysidro (above), which smugglers exploit. AP Photo/Gregory Bull Customs agents are in a fix. They are under pressure to efficiently clear trucks from Mexico carrying fruits, vegetables, electronics and other goods for entry into the U.S. But that priority to avoid costly commercial delays is in constant conflict with the need to stop and search the vehicles for illicit goods. More often than not, smugglers get waved through without a search. “Transnational criminal organizations take advantage of the chaos and clutter at the ports of entry that are dealing with so much legitimate trade and travel,” says Victor Manjarrez, a former Border Patrol supervisor and now a security expert at the University of Texas at El Paso. Cartels have the confidence to go big at the border. In August, a Mexican tractor-trailer driver attempted to cross at Otay Mesa with 2.8 tons of methamphetamine and fentanyl hidden among plastic household goods. Agents scanned the cargo using an X-ray-like machine and saw what they described as “anomalies” inside the trailer. Then a canine team sniffed out narcotics worth $13 million. It was the largest ever meth bust along the border. Customs agents would arrest more smugglers if they were equipped with basic scanning technology used in the huge Otay Mesa seizure. It helps them quickly make better decisions about which vehicles to inspect manually, a process that can take hours. CBP says it has been deploying more large-scale scanners at ports of entry in the last two years. Remarkably, only 15% of trucks were scanned at Southwest ports of entry in 2019, according to a CBP report. And less than half of them received any formal inspection because customs agents have to move too rapidly through the snarl of waiting traffic, says Manjarrez. Many of the 328 U.S. ports also need to be expanded and modernized to reduce wait times to allow for more inspections. The Biden administration is asking Congress for $660 million for upgrades, or enough to improve only a handful of the old ports. Otay Mesa’s $144 million expansion plan alone would absorb almost a quarter of this new funding. “It’s really only a down payment for what is needed,” Manjarrez says. ‘Hugs, Not Bullets’ in Mexico More agents and technology would “absolutely make a bigger dent” in the flow of fentanyl over the border, Manjarrez says, but not stop it. Agents say Mexico also has to begin targeting the hundreds of cartel production labs to further cut the supply. “Destroying the labs has to be a top priority because, without them, the cartels can’t continue to kill our kids,” says Maltz, the former DEA organized crime specialist. But President Andres Manuel Lopez Obrador ended Mexico’s military campaign against cartel leaders two years ago. Soldiers captured and killed many kingpins, but the crackdown also unleashed a reign of violence that Lopez Obrador pledged to blunt. The populist president is pushing his “hugs, not bullets” agenda to reduce poverty in the hope that it will eventually curb the appeal of drug smuggling. Meanwhile, the cartels, facing little government resistance, have continued to expand their hold on territory and corrupt lawmakers, according to Vanda Felbab-Brown, a scholar focusing on nonstate armed actors at the Brookings Institution. The clout of the cartels was made clear in 2020 when U.S. agents arrested a former Mexican defense secretary for taking bribes to protect the ultraviolent H-2 Cartel. Outraged officials pressured the U.S. to return Salvador Cienfuegos Zepeda to Mexico where prosecutors promptly exonerated him. The more lasting damage to drug enforcement came when Mexico passed a law in response to Cienfuegos’ arrest. Maltz says it froze DEA’s operations in Mexico by requiring agents to pass sensitive intelligence through a central foreign affairs office that they believe is corrupt.   “The cartels control Mexico. All of it,” says Avila, the former ICE agent who survived gunshot wounds in an ambush with a cartel. “They are running a parallel government.” The U.S. Plays Nice With the U.S. drug enforcement imperiled, Felbab-Brown has called on the Biden administration to “get tough” with Mexico. In January she urged the administration to use financial support as leverage to compel Mexico to target mid-level cartel operatives and their corrupt government protectors to avoid the bloodshed that comes with taking down bosses. But the State Department is taking a conciliatory position, essentially backing Lopez Obrador’s economic development strategy in an agreement between the two countries announced in early October. The Biden administration has been conciliatory toward Mexico, but not its own mounted agents. AP Photo/Felix Marquez At a joint press conference, U.S. Secretary of State Antony Blinken said the countries had relied too much on security forces to try to weaken the cartels. Over the past decade the U.S. has spent $3 billion to arm and train the Mexican military and police as part of the Merida Initiative. During that time, drug trafficking into the U.S. increased. A new agreement will replace Merida, making job creation in poor communities and drug treatment and prevention top priorities, Blinken said. The countries did agree to pursue the cartels, particularly by curtailing the illegal supply of U.S. arms into Mexico and money laundering activities. But the prosecution of cartel members isn’t the priority. Mexico Foreign Secretary Marcelo Ebrard said the success of the agreement won’t be measured by how many drug lords go to jail.   The administration’s strategy has plenty of backers in the criminal justice and public health professions. “I'm sympathetic to the argument that Mexico is on the border with the largest consumer of fentanyl and cocaine in the world,” says Bryce Pardo, a drug policy specialist at Rand Corp. “We could do more to reduce our insatiable appetite for drugs.” In the meantime, more fentanyl smuggled into the U.S. means more deaths. Triana, the DEA special agent, estimates that the number of overdose fatalities this year will either be on par with or exceed 2020’s. Allyssia Solorio, the sister of the Sacramento man who died from fentanyl, has become an activist to raise awareness of the dangers of the illicit drug. The former postal worker says law enforcement must play a larger role. “President Biden can do a lot more to shut down the smuggling of fentanyl over the Mexican border,” she says. Tyler Durden Thu, 12/02/2021 - 23:20.....»»

Category: personnelSource: nytDec 3rd, 2021

Deere Reports Net Income of $1.283 Billion for Fourth Quarter, $5.963 Billion for Fiscal Year

MOLINE, Ill., Nov. 24, 2021 /PRNewswire/ -- Fourth-quarter net income rises on net sales gain of 19%, demonstrating solid execution and benefits of operating model. UAW contract agreement shows commitment to Deere's workforce. Full-year 2022 earnings forecast to be $6.5 to $7.0 billion, reflecting healthy demand. Deere & Company (NYSE:DE) reported net income of $1.283 billion for the fourth quarter ended October 31, 2021, or $4.12 per share, compared with net income of $757 million, or $2.39 per share, for the quarter ended November 1, 2020. For fiscal year 2021, net income attributable to Deere & Company was $5.963 billion, or $18.99 per share, compared with $2.751 billion, or $8.69 per share, in fiscal 2020. Worldwide net sales and revenues increased 16 percent, to $11.327 billion, for the fourth quarter of fiscal 2021 and rose 24 percent, to $44.024 billion, for the full year. Equipment operations net sales were $10.276 billion for the quarter and $39.737 billion for the year, compared with corresponding totals of $8.659 billion and $31.272 billion in 2020. "Deere's strong fourth-quarter and full-year performance was delivered by our dedicated employees, dealers, and suppliers throughout the world, who have helped safely maintain our operations and serve customers," said John C. May, chairman and chief executive officer. "Our results reflect strong end-market demand and our ability to continue serving customers while managing supply-chain issues and conducting contract negotiations with our largest union. Last week's ratification of a 6-year agreement with the UAW brings our highly skilled employees back to work building the finest products in our industries. The agreement shows our ongoing commitment to delivering best-in-class wages and benefits." Company Outlook & Summary Net income attributable to Deere & Company for fiscal 2022 is forecasted to be in a range of $6.5 billion to $7.0 billion. "Looking ahead, we expect demand for farm and construction equipment to continue benefiting from positive fundamentals, including favorable crop prices, economic growth, and increased investment in infrastructure," May said. "At the same time, we anticipate supply-chain pressures will continue to pose challenges in our industries. We are working closely with our suppliers to address these issues and ensure that our customers can deliver essential food and infrastructure more profitably and sustainably." Deere & Company Fourth Quarter Full Year $ in millions 2021 2020 % Change 2021 2020 % Change Net sales and revenues $ 11,327 $ 9,731 16% $ 44,024 $ 35,540 24% Net income $ 1,283 $ 757 69% $ 5,963 $ 2,751 117% Fully diluted EPS $ 4.12 $ 2.39 $ 18.99 $ 8.69 Net income in the fourth quarter and full-year 2020 was negatively affected by impairment charges and employee-separation costs of $211 million and $458 million after-tax, respectively. In addition, net income was unfavorably affected by discrete adjustments to the provision for income taxes in both periods of 2020. Equipment Operations Fourth Quarter $ in millions 2021 2020 % Change Net sales $ 10,276 $ 8,659 19% Operating profit $ 1,393 $ 1,056 32% Net income $ 1,056 $ 571 85% For a discussion of net sales and operating profit results, see the production and precision agriculture, small agriculture and turf, and construction and forestry sections below. Production & Precision Agriculture Fourth Quarter $ in millions 2021 2020 % Change Net sales $ 4,661 $ 3,801 23% Operating profit $ 777 $ 578 34% Operating margin 16.7% 15.2% Production and precision agriculture sales increased for the quarter due to higher shipment volumes and price realization. Operating profit rose primarily due to price realization and improved shipment volumes / mix. These items were partially offset by higher production costs. Results for fourth-quarter 2020 were negatively impacted by employee-separation expenses.   Small Agriculture & Turf Fourth Quarter $ in millions 2021 2020 % Change Net sales $ 2,809 $ 2,397 17% Operating profit $ 346 $ 282 23% Operating margin 12.3% 11.8% Small agriculture and turf sales increased for the quarter due to higher shipment volumes and price realization. Operating profit rose primarily due to improved shipment volumes / mix and price realization. These items were partially offset by higher production costs and higher research and development and selling, administrative, and general expenses. Employee-separation expenses and impairments negatively impacted the fourth quarter of 2020.   Construction & Forestry Fourth Quarter $ in millions 2021 2020 % Change Net sales $ 2,806 $ 2,461 14% Operating profit $ 270 $ 196 38% Operating margin 9.6% 8.0% Construction & Forestry sales moved higher for the quarter primarily due to higher shipment volumes and price realization. Operating profit improved mainly due to price realization and higher sales volume / mix. Partially offsetting these factors were increases in production costs and higher selling, administrative, and general and research and development expenses. Fourth-quarter 2020 results were adversely affected by employee-separation expenses and impairments.   Financial Services Fourth Quarter $ in millions 2021 2020 % Change Net income $ 227 $ 186 22% Net income for financial services in the quarter rose mainly due to income earned on a higher average portfolio and favorable financing spreads, as well as improvements on operating-lease residual values. These factors were partially offset by a higher provision for credit losses. Results in 2020 also were affected by employee-separation costs. Industry Outlook for Fiscal 2022 Agriculture & Turf U.S. & Canada: Large Ag Up ~ 15% Small Ag & Turf  ~ Flat Europe Up ~ 5% South America (Tractors & Combines) Up ~ 5% Asia  ~ Flat Construction & Forestry U.S. & Canada: Construction Equipment Up 5 to 10% Compact Construction Equipment Up 5 to 10% Global Forestry Up 10 to 15%   Deere Segment Outlook for Fiscal 2022 Currency Price $ in millions Net Sales Translation Realization Production & Precision Ag Up 20 to 25% 0% +9% Small Ag & Turf Up 15 to 20% -1% +7% Construction & Forestry Up 10 to 15% 0% +8% Financial Services Net Income $870 Financial Services. Fiscal-year 2022 net income attributable to Deere & Company for the financial services operations is forecast to be approximately $870 million. Results are expected to be slightly lower than fiscal 2021 due to a higher provision for credit losses, lower gains on operating-lease residual values, and higher selling, general, and administrative expenses. These factors are expected to be partially offset by income earned on a higher average portfolio. John Deere Capital Corporation The following is disclosed on behalf of the company's financial services subsidiary, John Deere Capital Corporation (JDCC), in connection with the disclosure requirements applicable to its periodic issuance of debt securities in the public market. Fourth Quarter Full Year $ in millions 2021 2020 % Change 2021 2020 % Change Revenue $ 673 $ 693 -3% $ 2,688 $ 2,808 -4% Net income $ 181 $ 154 18% $ 711 $ 425 67% Ending portfolio balance $ 41,488 $ 38,726 7% Net income for the fourth quarter of fiscal 2021 was higher than in the fourth quarter of 2020 primarily due to income earned on higher average portfolio balances and improvements on operating-lease residual values. These factors were partially offset by a higher provision for credit losses. Fourth-quarter 2020 results were also negatively impacted by employee-separation expenses. Full-year 2021 net income was higher than in 2020 due to improvements on operating-lease residual values, a lower provision for credit losses, favorable financing spreads, and income earned on a higher average portfolio. Full-year 2020 results also included impairments on lease residual values. Safe Harbor Statement Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:  Statements under "Company Outlook & Summary," "Industry Outlook for Fiscal 2022," "Deere Segment Outlook (Fiscal 2022)," and other forward-looking statements herein that relate to future events, expectations, and trends involve factors that are subject to change and risks and uncertainties that could cause actual results to differ materially. Some of these risks and uncertainties could affect particular lines of business, while others could affect all of the company's businesses. The company's agricultural equipment businesses are subject to a number of uncertainties, including certain factors that affect farmers' confidence and financial condition. These factors include demand for agricultural products; world grain stocks; weather conditions and the effects of climate change; soil conditions; harvest yields; prices for commodities and livestock; crop and livestock production expenses; availability of transport for crops (including as a result of reduced state and local transportation budgets); trade restrictions and tariffs (e.g., China); global trade agreements; the level of farm product exports (including concerns about genetically modified organisms); the growth and sustainability of non-food uses for some crops (including ethanol and biodiesel production); real estate values; available acreage for farming; land ownership policies of governments; changes in government farm programs and policies; international reaction to such programs; changes in and effects of crop insurance programs; changes in environmental regulations and their impact on farming practices; animal diseases (e.g., African swine fever) and their effects on poultry, beef, and pork consumption and prices and on livestock feed demand; crop pests and diseases; and the impact of the COVID pandemic on the agricultural industry including demand for, and production and exports of, agricultural products, and commodity prices.  The production and precision agriculture business is dependent on agricultural conditions, and relies in part on hardware and software, guidance, connectivity and digital solutions, and automation and machine intelligence. Many factors contribute to the company's precision agriculture sales and results, including the impact to customers' profitability and/or sustainability outcomes; the rate of adoption and use by customers; availability of technological innovations; speed of research and development; effectiveness of partnerships with third parties; and the dealer channel's ability to support and service precision technology solutions. Factors affecting the company's small agriculture and turf equipment operations include agricultural conditions; consumer confidence; weather conditions and the effects of climate change; customer profitability; labor supply; consumer borrowing patterns; consumer purchasing preferences; housing starts and supply; infrastructure investment; spending by municipalities and golf courses; and consumable input costs. Factors affecting the company's construction and forestry equipment operations include consumer spending patterns; real estate and housing prices; the number of housing starts; interest rates; commodity prices such as oil and gas; the levels of public and non-residential construction; and investment in infrastructure. Prices for pulp, paper, lumber, and structural panels affect sales of forestry equipment. Many of the factors affecting the production and precision agriculture, small agriculture and turf, and construction and forestry segments have been and may continue to be impacted by global economic conditions, including those resulting from the COVID pandemic and responses to the pandemic taken by governments and other authorities. All of the company's businesses and its results are affected by general economic conditions in the global markets and industries in which the company operates; customer confidence in general economic conditions; government spending and taxing; foreign currency exchange rates and their volatility, especially fluctuations in the value of the U.S. dollar; interest rates (including the availability of IBOR reference rates); inflation and deflation rates; changes in weather and climate patterns; the political and social stability of the global markets in which the company operates; the effects of, or response to, terrorism and security threats; wars and other conflicts; natural disasters; and the spread of major epidemics or pandemics (including the COVID pandemic) and government and industry responses to such epidemics or pandemics, such as travel restrictions and extended shut downs of businesses. Continued uncertainties related to the magnitude, duration, and persistent effects of the COVID pandemic may significantly adversely affect the company's business and outlook. These uncertainties include, among other things: the duration and impact of the resurgence in COVID cases in any country, state, or region; the emergence, contagiousness, and threat of new and different strains of virus; the availability, acceptance, and effectiveness of vaccines; additional closures as mandated or otherwise made necessary by governmental authorities; disruptions in the supply chain, including those caused by industry capacity constraints, material availability, and global logistics delays and constraints arising from, among other things, the transportation capacity of ocean shipping containers, and a prolonged delay in resumption of operations by one or more key suppliers, or the failure of any key suppliers; an increasingly competitive labor market due to a sustained labor shortage or increased turnover caused by COVID pandemic; the company's ability to meet commitments to customers on a timely basis as a result of increased costs and supply and transportation challenges; increased logistics costs; additional operating costs due to continued remote working arrangements, adherence to social distancing guidelines, and other COVID-related challenges; increased risk of cyber-attacks on network connections used in remote working arrangements; increased privacy-related risks due to processing health-related personal information; legal claims related to personal protective equipment designed, made, or provided by the company or alleged exposure to COVID on company premises; absence of employees due to illness; and the impact of the pandemic on the company's customers and dealers. The sustainability of the economic recovery observed in 2021 remains unclear and significant volatility could continue for a prolonged period. These factors, and others that are currently unknown or considered immaterial, could materially and adversely affect our business, liquidity, results of operations, and financial position. Significant changes in market liquidity conditions, changes in the company's credit ratings, and any failure to comply with financial covenants in credit agreements could impact access to funding and funding costs, which could reduce the company's earnings and cash flows. Financial market conditions could also negatively impact customer access to capital for purchases of the company's products and customer confidence and purchase decisions, financing and repayment practices, and the number and size of customer delinquencies and defaults. A debt crisis in Europe, Latin America, or elsewhere could negatively impact currencies, global financial markets, social and political stability, funding sources and costs, asset and obligation values, customers, suppliers, demand for equipment, and company operations and results. The company's investment management activities could be impaired by changes in the equity, bond, and other financial markets, which would negatively affect earnings. Continued effects of the withdrawal of the United Kingdom from the European Union could adversely affect business activity, political stability, and economic conditions in the United Kingdom, the European Union, and elsewhere. The economic conditions and outlook could be further adversely affected by (i) uncertainty regarding any new or modified trade arrangements between the United Kingdom and the European Union and/or other countries; (ii) the risk that one or more other European Union countries could come under increasing pressure to leave the European Union; or (iii) the risk that the euro as the single currency of the eurozone could cease to exist. Any of these developments could affect our businesses, liquidity, results of operations, and financial position. Additional factors that could materially affect the company's operations, access to capital, expenses, and results include changes in, uncertainty surrounding, and the impact of governmental trade, banking, monetary, and fiscal policies, including financial regulatory reform and its effects on the consumer finance industry, derivatives, funding costs, and other areas; the potential default of the U.S. federal government if Congress fails to pass a fiscal 2022 budget resolution; governmental programs, policies, and tariffs for the benefit of certain industries or sectors; sanctions in particular jurisdictions; retaliatory actions to such changes in trade, banking, monetary, and fiscal policies; actions by central banks; actions by financial and securities regulators; actions by environmental, health, and safety regulatory agencies, including those related to engine emissions, carbon and other greenhouse gas emissions, noise, and the effects of climate change; changes to GPS radio frequency bands or their permitted uses; changes in labor and immigration regulations; changes to accounting standards; changes in tax rates, estimates, laws, and regulations and company actions related thereto; changes to and compliance with privacy, banking, and other regulations; changes to and compliance with economic sanctions and export controls laws and regulations; compliance with U.S. and foreign laws when expanding to new markets and otherwise; and actions by other regulatory bodies. Other factors that could materially affect the company's results include production, design, and technological innovations and difficulties, including capacity and supply constraints and prices; the loss of or challenges to intellectual property rights, whether through theft, infringement, counterfeiting, or otherwise; the availability and prices of strategically sourced materials, components, and whole goods; delays or disruptions in the company's supply chain or the loss of liquidity by suppliers; disruptions of infrastructures that support communications, operations, or distribution; the failure of customers, dealers, suppliers, or the company to comply with laws, regulations, and company policy pertaining to employment, human rights, health, safety, the environment, sanctions, export controls, anti-corruption, privacy and data protection, and other ethical business practices; introduction of legislation that could affect the company's business model and intellectual property, such as right to repair or right to modify; events that damage the company's reputation or brand; significant investigations, claims, lawsuits, or other legal proceedings; start-up of new plants and products; the success of new product initiatives or business strategies; changes in customer product preferences and sales mix; gaps or limitations in rural broadband coverage, capacity, and speed needed to support technology solutions; oil and energy prices, supplies, and volatility; the availability and cost of freight; actions of competitors in the various industries in which the company competes, particularly price discounting; dealer practices, especially as to levels of new and used field inventories; changes in demand and pricing for used equipment and resulting impacts on lease residual values; labor relations and contracts, including work stoppages and other disruptions; changes in the ability to attract, develop, engage, and retain qualified personnel; acquisitions and divestitures of businesses; greater-than-anticipated transaction costs; the integration of new businesses; the failure or delay in closing or realizing anticipated benefits of acquisitions, joint ventures, or divestitures; the inability to deliver precision technology and agricultural solutions to customers; the implementation of the smart industrial operating model and other organizational changes; the failure to realize anticipated savings or benefits of cost reduction, productivity, or efficiency efforts; difficulties related to the conversion and implementation of enterprise resource planning systems; security breaches, cybersecurity attacks, technology failures, and other disruptions to the information technology infrastructure of the company and its suppliers and dealers; security breaches with respect to the company's products; changes in company-declared dividends and common stock issuances and repurchases; changes in the level and funding of employee retirement benefits; changes in market values of investment assets, compensation, retirement, discount, and mortality rates which impact retirement benefit costs; and significant changes in health care costs. The liquidity and ongoing profitability of John Deere Capital Corporation and the company's other financial services subsidiaries depend largely on timely access to capital in order to meet future cash flow requirements, and to fund operations, costs, and purchases of the company's products. If general economic conditions deteriorate or capital markets become more volatile, funding could be unavailable or insufficient. Additionally, customer confidence levels may result in declines in credit applications and increases in delinquencies and default rates, which could materially impact write-offs and provisions for credit losses. The company's forward-looking statements are based upon assumptions relating to the factors described above, which are sometimes based upon estimates and data prepared by government agencies. Such estimates and data are often revised. The company, except as required by law, undertakes no obligation to update or revise its forward-looking statements, whether as a result of new developments or otherwise. Further information concerning the company and its businesses, including factors that could materially affect the company's financial results, is included in the company's other filings with the SEC (including, but not limited to, the factors discussed in Item 1A. Risk Factors of the company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q).   DEERE & COMPANY FOURTH QUARTER 2021 PRESS RELEASE (In millions of dollars) Unaudited Three Months Ended Years Ended October 31 November 1 % October 31 November 1 % 2021 2020 Change 2021 2020 Change Net sales and revenues: Production & precision ag net sales $ 4,661 $ 3,801 +23 $ 16,509 $ 12,962 +27 Small ag & turf net sales 2,809 2,397 +17 11,860 9,363 +27 Construction & forestry net sales 2,806 2,461 +14 11,368 8,947 +27 Financial services 869 891 -2 3,548 3,589 -1 Other revenues 182 181 +1 739 679 +9 Total net sales and revenues $ 11,327 $ 9,731 +16 $ 44,024 $ 35,540 +24 Operating profit: * Production & precision ag $ 777 $ 578 +34 $ 3,334 $ 1,969 +69 Small ag & turf 346 282 +23 2,045 1,000 +105 Construction & forestry 270 196 +38 1,489 590 +152 Financial services 299 249 +20 1,144 746 +53 Total operating profit 1,692 1,305 +30 8,012 4,305 +86 Reconciling items ** (78) (219) -64 (390) (472) -17 Income taxes (331) (329) +1 (1,659) (1,082) +53 Net income attributable to Deere & Company $ 1,283 $ 757 +69 $ 5,963 $ 2,751 +117 * Operating profit is income from continuing operations before corporate expenses, certain external interest expense, certain foreign exchange gains and losses, and income taxes. Operating profit of the financial services segment includes the effect of interest expense and foreign exchange gains or losses. ** Reconciling items are primarily corporate expenses, certain external interest expense, certain foreign exchange gains and losses, pension and postretirement benefit costs excluding the service cost component, and net income attributable to noncontrolling interests.   DEERE & COMPANY STATEMENT OF CONSOLIDATED INCOME For the Three Months Ended October 31, 2021 and November 1, 2020 (In millions of dollars and shares except per share amounts) Unaudited  2021 2020 Net Sales and Revenues Net sales $ 10,276 $ 8,659 Finance and interest income 828 867 Other income 223 205 Total 11,327 9,731 Costs and Expenses Cost of sales 7,809 6,470 Research and development expenses 450 443 Selling, administrative and general expenses 936 1,011 Interest expense 210 278 Other operating expenses 309 414 Total 9,714 8,616 Income of Consolidated Group before Income Taxes 1,613 1,115 Provision for income taxes 330 329 Income of Consolidated Group 1,283 786 Equity in income (loss) of unconsolidated affiliates 1 (28) Net Income 1,284 758 Less: Net income attributable to noncontrolling interests 1 1 Net Income Attributable to Deere & Company $ 1,283 $ 757 Per Share Data Basic $ 4.15 $ 2.41 Diluted $ 4.12 $ 2.39 Average Shares Outstanding Basic 309.1 314.1 Diluted 311.5 317.1 See Condensed Notes to Consolidated Financial Statements.   DEERE & COMPANY STATEMENT OF CONSOLIDATED INCOME For the Years Ended October 31, 2021 and November 1, 2020 (In millions of dollars and shares except per share amounts) Unaudited 2021 2020 Net Sales and Revenues Net sales $ 39,737 $ 31,272 Finance and interest income 3,296 3,450 Other income 991 818 Total 44,024 35,540 Costs and Expenses Cost of sales 29,116 23,677 Research and development expenses 1,587 1,644 Selling, administrative and general expenses 3,383 3,477 Interest expense 993 1,247 Other operating expenses 1,343 1,612 Total 36,422 31,657 Income of Consolidated Group before Income Taxes 7,602 3,883 Provision for income taxes 1,658 1,082 Income of Consolidated Group 5,944 2,801 Equity in income (loss) of unconsolidated affiliates 21 (48) Net Income 5,965 2,753 Less: Net income attributable to noncontrolling interests 2 2 Net Income Attributable to Deere & Company $ 5,963 $ 2,751 Per Share Data Basic $ 19.14 $ 8.77 Diluted $ 18.99 $ 8.69 Average Shares Outstanding Basic 311.6 313.5 Diluted 314.0 316.6 See Condensed Notes to Consolidated Financial Statements.   DEERE & COMPANY CONDENSED CONSOLIDATED BALANCE SHEET As of October 31, 2021 and November 1, 2020 (In millions of dollars) Unaudited  2021 2020 Assets Cash and cash equivalents $ 8,017 $ 7,066 Marketable securities 728 641 Receivables from unconsolidated affiliates 27 31 Trade accounts and notes receivable - net 4,208 4,171 Financing receivables - net 33,799 29,750 Financing receivables securitized - net 4,659 4,703 Other receivables 1,738 1,220 Equipment on operating leases - net 6,988 7,298 Inventories 6,781 4,999 Property and equipment - net 5,820 5,817 Investments in unconsolidated affiliates 175 193 Goodwill 3,291 3,081 Other intangible assets - net 1,275 1,327 Retirement benefits 3,601 863 Deferred income taxes 1,037 1,499 Other assets 1,970 2,432 Total Assets $ 84,114 $ 75,091 Liabilities and Stockholders' Equity Liabilities Short-term borrowings $ 10,919 $ 8,582 Short-term securitization borrowings 4,605 4,682 Payables to unconsolidated affiliates 143 105 Accounts payable and accrued expenses 12,205 10,112 Deferred income taxes 576 519 Long-term borrowings 32,888 32,734 Retirement benefits and other liabilities 4,344 5,413 Total liabilities 65,680 62,147 Stockholders' Equity Total Deere & Company stockholders' equity 18,431 12,937 Noncontrolling interests 3 7 Total stockholders' equity 18,434 12,944 Total Liabilities and Stockholders' Equity $ 84,114 $ 75,091 See Condensed Notes to Consolidated Financial Statements.   DEERE & COMPANY STATEMENT OF CONSOLIDATED CASH FLOWS For the Years Ended October 31, 2021 and November 1, 2020 (In millions of dollars) Unaudited 2021 2020 Cash Flows from Operating Activities Net income $ 5,965 $ 2,753 Adjustments to reconcile net income to net cash provided by operating activities: Provision (credit) for credit losses (6) 110 Provision for depreciation and amortization 2,050 2,118 Impairment charges 50 194 Share-based compensation expense 82 81 Loss on sales of businesses and unconsolidated affiliates 24 Undistributed earnings of unconsolidated affiliates 2 (7) Credit for deferred income taxes (441) (11) Changes in assets and liabilities: Trade, notes, and financing receivables related to sales 969 2,009 Inventories (2,497) 397 Accounts payable and accrued expenses 1,884 (7) Accrued income taxes payable/receivable 11 8 Retirement benefits 29 (537) Other (372) 351 Net cash provided by operating activities 7,726 7,483 Cash Flows from Investing Activities Collections of receivables (excluding receivables related to sales) 18,959 17,381 Proceeds from maturities and sales of marketable securities 109 93 Proceeds from sales of equipment on operating leases 2,094 1,783 Cost of receivables acquired (excluding receivables related to sales) (23,653) (19,965) Acquisitions of businesses, net of cash acquired (244) (66).....»»

Category: earningsSource: benzingaNov 24th, 2021

The 4 best drip coffee makers for a perfect cup of coffee in 2021

Drip coffee machines range from basic brewers with an on/off function to programmable, all-in-one appliances. Here are the best coffee makers of 2021. Prices are accurate at the time of publication.Dylan Ettinger/Business Insider There are many excellent choices for high-quality electric coffee makers on the market today. Using my decade of coffee industry experience, I tested 8 machines to determine which performed best. Café Specialty's Drip Coffee Maker produced the best-tasting coffee and is easy to use. Electric drip coffee makers provide the quickest, easiest way to brew coffee. But can a coffee maker help you achieve the same great cup of coffee that you can get from your favorite cafe? As it turns out, yes.Automatic coffee makers have come a long way in the past few years. As appreciation of specialty coffee in the United States has grown significantly, manufacturers of coffee makers have outfitted their products with a variety of new features, many of which are designed to emulate facets of manually brewing pour-over coffee. For example, many modern machines come equipped with a pre-infusion cycle that allows the coffee to bloom, fully-customizable temperature controls, and settings that allow you to choose your preferred brewing strength. Whether you want a coffee maker that's straightforward and simple, one that allows you to make a wide variety of drinks, or one that gives you precise control, you'll find it in this buying guide.Here are the best coffee makers in 2021:Best drip coffee maker overall: Café Specialty Drip Coffee MakerBest budget drip coffee maker: Kitchenaid 12 Cup Drip Coffee MakerBest drip coffee maker for specialty drinks: Ninja Specialty Coffee MakerBest precision drip coffee maker: Breville Precision BrewerBest coffee maker overallDylan Ettinger/Business InsiderCapacity: 10 CupsFilter type: Reusable meshDimensions: Height: 14 in, Width: 7.3 in, Length: 12.5 inSpecial features: Temperature control, Wifi control via mobile phone appSCA certified: YesPros: High build quality, easy to use, consistent performance.Cons: Expensive when compared to competitors. The sleek Café Specialty Drip Coffee Maker looks simple, but it delivers when it comes to performance. It's made primarily of stainless steel with a matte black finish, copper accents, a reusable titanium plated filter, and a vacuum sealed thermal carafe.The water reservoir holds up to 10 cups, and is outfitted with a carbon filter to ensure that any excess minerals in the water don't make it into the coffee. It also offers a temperature control option, an auto brew setting, and wifi connectivity that allows you to control the brewer remotely with a phone app. I found the controls for all these features to be intuitive and easy to use.Most importantly, this SCA certified machine (more on what that designation means here) produces some of the best coffee I tried in my tests. There are options available to brew at multiple degrees of strength, "Gold," "Light," "Medium," and "Bold," with "Gold" being the recommended setting. I tried coffee made at multiple settings and all were good, with the "Gold" and "Bold" having a more well-rounded, full flavor and a slightly heavier body. I was able to taste all the chocolate and fruit notes of the flavor profile in every cup. What makes this coffee maker the best I tested is its combination of simplicity and customizability. It's also extremely consistent — every cup of coffee brewed at every setting tasted just like it should. The only downside with this machine is the high price tag, but if you're willing to invest in a top-tier appliance, the Café Specialty won't let you down.$349.95 FROM WILLIAMS SONOMA$279.00 FROM BEST BUYOriginally $349.99 | Save 20%Best budget drip coffee makerDylan Ettinger/Business InsiderCapacity: 12 CupsFilter type: ReusableDimensions: Height: 14.34 in, Width: 7.17 in, Length: 13.4 inSpecial features: "Dosage Ladder" for easy measuringSCA certified: NoPros: High capacity, multiple options for brew strengthCons: Mostly plastic construction, fewer options than similar modelsThe unfortunate truth is that a high-quality, reliable coffee maker is not going to be cheap. At $99.99, this Kitchenaid 12 Cup Drip Coffee Maker isn't "budget" for most, but this is about the minimum amount you will have to spend on a high-performance machine. The Kitchenaid has many of the same features as our favorite, the Café Specialty, but at less than a third of the price. This coffee maker is built mostly of sturdy plastic, with a glass carafe kept warm with a heating plate. With a 12 cup capacity, it's also one of the largest we tested. It comes with a reusable filter fitted with a convenient "dosage ladder" that matches the volume of ground coffee with the desired amount of water. It's very easy to use and the controls are intuitive, allowing for a "Bold" brewing option, a timed auto brew feature and a cleaning cycle.The coffee the Kitchenaid 12 Cup produced on the normal settings was well extracted and full-flavored, which was impressive considering that it's one of the simpler machines we tested. Using the "Bold" setting made an even better cup. It was much richer with a heavier mouth feel and still maintained all of the beans' chocolatey notes. It may lack a few of the extra features of other coffee makers, but the Kitchenaid delivers delicious results at a fraction of the price.$99.99 FROM AMAZONOriginally $109.99 | Save 9%$99.99 FROM BEST BUYOriginally $109.99 | Save 9%$99.99 FROM KITCHENAIDOriginally $109.99 | Save 9%Best drip coffee maker for specialty drinksDylan Ettinger/Business InsiderCapacity: 10 CupsFilter type: Reusable and paperDimensions: Height: 15 in, Width: 8.8 in, Length: 12.5 inSpecial features: Milk frother, "Specialty" setting, iced coffee settingSCA certified: YesPros: "Specialty" brew setting and milk frother can be used to make espresso-style drinks, wide variety of brewing options.Cons: Lower build quality, mostly made of plastic.If you're looking for versatility in a coffee maker, the Ninja Specialty is the one to get. It can be operated with either a reusable filter or a paper filter. It also has a wide selection of brew sizes, from a single serving cup all the way to a full 18-ounce carafe. If you choose the former, there's a retractable platform that can hold a mug — an addition I found to be incredibly useful.Every setting is easily selected with a dial and light-up icons, along with clearly marked buttons on the face of the coffee maker. But the Ninja's most unique feature is the built-in electric milk frother, which is attached to an arm that folds out from the machine's side. This coffee maker offers multiple brew styles like "Classic," "Rich," "Over Ice," and "Specialty." Every cup I tried on both "Classic," and "Rich" settings was full-bodied and flavorful. What really sets the Ninja apart from the other machines I tested is its "Specialty" brewing feature, which produces a concentrated, 4-ounce pour of coffee. It's not quite as dense as espresso, and doesn't have crema, but I found the taste to be surprisingly similar. The "Specialty" setting paired with the built-in milk frother gives you the option to make specialty drinks like lattes. Again, it's not the same as using an espresso machine — the brewing process is completely different — but I was satisfied with my faux lattes. With a little practice I'm sure cappuccinos, cortados and flavored drinks such as mochas could also be in the rotation.$119.99 FROM AMAZONOriginally $169.99 | Save 29%$119.99 FROM BED BATH & BEYONDOriginally $169.99 | Save 29%$119.99 FROM BEST BUYOriginally $169.99 | Save 29%Best precision drip coffee makerDylan Ettinger/Business InsiderCapacity: 12 CupsFilter type: Reusable and paperDimensions: Height: 15.7 in, Width: 6.7 in, Length: 12.4 inSpecial features: High degree of customizabilitySCA certified: YesPros: Highly customizable brewing variables, high-quality build, mostly stainless steel.Cons: Precision brewing options really most useful for more experienced coffee drinkers.The Breville Precision Brewer offers unmatched control over every variable in the brewing process. It's primarily made of stainless steel with a clear plastic reservoir. The brew basket is detachable, and you can use reusable or paper filters. With a 12 cup capacity, the Breville is perfect for making large batches of coffee, but it performs well at lower volumes as well. Most of the customization is done using the small, back-lit display screen and a single dial. The screen is easy to read and the menus are simple to navigate. When it comes to brewing, the Breville offers multiple preset brewing modes; "Fast," "Gold," (the recommended setting) and "Strong". It also offers presets for making both iced coffee and cold brew. And there's an attachment available that lets you swap out the brew basket with a pourover device like a Hario V60 or Kalita Wave. For my tests, I first tried brewing a pot of coffee with the SCA recommended "Gold" setting and followed that up with the "Strong" setting. The coffee I made on both the "Gold" and "Strong" presets was fully extracted and full-flavored, with the second cup a bit darker and more robust. Beyond these presets, the thing that really sets this brewer apart is the customization available in the "My Brew" setting, which allows users to modify almost every major variable in the brewing process — including the bloom time, water temperature, and water flow rate — and then save those settings for future use. If you're looking for a coffee maker to just get the job done there are simpler and more affordable options. But for the coffee aficionado who wants complete control of the brewing process, the Breville is the best maker you can get right now.$299.95 FROM WILLIAMS SONOMA$299.95 FROM BREVILLEWhat else we consideredDylan Ettinger/Business InsiderCuisinart PurePrecision Pour-Over Thermal Coffee BrewerThis coffee maker is the clear runner-up for the overall best. The Cuisinart PurePrecision is made primarily of stainless steel with a thermal carafe, uses a reusable metal filter, and has an 8 cup capacity. It's advertised as an automated alternative to a pour-over cone, using a pre-infusion cycle, variable water temperature and brew styles to give the user more control. The coffee it makes tasted great, especially when using the "Bold" setting. If the Cafe Specialty or Breville Precision are out of your price range, this is an excellent alternative.Ninja Dualbrew ProThe Ninja Dualbrew Pro offers all the same features and brewing options as the Ninja Specialty, with the addition of an attachment that allows the user to brew coffee from pods. As far as performance is concerned, the Dualbrew Pro performed very similarly to the Ninja Specialty in my tests. The only notable drawback is the lack of a reusable filter basket with the Dualbrew Pro. Switching between the pod brewing and standard brewing functions was a little awkward , and regardless of which setting you use, there will be either a loose plastic cone or pod brewing attachment. Unless you really want the option to use coffee pods, I recommend opting for the Ninja Specialty Brewer instead.Mr. Coffee Pod + 10-CupThe Mr Coffee is another machine that provides the option of brewing coffee pods as well as ground coffee. It has most of the standard features the other coffee makers here have, like a timed auto brew function and a variable "Strong" setting. It requires paper filters which are not included, and offers a water filter that fits into the water tank. The coffee made on the "Strong" setting was significantly better than the standard cup, which seemed slightly under extracted and weak. One positive feature here is that the manufacturers provide a reusable pod that allows you to use your own fresh coffee. The overall performance of this maker doesn't warrant recommending it over any of the others. Unless having a coffee maker that brews both pods and normal ground coffee is appealing, I'd recommend the Kitchenaid or Cuisinart PurePrecision over this one.OXO 8-Cup Coffee MakerThe OXO coffee maker has a good build quality, but lacks many features standard on other products. There's no option for brewing strength and no ability to control water temperature. Because of its lack of features and trouble maintaining temperature, I have a hard time recommending this maker over others I tested. The coffee it produced was acceptable, and it performed well, but at this price point you're better off choosing the Ninja Specialty or the Cuisinart PurePrecision.Our drip coffee maker testing methodologyDylan Ettinger/Business InsiderI have around a decade's worth of experience in the specialty coffee industry. Before testing and reviewing coffee products I worked as a barista, helped open a cafe, and worked behind the scenes in packaging and distribution. For additional expertise, I spoke with Max Gaultieri, barista, roaster and founder of Joules and Watts coffee in Malibu California, and Jessica Rodriguez, who heads the Certified Home Brewer program at the SCA. The coffee makers in this guide were thoroughly tested based on the following objective criteria:Build quality: While testing, I paid attention to the quality of the build, most notably what each coffee maker was primarily made of, (stainless steel, plastic, glass, etc.) I also noted which type of carafe each used and whether they were thermal or glass kept warm with a heating plate.Brewing capacity: For this criteria, I simply noted the maximum brewing capacity for each coffee maker. The machines I tested ranged from 8 to 12 cups of brewing capacityEase of setup and use: To test this, I followed the manufacturer's instructions for setup and operation for each coffee maker. During the setup, I paid close attention to how easy each coffee maker was to set up and use and whether there were any awkward controls or components on each machine.Type of filtration: Each coffee maker uses either a reusable filter (usually plastic mesh or stainless steel,) paper filters, or has the ability to use either.  Customizability: Most of the coffee makers I tested had multiple options to customize the brewing process. Some offered a simple choice between a standard brewing option and a "rich" or "strong" option. Some coffee makers, like the Breville, offered a much higher degree of customizability over brewing variables. For each coffee maker I began by using the recommended brewing preset, usually referred to as the "Medium," "Standard," and "Normal" settings. I then did a second test, again following manufacturer guidelines for any coffee maker that offered a "Strong" or "Bold" option, and tested how each cup tasted compared to the "Standard" settings. Most importantly, I wanted to make sure both of these options with every coffee maker were extracted properly and were not under or over developed.Consistency and flavor of coffee: Taste is ultimately subjective, so I looked primarily at whether each brewer produced consistent results. After testing with manufacturer recommended ratios, I used SCA standards to see if each brewer met expectations for each brewing variable. I pre-measured the coffee and water at the recommended ratio of 1 part coffee to 18 parts water. I used the recommended ratio of coffee to water to make a batch of 8 cups of coffee (8 cups is the maximum batch size that all the coffee makers had in common).  I used a kitchen scale and measured both the coffee and water in grams. I used 60.4 grams of ground coffee to 1088 grams (8 cups) of water. For each test, I timed how long the brewing cycle lasted. I also tested the water temperature in the brew basket after one minute of brewing time, in order to see how close the heating element was able to heat the water to the desired range of 195° - 205°F, and to find out roughly how long it stayed at the desired temperature. I again used the "Standard" option. Once finished, I noted the flavor of each cup and how well it was extracted.Additional features: After testing each coffee maker three times, I went back and tested the common special features or settings of each coffee maker. Some makers had additional brew settings set up for single-cup brewing, concentrated brewing or for making iced coffee. Others had built-in milk frothers. For this test, I looked at how easy each feature was to use and how effective they were in achieving their stated goal.To test these coffee makers I made sure to control as many variables as possible between each test. For each maker I used the Peru Eufemio Dominguez Aguilar Cajamarca from Joules and Watts coffee roasters in Malibu, California. The roast was recommended by Max Gaultieri, Joules and Watts founder and roaster, for it's balanced flavor profile with notes of chocolate cake and blackberry. The coffee was ground fresh at a medium coarseness with a Capresso Infinity conical burr grinder. The water used in each test was tap water filtered by a standard Brita filtration pitcher. Each coffee maker was tested a minimum of three times.Drip coffee maker FAQsHow do I make the perfect cup of coffee in a coffee maker?The best way to make perfect coffee is by making sure your coffee-to-water ratio is correct. You can always follow the manufacturer's instructions, and your ratio might change depending on how strong you want your coffee, but the SCA recommends a coffee to water ratio of 1:18. To get to know your machine, Max Gualtieri recommends you start with "15:1 and adjust up or down to your preference. For example, if you are using 30 grams of coffee you'll use 450 grams of water." What kind of coffee goes in a coffee maker?Any coffee can work in a coffee maker, but there are a few factors to look for that will ensure the best results. First, make sure your coffee is fresh. Most roasters print the roast date on every bag of coffee. Try to find a coffee roasted less than two weeks before you want to brew. Second, if you can, grind your coffee just before brewing. "Optimally, freshly roasted and freshly ground coffee goes into the coffee maker. Yes, grinding is an extra step and yes, it is completely worth it," Gaultieri says.Do fresh grounds in coffee makers really make a difference?"Always!" Gaultieri says. After roasting, all of the flavorful oils and sugars start to decay and the gasses inside the coffee beans leak out, creating a more dull and stale flavor. Pre-grinding your coffee long before brewing amplifies that effect. "The coffee starts to lose volatile aromatic compounds as soon as it is ground," says Gaultieri. By breaking up the beans and releasing more of the gasses and exposing the organic compounds and oils to the air, it spoils even more quickly.What variables affect the coffee brewing process?No matter how you're making your coffee, the same variables always contribute to the quality of the cup you're making. The choice of coffee, grind coarseness, water temperature, coffee-to-water ratio, brewing time and filtration method all contribute heavily to how your coffee is going to turn out. Different brewing methods require adjusting the specifics of those variables, but the most important factor is always going to be the coffee you use. "Start with quality coffee!" Gualtieri says. Make sure it's freshly roasted and freshly ground.Why is water temperature so important for brewing coffee?Water temperature has a huge effect on the coffee brewing process. Brewing at the proper temperature (195° - 205°F, 90° - 96°C) ensures that the proper amount of coffee solubles are extracted. What is blooming and why is it important?Blooming is a commonly recommended step in the brewing process when making pour over coffee. Blooming, or pre-infusing, is when a small amount of hot water is used to soak the beans in order to help release the carbon dioxide gas in the coffee. Without blooming, the CO2 bubbles released can disrupt the overall brewing process by making the ground bed uneven and lead to an uneven extraction. Many coffee makers now utilize a programmed pre-infusion process to help create a more evenly extracted and full-flavored cup of coffee.Why should I buy an electric coffee maker?Electric coffee makers may seem overly complicated and expensive when compared to manual brewing devices like the French press, or a pour-over. Electric coffee makers excel when it comes to consistency. "Both methods use the same variables to extract coffee. One difference with electric coffee makers is there isn't the human variable," Rodriguez says, "A coffee machine is programmed to do the same thing every time it is turned on, and if it is a good machine, it will do this very consistently." Electric coffee makers also often have features such as timed brewing, which can save time in the morning if your schedule is tight.Should I choose a thermal carafe or warming plate?Coffee makers often have either thermal carafes or warming plates to keep coffee warm after it's brewed. But Jessica Rodriguez warns, "The heating plate is sometimes overlooked as an element that can affect flavor. If a brewer has a heating plate to keep the carafe warm, it is really important that the plate does not raise the temperature of the brew, which can have a negative impact on the flavor." In my testing, I found that most coffee makers with thermal carafes do a great job of maintaining the temperature of the coffee for about an hour.What kind of filters should I use?Different coffee makers use different methods of filtration. The most common are reusable metal or mesh filters and single-use paper filters. Some makers even allow the user to choose between the two. The major difference between filtration types is how much of the dissolved coffee solids and oils they allow to pass through. "Filtration affects the beverage clarity which affects the body/mouthfeel sensory experience of coffee." Rodriguez says. Reusable filters have the added bonus of producing less waste and cutting long-term costs.What sets an SCA certified home brewer apart from other coffee makers?The Specialty Coffee Association (SCA) has a program that rigorously tests coffee makers and certifies the ones that perform to their standards. As Jessica Rodriguez, Certifications Program Manager at the SCA explains, "Multiple production units are submitted and tested at 1L and full capacity for adequate brew basket space to hold the SCA Golden Cup ratio of 55g/L, that they can reach and maintain a brewing temperature of 92 – 96C, the total water contact time falls between 4 – 8 minutes, the total dissolved solids of each brew falls between 1.15% - 1.45% and is consistent from extraction to extraction, and that there is good beverage clarity. Submitted brewers are also subjected to a uniformity of extraction test procedure that analyzes the spent coffee bed for the evenness of extraction." Basically, any SCA certified brewer is proven to produce high-quality, consistent cups of coffee.The best drip coffee maker deals from this guideA good cup of coffee starts with good beans and, of course, a good coffee maker. Our recommended drip coffee makers come in a range of prices, but the best ones seldom go on sale. If you're looking for the best times to shop,  try Black Friday, Cyber Monday, and Amazon Prime Day — they're all pretty reliable occasions for good coffee maker deals. During Black Friday last year, we saw our best overall pick, the Cuisinart Coffee Plus, discounted by a rare $30.Here, we've gathered up the best deals available on our expert-recommended machines:Café Specialty Drip Coffee Maker$279.00 FROM BEST BUYOriginally $349.99 | Save 20%$349.95 FROM WILLIAMS SONOMAKitchenAid 12 Cup Drip Coffee Maker$99.99 FROM AMAZONOriginally $109.99 | Save 9%$99.99 FROM BEST BUYOriginally $109.99 | Save 9%$99.99 FROM KITCHENAIDOriginally $109.99 | Save 9%Ninja CM401 Specialty Coffee Maker$119.99 FROM AMAZONOriginally $169.99 | Save 29%$119.99 FROM BED BATH & BEYONDOriginally $169.99 | Save 29%$119.99 FROM BEST BUYOriginally $169.99 | Save 29%Read more about how the Insider Reviews team evaluates deals and why you should trust us.Check out our other great coffee guidesBialettiThe best espresso machinesThe best french pressesThe best stovetop espresso makersThe best coffee grindersRead the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 22nd, 2021

The 5 best dishwashers of 2021

We consulted four experts and spent hours researching dishwashers to determine the top brands and models. Here are the best dishwashers in 2021. When you buy through our links, Insider may earn an affiliate commission. Learn more.Bosch; Frigidaire; GE; Miele; Gilbert Espinoza/Business Insider A dishwasher is one of the most time- and water-saving products you can have in your home. Through extensive research and expert interviews, we determined the Bosch SHEM63W55N is the best. Read about how we test kitchen products at Insider Picks. Table of Contents: Masthead StickyDishwashers don't just save you time and chapped hands; they keep your water (and hot-water) bill down, too. In fact, they tend to pay for themselves pretty quickly.According to Energy Star, a standard modern dishwasher requires less water than hand-washing dishes, and because it uses much hotter water, it sanitizes and kills bacteria more effectively. Therefore, a dishwasher is one of the better big-appliance purchases you can make for your home and your quality of life, especially if you're doing dishes for more than one or two place settings.I was a residential carpenter for four years and spent much of that time installing, removing, and adjusting dishwashers. I used my experience and insight from four other experts to curate a list of the best dishwashers you can buy. You can read more about our research methodology here.Here are the best dishwashers in 2021Best dishwasher overall: Bosch SHEM63W55N 300 Series DishwasherBest budget dishwasher: Frigidaire FGID2466QF DishwasherBest high-end dishwasher: Miele G 7566 DishwasherBest portable dishwasher: GE GPT225SSLSS Portable DishwasherBest countertop dishwasher: hOmeLabs Countertop Digital DishwasherBest dishwasher overallBosch; Gilbert Espinoza/Business InsiderThe sleek design, ultra-quiet operation, and the unanimous support of its brand by our experts make the Bosch SHEM63W55N the best dishwasher you can buy.Dimensions: 24" W x 24" D x 34.5" HEnergy usage: 269 kWh per yearEstimated energy cost: $25 per yearNoise level: 44 dBEnergy Star certified: YesADA compliant: NoWarranty: 1 yearPros: Extremely quiet operation, stainless steel interior tub, AquaStop leak protectionCons: Exterior is not smudge-proof, not ADA compliantWhen I consulted my experts on their most recommended brands, Bosch came up time and time again. Alexander Gurfinkel of Appliance Repair LA specifically praised the brand's usability, reliability, and technical support, putting Bosch in the top tier of residential dishwashers. The Bosch SHEM63W55N features a stainless steel interior tub, a roomy third rack, and an adjustable upper rack. The tines on the top and bottom racks can fold down to customize their storage capacity. However, all this room translates to a unit that isn't compatible with those needing special height requirements.The Bosch SHEM63W55N boasts some special features, like a quick-wash cycle that takes only about an hour, a sanitizing setting, and a leak protection feature, a system of sensors that can detect when leaks occur and instantly shuts off the water supply. I've personally come home from a long weekend to find my dishwasher had leaked onto my parents' hardwood floors, so this can be an extremely helpful feature.At only 44 dB, this dishwasher makes around the same amount of noise as a refrigerator — which is to say it's one of the quietest options you can buy. The stainless steel exterior and recessed handle give it a sleek, high-end look, and the front-facing control panel allows you to monitor its operation easily. However, the exterior is not fingerprint-resistant, so if you have active kids around, you might want to have a bottle of stainless steel cleaner on hand.Best budget dishwasherFrigidaire; Gilbert Espinoza/Business InsiderDespite its reasonable price tag, the Frigidaire FGID2466QF still provides many valuable features you see on high-end models, like a sanitizing wash cycle, fold-down tines, and a drying mode.Dimensions: 24" W x 24" D x 34.5" HEnergy usage: 268 kWh per yearEstimated energy cost: $32 per yearNoise level: 52 dBEnergy Star certified: YesADA compliant: NoWarranty: 1 yearPros: Smudge-proof stainless steel, sanitizing cycle, StayPut hinge ensures the door will not fall open or closedCons: Slightly louder than others, plastic interior tub, not ADA compliantThe fact that the Frigidaire FGID2466QF doesn't look like a budget model is one of the reasons Nick Yahoodain, CEO of Advanced Builders and Contractors, recommended it so highly.The hidden control panel and stainless steel exterior are clean and modern. The front panel and bar handle have a smudge-proof finish, which can look darker than uncoated stainless steel. If you're planning on matching your stainless steel appliances, visit a showroom or appliance store if possible to take a look yourself. The plastic interior tub is less durable and harder to clean than stainless steel, though it's likely a big reason this machine is relatively affordable. The height also isn't ADA compliant, which can be another drawback.I was impressed by its door hinge, which prevents it from falling open or closing shut when you don't want it to. The Frigidaire FGID2466QF also features fold-down tines and has a high-temperature sanitizing setting. The Frigidaire FGID2466QF uses sensors to determine how much water pressure is needed based on how dirty the dishes are — a feature you often see in high-end models. Its dual drying options allow you to choose whether you prefer heated drying or not. It can also be programmed for half loads, an energy-saving feature that Yahoodain pointed out in his recommendation. At 52 dB, it's well under the noise level of a normal conversation and, surprisingly, a typical dishwasher, which registers at around 70 dB by the CDC. Best high-end dishwasherMiele; Gilbert Espinoza/Business InsiderThe Miele G 7566 might have an intimidating price tag, but if money's no object, its top-of-the-line components, reputation for quality, and WiFi connectivity are worth it.Dimensions: 23.625" W x 22.5" D x 33.375" HEnergy usage: 230 kWh per yearEstimated energy cost: $30 per yearNoise level: 38 dBEnergy Star certified: YesADA compliant: NoWarranty: 5 yearsPros: WiFi connectivity, quiet operation, customizable tray designsCons: Not NSF certifiedGurfinkel recommended the Miele G 7566 for its high-quality and impressive five-year warranty.It features a stainless steel tub and an adjustable third rack. It also has four LEDs to illuminate the interior, making it easy to see what you're loading and unloading.The Miele G 7566 has a few special features that I haven't seen in other models — most notably, the WiFi connectivity and preset times so you can start the wash cycle even when you're not home. It also features a QuickIntenseWash, which cleans and dries dishes in 58 minutes, compared to the average normal dishwasher cycle of two hours. The Miele G 7566 runs even quieter than the Bosch at 38 dB.It looks modern and minimal with hidden controls and a stainless steel bar handle. The white LED readout gives it a high-tech look and separates it from other models that use black or red. The surface should also be easy to clean and maintain.This model is not officially NSF-certified to sanitize glassware, cookware, and dishes, though its SaniWash cycle reaches 167 degrees. This exceeds the 150 degrees that NSF requires for certification, and the Miele manual describes this cycle as intended for "baby bottles, cutting boards, and prepared dishes," but you won't have the peace of mind that comes from an official NSF certification.Best portable dishwasherGE; Gilbert Espinoza/Business InsiderEven though it's a portable model, the GE GPT225SSLSS has the sleek look of a built-in unit, features a Piranha hard food disposer, and is mounted on four swiveling casters for easy transport.  Dimensions: 23.625" W x 25.375" D x 36 " HEnergy usage: 270 kWh per yearEstimated energy cost: $35 per yearNoise level: 54 dBEnergy Star certified: YesADA compliant: NoWarranty: 1 yearPros: Can be used as a countertop, Piranha hard food disposer, stainless steel tubCons: Louder than most modelsPortable dishwashers can often look conspicuous in the kitchen. The GE GPT225SSLSS dishwasher's controls are hidden, which gives the unit a modern, utilitarian look. It has a laminate wood top, which you can use as a countertop or workspace.My favorite feature of the GE GPT225SSLSS is the Piranha hard food disposer. This heavy-duty stainless steel blade grinds up any large food particles that may have been left on your dishes, ensuring that they'll easily fit down the drain. The dishwasher also features a durable stainless steel interior tub.The auto-sense cycle uses a beam of light to determine how dirty your dishes are and adjusts the water temperature to set an ideal cycle time. The GE GPT225SSLSS also has a sanitizing cycle, which uses high temperatures to reduce bacteria by 99.999%.  Because they lack the noise-deadening benefits of surrounding cabinets, portable dishwashers tend to be louder than built-ins. The GE GPT225SSLSS is the loudest of all the units I researched.One of the biggest perks of having a portable dishwasher is its simple installation. Unlike built-in models that need to be connected to existing plumbing fixtures, the GE GPT225SSLSS just needs to be plugged into an outlet and connected to your sink faucet. Gurfinkel agreed that when it comes to portable dishwashers, this GE model is a solid choice.Best countertop dishwasherhOmeLabs; InsiderDespite its small size, hOmeLabs' Countertop Digital Dishwasher has seven program settings and is Energy Star certified.Dimensions: 21.6" W x 20.2" D x 17.2" HEnergy usage: 203 kWh per yearNoise level: 50.44 dBEnergy Star certified: YesADA compliant: NoWarranty: 1 yearPros: Easy to hook up, six-place-setting capacity, seven different wash settings, relatively quietCons: No independent water reservoir (must be connected to your sink faucet)A countertop dishwasher is a remarkably useful appliance for smaller spaces, and hOmeLabs' Countertop Digital Dishwasher has an impressive six-place-setting capacity for its size.While it's not exactly small — it's going to take up about as much counter space as a full-sized espresso machine — this dishwasher is stainless steel, not hideous, and relieves you of most all of the dishwashing duties a full-sized dishwasher does.You'll have to keep it near your sink or be willing to move it (at 42.5 pounds, that might be out of the question for some), as it has no internal water reservoir. But in our research, we found that dishwashers with internal reservoirs, however appealing, tend to be problematic.The hOmeLabs Digital Countertop washer comes with a digital control panel with seven different program settings: heavy (for heavily soiled crockery), normal, eco (for lighter loads), high temp (for sanitizing things like baby bottles), quick wash (a short wash that skips the drying cycle), glass (lighter soiling and gentler washing), and rinse. Essentially, it does everything its bigger siblings do, but it doesn't take up the space or power and doesn't require the pressure. (6 PSI from your faucet will get the job done.)For under $400 and no installation hassles or fees, you're saving yourself some serious work with a countertop dishwasher.Our dishwasher research methodologyBosch; Frigidaire; GE; Miele; Gilbert Espinoza/Business InsiderI wasn't able to physically test these dishwashers myself, so I leaned on my kitchen remodeling experience and background as a general contractor. I also consulted four experts for brand and model recommendations and criteria that I could use to compare and contrast models as I did my research. I consulted a food safety expert, Kaylyn Brunskole, the technical manager of Food Equipment at NSF International. I also reached out to an appliance retailer, Albert Safaradi of Albee's Appliances; a home remodeling expert, Nick Yahoodain, CEO of Advanced Builders and Contractors; and an appliance repair expert, Alexander Gurfinkel of Appliance Repair LA. After consulting experts, I developed a set of criteria to use to compare potential options, including their appearance, construction, installation details, special features, energy use, noise levels, certifications, and repair and warranty details. I then spent hours rigorously researching the most popular options from online retailers and read countless best-of lists and customer reviews, developing a list that I vetted with my experts and removing ones that didn't meet their criteria. The result is four expertly-vetted dishwashers.How to install a dishwasherDishwasher installation is a pretty straightforward process, so if you've got a reasonable amount of experience working with appliances, you should be alright to DIY. Gurfinkel explained that a YouTube video and proper equipment like a hose and a wrench can be enough. Issues may arise if your original dishwasher wasn't installed properly and can't be removed; this will require breaking countertops and floors, and above all else, a professional.If you'd rather have a professional install your dishwasher entirely, Gurfinkel recommended going with a local installer, as they tend to care more about how the installation goes.Dishwasher FAQsThe Home Depot; Gilbert Espinoza/Business InsiderWhen should I use a dishwasher?This is ultimately a personal preference, but there are smart ways to use your dishwasher so you're not wasting money or water. Run your dishwasher when you have a full load — that means when the upper, middle, and lower racks are full. If you use a dishwasher when it barely has anything to clean, you can easily run up your water bills.How do I load a dishwasher? Most dishwashers have an upper spray arm that rotates to ensure jets of hot water spread evenly. But if you pile pots and pans too high on the bottom rack, the spray arm may not be able to spin. Reach in and give it a quick spin before starting the clean cycle to ensure it can move freely. If it gets caught on something, adjust the load.Do you need to rinse dishes first? Even though you might think you're helping by rinsing off your dishes before putting them in the dishwasher, you could actually be making it less effective. This is because the sensors that some dishwashers use to determine how long a cycle should run and how much water to use can be fooled by pre-rinsed dishes.What types of dishwashers are there? Built-in: These are the most common types of dishwashers. They are designed to be installed in a dedicated area under your kitchen counter and are connected to permanent plumbing hookups.Portable: Portable dishwashers are freestanding units that hook up to your faucet and sit on wheels and can be moved around as you like.Countertop: For those who are really tight on space, countertop dishwashers are even more convenient than portable options. They connect right to your kitchen faucet and use less water than full-size dishwashers.What sizes of dishwashers are there?"Dishwasher dimensions are standard: 23.75 inches wide by 33.625 inches high by 24.625 inches deep," Safaradi said. ADA-compliant units are 24 inches wide by 34.5 inches high by 24 inches deep. Compact-sized dishwashers tend to be about 18 inches wide.How long should a dishwasher last? "On average, you can expect a dishwasher to last you about 10 years with potential maintenance in between," Yahoodain said. Gurfinkel's caveat to that is how you use them, so make sure to follow the manufacture's guidelines for optimal operation. Stainless steel tubs will last longer than plastic ones.Is a front or top-mounted control panel better?This is really just a matter of personal preference. Some people like the minimal look of the top-mounted design, and it also prevents curious kids from pressing buttons at random. Top-mounted units will sometimes direct a red light on the floor to indicate that it's not finished yet, but that doesn't tell you how much time is left in the cycle. What certifications should I look for? One of the ways to effectively clean and sanitize dishes is to use a dishwasher with a NSF/ANSI 184: Residential Dishwashers certification. A dishwasher with a certified sanitizing cycle has been tested to reduce 99.999% (5-log) of bacteria. Lastly, depending on where you live, you might qualify for certain rebates to cut costs and energy use.How to clean your dishwasherCleaning your dishwasher "depends on the type of dishwasher, finish (stainless, plastic, or a mix), and the type of filter which catches leftover food in the machine," said Yahoodain.If your appliance isn't cleaning as well as it used to, check the filter at the bottom of the unit. You should clean it monthly to keep it free from food particles.I have personally had success using a simple warm water and vinegar mixture and using a dishrag to wipe down the interior components. That being said, make sure to read the manufacturer's instructions first.  You can also buy dishwasher cleaning tablets, like these from Affresh, to keep build-up at bay. There are a few different types that work for different brands, so make sure you get the right one. Try to clean your dishwasher once a month.GlossaryThe Home Depot; Gilbert Espinoza/Business InsiderWash zone: Your dishwasher has multiple areas that can be washed in different ways — these are wash zones. Typically a dishwasher will have two wash zones, the upper and lower racks, giving you the option to wash both or just one. This comes in handy when you only have half a load of dishes to clean.Filter: Your dishwasher filter prevents pieces of food from ending up back on your dishes or clogging your drain. These can be either self-cleaning or manual versions, so make sure to follow the manufacturer's instructions on how to keep them clean. Sensor wash: Using a beam of light to analyze your dishes, sensor wash dishwashers can determine the best cycle, temperature, and duration to clean specific dish loads.  Lower rack: This is the main storage area of the dishwasher and is used for items like plates, pots, pans, and larger bowls. Top rack: This is the second rack of the dishwasher and is used for cups, glasses, and oddly shaped utensils that may be too tall for the bottom rack. Third rack: Located at the top of the dishwasher, this is a thin tray that slides out and provides the ideal space to lay down smaller or irregularly shaped items. A third rack can sometimes act as the utensil basket, freeing up valuable space on the bottom rack.Spray arms: These are long narrow fan-like blades with several holes where the jets of hot water come out. Most dishwashers have upper and lower spray arms. The lower spray arm is usually fixed, but the upper spray arm rotates to ensure an even clean.Settings: Each machine has different settings, but these are among the most common based on my research. Normal: The standard cycle that should be used for typical, moderately soiled loads. The duration can vary depending on the machine, but on average lasts about two hours.Eco: Lower washing and rinsing temperatures to minimize the amount of energy and water used. This cycle can take longer than normal, up to 2.5 hours.Auto: A sensor analyzes how soiled the dishes are and selects the best cycle. Quick wash: This setting uses more water and higher temperatures to get your dishes done quickly, though this can sometimes result in less effective results than a normal wash. This cycle can usually run between 30 and 60 minutes.Sanitize: Uses extra-hot water (above 150 degrees F) to sanitize your dishes and destroy bacteria. This is recommended when washing dishes that have come in contact with raw meat or any other source of potential bacteria. This cycle is usually used in addition to another cycle and should add about 30 minutes to the wash time.Pots and pans: This setting uses extra water to ensure your extra-large cookware is cleaned effectively. This cycle tends to run about 2.5 hours.Check out more guides to kitchen appliances and fixturesThe Home DepotThe best kitchen faucetsThe best kitchen sinksThe best refrigeratorsThe best microwavesThe best wine coolers and fridgesRead the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 17th, 2021

Why the F-14 Tomcat didn"t survive the Cold War

The F-14 Tomcat was highly advanced, but without the Soviet threat, it didn't make much sense to keep it. A specially painted F-14D Tomcat over the Persian Gulf, October 10, 2005.US Navy/Lt. j.g. Scott Timmester In the 1970s, the US had three revolutionary fighters enter service: the F-14, F-15, and F-16. The F-15 and F-16 remain in service and in production, but the F-14 has long since retired. The F-14 Tomcat was highly advanced, but without the Soviet threat, it didn't make much sense to keep it. In the 1970s, the United States had three revolutionary fighters enter service in the F-14 Tomcat, F-15 Eagle, and F-16 Fighting Falcon.Today, two of these platforms remain not only in service, but in production, with only the Top Gun F-14 relegated to museum duty.Today, plenty of airplane nerds (like this author) still count the F-14 Tomcat among their favorite aircraft of all time … so what gives? Why was Maverick's ride not only retired early by very literally being fed into the industrial shredder while the Eagle and Viper continue to roll off assembly lines to this day?The truth is, the F-14 Tomcat was a highly advanced fighter that was really purpose-built for a world-ending nuclear conflict. When you look back on the program, its challenges, and subsequent solutions, the image becomes a bit clearer.The F-14 made sense when we were on the verge of World War III … but without a Soviet boogeyman to keep Uncle Sam's pocketbook upturned and shaking, it became an incredibly expensive and sometimes problematic solution to a problem nobody had anymore. And to make matters worse, only a portion of the F-14 fleet was ever as capable as most of the world believed.But to be completely clear, it was still one hell of a jet.The F-14 Tomcat's target was Soviet bombersAnF-14D, armed with two AIM-9 Sidewinder missiles, a GBU-10 Paveway II laser-guided bomb, and a LANTIRN Pod, over Afghanistan, November 7, 2001.US Air Force/SSgt. Michael D. GaddisThe Grumman F-14 Tomcat was an incredibly capable aircraft, and with good reason. In an era before Intercontinental Ballistic Missiles (ICBMs) had matured into the go-to nuclear weapon delivery vehicle they would become, the Tomcat was designed in large part to neuter the Soviet Union's most potent means of putting nukes on American soil: their fleet of strategic bombers.In the present tense, the idea of a foreign power flying bombers over the continental United States seems practically impossible, thanks is no small part to America's broad military footprint, advanced detection technology, and today's geopolitical climate. That wasn't the case at the peak of the Cold War.The threat posed by Soviet long-range bombers was so dire, in fact, that before air-to-air missiles had become prevalent in the 1960s, the US actually developed a rocket-propelled air-to-air nuclear weapon that would wipe out entire formations with a single launch.With the threat of Soviet bombers armed with nuclear weapons or anti-ship missiles at the forefront of their minds, Grumman designed the largest and heaviest carrier fighter in history, with a fair amount of that weight dedicated to the new Phoenix missile and the onboard systems required to leverage it.When fueled up and ready to go, the F-14 weighed in at 61,000 pounds, which is almost twice that of the future F/A-18 and quite a bit more than twice the weight of a fully-fueled F-16 Fighting Falcon.Despite all of that heft, the Tomcat still needed to be fast, so Grumman paired the F-14 with Pratt & Whitney's TF30 engines originally fitted to the F-111B they had failed to sell the Navy on. Each engine could produce 14,560 pounds of thrust under military power, with the afterburner kicking output up to 25,100 pounds.All told, the F-14 could use that combined 50,000+ pounds of thrust to push the aircraft to an astonishing Mach 2.3, and its variable-sweep wing design gave it excellent handling at both the low speeds required for carrier landings and the high speeds needed to intercept Ivan before he could deploy his anti-ship missiles toward an American carrier.Thanks to that variable-sweep wing design, the F-14 could turn tighter than most of its capable 4th-generation competition, including the small and nimble F-16 under the right circumstances. That meant it could not only cover ground quickly to engage Soviet bombers, the Tomcat really could dogfight and win if called upon to do so.'A nice aircraft powered by two pieces of junk'Sailors aboard USS Abraham Lincoln prepare an F-14D for flight operations during Operation Iraqi Freedom, March 24, 2003.US Navy/Photographer's Mate 3rd Class Michael S. KellyFor all its capability, the Tomcat could also be troublesome. The TF30 engines were indeed powerful, but they were also arguably too sensitive for the job.They'd been designed for an even heavier application in the 80,000 pound F-111B, but that platform was more bomber than fighter. Bombers need powerful engines to carry their payloads at combat speeds, but they also have very different flight envelopes than fighters.When operated at high angles of attack, or when the pilot adjusted the throttle position quickly (both common facets of the air combat the jet was built for but uncommon in bomber missions), the engines were prone to compressor stalls. This issue led some to call the Tomcat, "a nice aircraft powered by two pieces of junk.""From the very start you essentially teach the pilots to fly the engine as a priority over flying the airplane," Capt. Lee Tillotson, the Navy's F14 program coordinator, told The Washington Post in 1984."The pilot has to be very aware of what he does with the throttle at all times."More troubling still, with the engines mounted a vast 9 feet apart to allow for greater lift and more weapons carriage space, a stall in one engine could throw the aircraft into an often unrecoverable flat spin. These issues led to the loss of a whopping 40 F-14s in all.But it wasn't just the stall issue plaguing the engine's in Maverick's ride. The turbine blades inside the engine were also prone to failure long before their anticipated service life expired, causing catastrophic damage to the engine and putting pilots' lives at risk.Navy Secretary John F. Lehman Jr. went on to say the TF30 engine "in the F-14 is probably the worst engine-airplane mismatch we have had in many years. The TF30 engine is just a terrible engine and has accounted for 28.2 percent of all F14 crashes."Today, we may look back on the F-14 with wistful awe, remembering how it was the only fighter that could stand toe-to-toe with the (fictional) MiG-28. But when it was in service, not everybody loved the Tomcat."The sooner we are out of it, the happier I will be," Lehman told Congress in 1984. "I guess the good news is that all the Iranian F-14s have the TF30, too."In 1987, F-14s began receiving new engines in the General Electric F110, which offered more thrust and eliminated many of the reliability problems associated with the TF30.These improved F-14Bs and the subsequent F-14Ds were very much the Tomcat of "Top Gun" fame, and as a result, you'll often find Tomcat fans dismissing the TF30's woes as a problem specific to the F-14A in the early days of operation.The truth is, a yoyoing budget made the transition from the TF30 to the F110 slow going.By 1996, nine years after the F110 entered service in the F-14, the Navy F-14 fleet included just 126 Tomcats with the new GE engines, while the other 212 were still flying on the troublesome TF30. In fact, F-14A's running the TF30 were still flying for the Navy until as late as 2004.The problem with a variable-sweep wing designA F-14 during flight testing.US Navy/San Diego Air and Space MuseumThe F-14's variable-sweep wing design is one of the aircraft's most striking visual characteristics, and there's no denying that the premise behind it makes sense. The wings could vary from 20 degrees to 68 degrees while airborne to allow for the best possible flight characteristics at both low and high speeds.Wing positioning was controlled automatically by the Central Air Data Computer onboard, ensuring the wings were positioned for the best possible lift-to-drag ratio for each situation, but they could also be controlled manually by the pilot.As you can imagine, a system that capable and advanced was not only complicated and heavy, it also required quite a bit of upkeep. Depending on the Navy estimate, the F-14 Tomcat required between 30 hours and 60 hours of maintenance for every one hour it spent in the air.The high prices associated with maintaining the complicated sweep-wing systems is often cited as one of the most pressing reasons for the Tomcat's early retirement when compared to its American fighter peers.But while maintenance costs may have been the biggest issue with the F-14's wings, price wasn't the only thing people complained about.While adjustments to wing position were rapid and automatic, pilots training against Tomcats in F-15s and F-16s soon began reporting that the shifts in wing position helped them quickly assess the F-14's energy state and momentum during maneuvers.Like a boxer telegraphing his punch, the F-14 Tomcat telegraphed its maneuvers, making them easier for skilled and experienced opponents to read and predict.The Phoenix missile wasn't much use against fightersAnF-14A launching an AIM-54 Phoenix missile in 1991.US NavyHad the Navy been forced to put their F-14s in to combat, it's likely the branch would have lost more aircraft to engine failures than it would have to enemy fire, and even its incredible Phoenix missile was unlikely to change that fact.While later F-14 iterations like the F-14B and F-14D came with better engines, a digital cockpit, and improved avionics, a good portion of the fleet operated sub-standard TF30 engines for the majority of the fighter's service life.These jets were limited to just 6.5G maneuvers in order to alleviate concerns about the compressor stalls in the engines, but that put the Tomcat at a distinct disadvantage against modern fighters like the F-15, which were rated to exceed 9 Gs.Some, however, still contended that the F-14 Tomcat didn't need to be acrobatic thanks to its amazing new weapon system: the Phoenix missile.The famed AIM-54 Phoenix missile and AN/AWG-9 radar developed specifically to leverage it really does deserve the respect its gained over the years.The AN/AWG-9 radar could identify and track up to six targets from 100 miles out, and when armed with six AIM-54 Pheonix missiles, the F-14 could deploy all of its weapons in just 38 seconds. It was an air-to-air weapon without equal in its day, but it just wasn't really intended for use against enemy fighters.The AIM-54 Phoenix was 13 feet long, 15 inches in diameter, and technically had a maximum range of 125 miles (though targeting was limited to 100). It was dropped like a bomb before igniting its massive engine, which would immediately propel the missile up to 80,000 feet where it would close with its target and use its kinetic energy to guide it down into its intended target.This approach to long-range engagements would work against large, slow moving, prop-driven bombers like those employed by the Soviet Union but weren't much use against faster and more nimble fighters. Covering such long distances just gave enemy fighters too much opportunity to recognize that they were targeted and take sufficient evasive action.In January 1999, two F-14s each fired one Phoenix missile at two Iraqi MiG-25s, only to have both miss. Later that same year, another F-14 fired a Phoenix at a MiG-23, only to miss once again. No F-14 ever shot down an enemy aircraft with the missile it was designed to carry.The F-14 made the F-35 seem like a bargainAn F-14D performs a fly-by past USS Dwight D. Eisenhower in the Atlantic Ocean, June 19, 2006.US Navy/Photographer's Mate Airman Dale MillerWhen we hear discussion about the F-14 being an expensive aircraft, it almost rings hallow in this era of trillion-dollar fighter programs like Lockheed Martin's F-35 Joint Strike Fighter, but just like it's hard to compare box office returns for movies released decades apart, inflation has a way of robbing the shock value from dated figures.So in the interest of context, let's convert these F-14 price points to 2021 figures.The Navy's first batch of F-14As rang in at $38 million per aircraft in 1973. That sounds pretty cheap compared to around $88 million for a new F-15EX these days, but when you adjust that number to reflect nearly five decades of inflation, you get a downright shocking figure of more than $234 million per F-14 Tomcat.The F-35's initial production run per-unit cost was also quite high, but still more than $10 million less than the Tomcat, at $221 million per fighter. By 1988, 13 years later, the F-14D cost $74 million per airframe, which adjusted for inflation brings the Tomcat's price down to $171 million per aircraft in today's dollars.Last year marked 13 years since the F-35's first production batch, with per-unit prices of the F-35A now at around $78 million per airframe — $93 million less than the F-14 per jet.When you see these numbers for what they really are, you begin to appreciate just how potent a threat the United States saw Soviet bombers to be. These prices were considered justifiable as a means of staving off the end of the world, but after the fall of the Soviet Union, the apocalypse seemed to be on hold for the foreseeable future.The F-14 Tomcat was anything but junkAn F-14D aboard USS Theodore Roosevelt completes the final catapult launch of an F-14, July 28, 2006.US Navy/MCS3 Nathan LairdIf you started reading this article with a special place in your heart reserved for the F-14, you may be grinding your teeth by now — but it's important to remember that being expensive and problematic doesn't mean the Tomcat wasn't also a mind-boggling performer with no real peer in its era. Again, it pays to draw comparisons between Maverick's fighter and the modern F-35.Today, you don't have to go far to find people calling the F-35 a failure because of cost over-runs, production delays, and some early reports of the fighter's poor performance against older jets. The people you won't find calling the F-35 a failure, however, are the men and women who fly the 5th-generation powerhouse in combat.The F-35 is just too different to grade using the same metrics we use for fighters like the F-15. It relies on technology, not brute force, to win fights — and effective as that approach may be, it doesn't make for exciting press releases.The F-14 Tomcat also had a troubled development run and sometimes got beat up by America's other fighters in wargames, but like the F-35 … it was built to do things no other fighter was capable of doing at the time.When the F-14 first took to the skies, it was bigger, heavier, and could carry more ordnance than any carrier fighter in history. It could track and engage enemy bombers from triple-digit ranges in a time when many national Air Forces were still focused on guns and cannons for air-to-air fighting. Through subsequent upgrades, it was on the cutting edge of avionic systems and eventually even picked up respectable air-to-ground capabilities like its multi-role peers.But reaching so far ahead is expensive … and ultimately, it's dollars and cents that dictate the makeup of America's fighter fleets. Could the F-14 have been modernized, upgraded, and improved to still be flying today? Of course it could. But like the bringing the F-22 Raptor back from the dead … sometimes it would cost more to keep a really good older fighter than it would cost to design and build a great new one.The F-14 may have had a short shelf-life compared to some of its sister jets of the 70s, but there's no denying … the mighty Tomcat's presence had lasting effects on naval aviation and even on foreign relations around the world.The F-15 and F-16 may have gotten to stick around longer, but the F-14 will always be the Top Gun for some of us.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 17th, 2021

8 things we"re looking forward to at the Dubai Airshow this week

Insider is attending the Dubai Airshow this week to get a firsthand look at the latest innovations in the aviation industry. The Dubai Airshow is the first international airshow of the pandemic. AP Photo/Kamran Jebreili Insider is attending the Dubai Airshow, which hosts some of aviation's latest and greatest innovations. Boeing is showing off its 777X, the world's largest twin-engine aircraft. Airbus is bringing its largest twin-engine jets. Private aviation, military aircraft, and cargo will also be major themes this week. DUBAI - The Dubai Airshow officially kicked off on Sunday, marking the start of the first international airshow of the pandemic.International air shows are a time for aircraft manufacturers to show off their latest innovations, while airlines and other aircraft operators display their newest purchases and often make new ones. And with nearly two years without this type of meetup, there's plenty for the industry to catch up on.In the commercial aviation realm, Boeing and Airbus are - unsurprisingly - the main attractions with support from their airline partners. But smaller players including Brazil's Embraer and Russia's Irkut Corporation are also in attendance with the hopes of winning orders for their competing products, offering airlines an alternative to the biggest in the business.Private aviation is another focus, with manufacturers like Dassault Aviation and Bombardier showing off their new flagship business aircraft. Private charter firms, including Comlux and VistaJet, will also make the case for why their high-end aircraft are worth thousands of dollars an hour to charter.And of course, the military, space, and defense industrial complexes will be present, with the US, Indian, French, Japanese, and UAE militaries bringing what amounts to a small air force in a display of military might. That's all in addition to the startups filling the convention hall that promise to revolutionize the aviation industry.Insider is on the ground at the Dubai Airshow. Here's what we're most looking forward to in the commercial, cargo, and private aviation realms.1. Boeing's latest and most controversial aircraft on display The first flight of the Boeing 777X. Stephen Brashear/Getty The Boeing 777X is making its first-ever international debut and will be welcoming select attendees onboard for a sneak peek at what's to come from the landmark aircraft. Insider is those invited onboard for a first look.The ultra-modern variant of the popular Boeing 777 family of aircraft promises increased efficiency and additional seating capacity to its previous generation sibling. And in addition to the 777X being the largest twin-engine plane slated to fly passengers, the two GE Aviation GE9X engines will be the largest commercial aircraft engines in the world.Boeing will also perform a flying display with the aircraft to demonstrate its capabilities to a crowd that's been following the aircraft's journey, through its delays and all, since its first flight in early 2020.The 777X's presence in Dubai is likely an homage to Emirates as the launch customer and soon-to-be largest operator of the aircraft. More than 100 777X will fill the Emirates fleet in the next few decades, based on its current order.Boeing would also be hoping to land additional orders for the aircraft that's already garnered interest from the world's leading carriers. But orders for the smaller 777-8 will be key as most existing orders are focused on the larger 777-9.The Boeing 737 Max is set to be a prominent feature at the Dubai Airshow with two static aircraft on display. Boeing, in partnership with Alaska Airlines, is displaying the 737 Max 9 EcoDemonstrator aircraft that is being used to test new technology aimed at reducing the aviation industry's carbon footprint.Alternatively, the UAE's own FlyDubai is set to have its 737 Max on display as the region's largest operator of the model. The budget carrier recently unveiled a new business class cabin for the aircraft including lie-flat seats, pushing the bounds of comfort on a narrow-body aircraft in a way most 737 Max operators have been unwilling to do.The Max displays come less than a year since the Federal Aviation Administration ungrounded the aircraft following two deadly crashes that resulted in the loss of 346 lives, attributable to a Boeing software issue.Boeing's newest military aerial refueler, the KC-46 Pegasus, will also be on display as part of the US Air Force delegation. The aircraft has been plagued with scandal that's benefited its rival, Airbus and the A330 Multi-Role Tanker Transport, the Airbus refueler which will also be at the Dubai Airshow.2. Emirates giving the world's largest passenger jet a new lease on life An Emirates Airbus A380. Soos Jozsef/ The Airbus A380 hasn't fared well during the pandemic as it quickly became a symbol for the opulence and excess that airlines needed to cut. And the result was groundings en masse for the likes of Qantas, Singapore Airlines, Lufthansa, and more.Airbus, meanwhile, had already been drawing down production of the A380 with the final deliveries slated to All Nippon Airways and Emirates as the final two airlines still taking deliveries. The numbered days of the A380 appeared to dwindle as air travel recovered.Emirates, however, announced a new investment in A380 to see to give it a brand new passenger cabin. All classes of service will see enhancements and a new premium economy class is being added.One of the newly-refreshed A380s will be in attendance at Dubai. Insider will be on board.3. The best of private aviation with one notable exception A VistaJet Bombardier Global 7500. Dominick Gravel/VistaJet Bombardier will show off its flagship business aircraft, the Global 7500 jet, which holds the title of the largest and longest-ranged purpose-built private jet currently in service. Both Bombardier and long-time customer VistaJet will have the Global 7500 on display.Insider will be sitting down with Bombardier's new CEO, Eric Martel, to talk about the manufacturer's shift to an all-aviation product line.Dassault Aviation will have two aircraft on display including a cabin mock-up of the Falcon 10X, its soon-to-be largest private jet set to go up against leaders from Bombardier and Gulfstream. Industry experts are particularly excited about the Falcon 10X given its performance capabilities, interior design, and overall spacious cabin.Gulfstream is not attending this year's Dubai Airshow, and its absence is notable given the manufacturer has three new aircraft currently in development. Most notably, the Gulfstream G700 that made the rounds over the summer on a global tour will not be making the trek to Dubai.But even with three new aircraft in the pipeline, Gulfstream is ceding Dubai to its French, Canadian, and Brazilian rivals. Boeing is bringing one of its 737 airliner-turned-private-jets, known as Boeing Business Jets, to Dubai, but it won't be on display at the airshow. Rather, select attendees, including Insider, will be shuttled to Dubai International Airport for tours.Airbus, for its part, will show off an Airbus Corporate Jet 320neo, the private jet variant of the A320neo airliner. These flying penthouse apartments are intended for a particularly wealthy type of traveler than can afford the ultra-high expense of purchasing and maintaining an airline for private use.Embraer is showing off its Praetor 600 super-midsize aircraft that's becoming popular with major private jet firms including Flexjet.Aircraft completion specialist Citadel Completions will also bring a rare private jet to the skies, another airliner-turned-private jet based on the Airbus A340-500 airliner. The four-engine private offers a nearly unbeatable combination of living space and range, with the A340-500 a former favorite of airlines to fly ultra-long-haul routes.Other private aircraft manufacturers in attendance include Pilatus, Irkut Corporation, Textron Aviation, and Tecnam.4. A Brazilian and European rivalry on full display An Embraer E195-E2 aircraft. fifg / Airbus and Embraer will both bring their next-generation aircraft that are fighting for control in the 100-150-seat market.Embraer is bringing its Embraer E195-E2 demonstration aircraft, featuring a special paint livery with a tiger on the nose and called the "Profit Hunter." Sales have been poor when compared to Airbus despite Embraer touting better operating economics over its Airbus competitor.Airbus and Air Baltic will be showing off the Airbus A220, formerly known as the Bombardier CSeries. Airlines around the world have fallen for the A220 while Embraer has struggled to keep up commercially. It's been losing long-time customers, including JetBlue Airways and Air Canada to the Airbus jet.5. Russia's answer to the Boeing 737 Max and Airbus A320 family of aircraft An Irkut Corporation MC-21. fifg / Russia's Irkut Corporation is nearing the finish line on a new jet to compete against Boeing and Airbus' 150-to-200-seat aircraft market. The MC-21 is made with composite materials and powered by turbofan engines. It's unlikely that a Western airline will place an order but the jet could show promise in Europe and Asia. 6. Israel comes to town Israel Aerospace Industries' Boeing 777-300ER "Big Twin" cargo plane. Israel Aerospace Industries Israel is set to have a major presence at the Dubai Airshow for the first time in the event's history. The recent easing of tensions between Israel and the UAE under the Abraham Accords paved the way for Israel's attendance.Israel Aerospace Industries is one Israeli company that will make its first-ever journey to the Dubai Airshow, highlighting its experience in defense systems, passenger-to-cargo aircraft conversations, and maintenance and repair operations.7. Never-before-seen aircraft An Etihad Airways Boeing 787-9 Dreamliner aircraft in July 2019. Nicolas Economou/NurPhoto via Getty Images Etihad Airways is bringing the Airbus A350-1000 XWB to Dubai in a first-ever public display. Despite the airline taking delivery of five models from Airbus, according to, not one has flown a paying passenger.If Etihad CEO Tony Douglas keeps his promise to retire the airline's A380s, the A350-1000 will become the second-largest aircraft in the Etihad fleet behind the Boeing 777-300ER. That is, until the Boeing 777X joins the fleet and makes the Airbus A350-1000 the third-largest plane in the fleet. 8. Leonardo shows off the civilian version of a popular military aircraft A Leonardo AW609 aircraft. Pier Marco Tacca/Getty The Leonardo AW609 is one of the most unique aircraft coming to the Dubai Airshow as it's one that can take off and fly like a plane or helicopter. Vertical takeoff and land aircraft are a special type of aircraft merging the best of fixed-wing aircraft with the flexibility a helicopter offers.The US Air Force is also bringing its Bell Boeing MV-22B Osprey, one of the aircraft that protects the US president, to the Dubai Airshow.Are you at the Dubai Airshow and want to get in touch with Insider? Email this reporter at the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 14th, 2021

CVG Reports Third Quarter 2021 Results

Quarterly Sales of $239.6 million, EPS $0.23, Adjusted EPS $0.25 Estimated $168 million of Net New Annualized Business Secured Year to Date NEW ALBANY, Ohio, Nov. 02, 2021 (GLOBE NEWSWIRE) -- CVG (NASDAQ:CVGI), a diversified industrial products and services company, today announced financial results for its third quarter ended September 30, 2021. Third Quarter 2021 Highlights (Compared with prior-year period, where comparisons are noted) Revenue of $239.6 million, up 27.7%. The increase year over year is primarily driven by new business wins in Warehouse Automation and material cost pass through. Operating Income of $11.4 million, up $2.5 million or 28.1% primarily due to higher sales volume in Q3 2021. Adjusted operating income of $12.2 million was in-line with prior year even with profit compression from cost inflation and increased expenses relating to new business wins. Net income was $7.5 million, or $0.23 per diluted share. Excluding certain special costs, adjusted net income was $8.1 million, or $0.25 per diluted share, an increase of $0.04 per share. Adjusted EBITDA of $16.9 million, up $0.5 million primarily due to higher sales volumes. Estimated $168.0 million of net new annualized business secured year to date with multi-year platform value expectations. The Company's organic growth program to improve its customer roster, its profitability rates and lessen its cyclicality is delivering results. Harold Bevis, President and Chief Executive Officer of CVG, said, "CVG continues to have record level revenues even in a modest truck build year. We believe this is a good reflection of the successes we are having in our global organic sales growth process. We continue to lessen our dependence on legacy customers and older vehicle platforms. Some of our achievements in the last 21 months include landing 236 new business wins with 33 new customers in the US, Mexico, Canada, UK, Germany, India, China and Japan. Most of this business is in design, development, trial and/or initial production phase. Our momentum continues to grow and it gives us increased confidence in our ability to diversify our customer and revenue portfolio. The types of new business we are winning includes components, sub-assemblies and systems for: electric delivery vans, electric and fuel cell trucks, electric buses, electric battery systems, ATV's, side-by-side power sports equipment, farm equipment, and automated material handling systems." Mr. Bevis continued, "Our legacy class 8 truck business has been negatively impacted by the global supply chain disruptions resulting in extended China supply chains, port backups, chip shortages, labor inflation, and steel and other raw material inflation. We are watching this carefully and passing along these costs to the extent possible. There is a lag to this dynamic which is resulting in increased cost/price compression in the third quarter relative to the second and first quarters." Mr. Bevis concluded, "Our operations are evolving with our business mix and we are optimizing our footprint to deliver cost effective solutions to our customers. We are currently consolidating several older locations and opening a new plant in Mexico. We also launched our European warehouse automation business in the third quarter from a new location in the Czech Republic. The end customer is a well known global e-Commerce powerhouse. Additionally, we ordered two state of the art large tonnage injection molding machines during the quarter to stay in front of the excellent growth we are achieving in the power sports market. Overall, under the circumstances, we are pleased with our third quarter performance as well as our strategic advancements in the quarter." Chris Bohnert, Chief Financial Officer, commented, "As we have discussed throughout the year, a central focus of our collective efforts is to grow and improve our profit rates through higher value business mix and cost optimization. Our results continue to benefit from the cost focus and business win results from 2020 as well as our improved capital structure which resulted in a dramatic reduction in our interest expense in 2021. We are prudently managing our operations with the view that opportunities remain to optimize our cost structure and improve our customer service. As a result, we are implementing a restructuring program to align our cost structure to support our margin expansion and enable continued business growth. The program includes workforce reductions and footprint optimization across segments. We expect these activities to occur over the next several quarters with restructuring cost of $4.0 million to $6.0 million and are targeting equivalent savings to be realized on an annual basis. Lastly, just after the quarter ended, we completed an amendment to our credit agreement allowing us to invest in additional capex investment if needed, to support our business mix transformation." Third Quarter Financial Results(amounts in millions except per share data and percentages)   Third Quarter           2021   2020   $ Change   % Change Revenues $ 239.6     $ 187.7     $ 51.9     27.7 % Gross profit $ 30.1     $ 24.2     $ 5.9     24.4 % Gross margin 12.6 %   12.9 %         Adjusted gross profit 1 $ 30.1     $ 25.2     $ 4.9     19.4 % Adjusted gross margin 1 12.6 %   13.4 %         Operating income $ 11.4     $ 8.9     $ 2.5     28.1 % Operating margin 4.8 %   4.7 %         Adjusted operating income 1 $ 12.2     $ 12.0     $ 0.2     1.7 % Adjusted operating margin 1 5.1 %   6.4 %         Net income $ 7.5     $ 4.2     $ 3.3     78.6 % Adjusted net income 1 $ 8.1     $ 6.5     $ 1.6     24.6 % Earnings per share, diluted $ 0.23     $ 0.13     $ 0.10     76.9 % Adjusted earnings per share, diluted 1 $ 0.25     $ 0.21     $ 0.04     19.0 % Adjusted EBITDA 1 $ 16.9     $ 16.4     $ 0.5     3.0 % Adjusted EBITDA margin 1 7.1 %   8.8 %         1 See Appendix A for GAAP to Non-GAAP reconciliation         Consolidated Results of OperationsThird Quarter 2021 Results Third quarter 2021 revenues were $239.6 million compared to $187.7 million in the prior year period, an increase of 27.7%. The increase in revenues is primarily driven by new business wins in Warehouse Automation, an increased truck build rate in North America, and increased pricing to offset material cost increases. Foreign currency translation also favorably impacted third quarter of 2021 revenues by $2.4 million, or by 1.3%. Operating income for the third quarter of 2021 was $11.4 million compared to $8.9 million in the prior year period. The increase in operating income is primarily attributable to prior year restructuring charges that did not recur. The third quarter of 2021 adjusted operating income was $12.2 million, excluding special charges. The third quarter included $1.3 million of new business startup expenses. The Company's new business win rate continues to exceed expectations and is driving higher than expected startup expenses. The Company believes incurring these expenses is beneficial to the Company's long term growth plans. Interest associated with debt and other expenses was $1.6 million and $5.5 million for the third quarter ended September 30, 2021 and 2020, respectively. The decrease in interest was due to the refinancing of the company's debt on April 30, 2021. Net income was $7.5 million, or $0.23 per diluted share, for the third quarter of 2021 compared to $4.2 million, or $0.13 per diluted share, in the prior year period. At September 30, 2021, the Company had $31.3 million of outstanding borrowings on its revolving credit facility, $33.6 million of cash and $92.3 million of availability from the revolving credit facility, resulting in total liquidity of $125.9 million. Segment Results Electrical Systems Segment Third Quarter 2021 Results Revenues for the Electrical Systems segment in the third quarter 2021 were $164.1 million compared to $121.1 million in the prior year period, an increase of 35.6% primarily as a result of business growth in warehouse automation with revenues of $37.1 million as compared to $11.7 million in the prior year and an increased truck build rate in North America. Foreign currency translation favorably impacted third quarter 2021 revenues by $0.7 million, or by 0.6%. Operating income for the third quarter of 2021 was $17.8 million compared to $12.2 million in the prior year period. The increase in operating income was primarily attributable to increased sales. Global Seating Segment Third Quarter 2021 Results Revenues for the Global Seating segment in the third quarter of 2021 were $76.5 million compared to $68.9 million in the prior year period, an increase of 11.0% primarily due to increased pricing to mitigate material inflation and strong demand in the European construction market. Foreign currency translation favorably impacted third quarter 2021 revenues by $1.7 million, or by 2.4%. Operating income for the third quarter of 2021 was $0.4 million compared to $4.8 million in the prior year period. The decrease in operating income was primarily attributable to the challenges in passing along material and freight cost increases to our customers. Additionally, volatile customer schedules, supply chain constraints and freight cost inflation have caused inefficiencies in our operations. 2021 Demand Outlook The demand outlook for the Company's key markets are favorable; however production capacity is limited in a number of our end markets due to continued pandemic-driven supply-chain constraints. According to a August 2021 report by ACT Research, a publisher of industry market research, 2020 North American Class 8 truck build production was 214,250 units and Class 5-7 production was 223,721 units. 2021 North American Class 8 truck production levels are expected to be at 263,000 units and Class 5-7 production are expected to be at 232,000 units. This outlook supports demand for the Company's vehicle products. We believe the demand outlook for the Company's entrance into the electric and fuel cell vehicle market to be favorable. Many global electric and fuel cell vehicle platforms are underway across the spectrum of vehicle types. Adoption rates are forecast to increase per the Bloomberg NEF Electric Vehicle Outlook and supports continuance of the Company's efforts aimed at partnering with electric vehicle and fuel cell makers to help them develop and produce these vehicles and make use of the Company's full product basket of offerings such as: entire electrical systems for the chassis and powertrain, seating solutions, headliners, interior trim, mirrors, wipers, floor mats, and road sensors. The demand outlook for the Company's warehouse automation products is favorable. According to LogisticsIQ, demand for warehouse automation products is expected to grow approximately 14% annually through 2026. GAAP to Non-GAAP Reconciliation A reconciliation of GAAP to non-GAAP financial measures referenced in this release is included as Appendix A & B to this release. Conference Call A conference call to discuss this press release is scheduled for Wednesday, November 3, 2021, at 10:00 a.m. ET. Management intends to reference the Q3 2021 Earnings Call Presentation during the conference call. To participate, dial (833) 235-5650 using conference code 7554569. International participants dial (647) 689-4139 using conference code 7554569. This call is being webcast and can be accessed through the "Investors" section of CVG's website at, where it will be archived for one year. A telephonic replay of the conference call will be available for a period of two weeks following the call. To access the replay, dial (800) 585-8367 using access code 7554569 and international callers can dial (416) 621-4642 using access code 7554569.   Company Contact Christopher H. BohnertChief Financial About CVG CVG is a global provider of components, assemblies and systems to the traditional commercial vehicle market, the electric vehicle market, and the warehouse automation market. Information about the Company and its products is available on the internet at Forward-Looking Statements This press release contains forward-looking statements that are subject to risks and uncertainties. These statements often include words such as "believe", "anticipate", "plan", "expect", "intend", "will", "should", "could", "would", "project", "continue", "likely", and similar expressions. In particular, this press release may contain forward-looking statements about the Company's expectations for future periods with respect to its plans to improve financial results, the future of the Company's end markets, including the short-term and long-term impact of the COVID-19 pandemic on our business, changes in the Class 8 and Class 5-7 North America truck build rates, performance of the global construction equipment business, the Company's prospects in the wire harness, warehouse automation and electric vehicle markets, the Company's initiatives to address customer needs, organic growth, the Company's strategic plans and plans to focus on certain segments, competition faced by the Company, volatility in and disruption to the global economic environment (including inflationary pressures and continued supply chain disruptions) and the Company's financial position or other financial information. These statements are based on certain assumptions that the Company has made in light of its experience as well as its perspective on historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including those included in the Company's filings with the SEC. There can be no assurance that statements made in this press release relating to future events will be achieved. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on behalf of the Company are expressly qualified in their entirety by such cautionary statements. COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months and Nine Months Ended September 30, 2021 and 2020 (Unaudited) (Amounts in thousands, except per share amounts)   Three Months Ended   Nine Months Ended   September 30, 2021   September 30, 2020   September 30, 2021   September 30, 2020 Revenues $ 239,610     $ 187,697     $ 742,673     $ 501,698   Cost of revenues 209,466     163,538     647,040     450,761   Gross profit 30,144     24,159     95,633     50,937   Selling, general and administrative expenses 18,772     15,266     52,529     50,066   Goodwill and other impairment —     —     —     29,017   Operating income (loss) 11,372     8,893     43,104     (28,146 ) Other (income) expense (186 )   213     (1,127 )   749   Interest expense 1,630     5,461     9,489     15,393   Loss on extinguishment of debt —     —     7,155     —   Income (loss) before provision for income taxes 9,928     3,219     27,587     (44,288 ) Provision (benefit) for income taxes 2,417     (959 )   6,491     (11,375 ) Net income (loss) $ 7,511     $ 4,178     $ 21,096     $ (32,913 ) Earnings (loss) per Common Share:               Basic $ 0.24     $ 0.13     $ 0.67     $ (1.07 ) Diluted $ 0.23     $ 0.13     $ 0.64     $ (1.07 ) Weighted average shares outstanding:               Basic 31,570     30,986     31,432     30,894   Diluted 32,706     31,617     32,738     30,894   COMMERCIAL VEHICLE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Amounts in thousands, except per share amounts) ASSETS September 30, 2021   December 31, 2020 Current assets:       Cash $ 33,603     $ 50,503   Accounts receivable, net of allowances of $301 and $644, respectively 192,111     151,101   Inventories 146,469     91,247   Other current assets 19,918     17,686   Total current assets 392,101     310,537   Property, plant and equipment, net 62,142     62,776   Intangible assets, net 19,142     21,804   Deferred income taxes 24,018    .....»»

Category: earningsSource: benzingaNov 2nd, 2021