While there’s always something exciting going on in the industrial, engineering and auto industries, we’ve picked out a few of the more interesting stories to come out recently, including what Boeing plans to do to save the 747. Further, we will touch on the latest in manufacturing and the auto industry.
Saving the 747
With sales of Boeing’s iconic 747 plane declining significantly in recent years, the aviation giant has decided to rent out the enormous plane to cargo carriers in countries like Russia and Azerbaijan. With the air-cargo market poised to recover, the strategy may pay off. Boeing also recently landed an important 747 order from United Parcel Service that could mean a strong future for the big airplane: Hauling oversize cargo as demand dies out for cumbersome four-engine passenger planes.
It will be risky for Boeing to buy and lease on a large scale. If carriers default or don’t renew leases, it would be Boeing Capital’s duty to set up other customers, a difficult task in this specialized niche. If the plane encounters a greater-than-expected drop in value, Boeing’s earnings or cash flow might be adversely affected.
Industry Is Booming
As jobless rates continue to fall nationwide, a tight labor market and ongoing skills shortages present challenges to manufacturers. But it’s hard to complain about a booming market. Recent pressure to buy and hire American will only serve to increase domestic demand. National gas consumption is on the rise and pipeline and other energy infrastructure projects are on the increase. Energy, construction, and trades are hot markets in the coming months.
Improved consumer confidence continues to strengthen the auto industry. General Motors, Ford and Honda posted record sales in 2016 and total annual sales are expected to top 20 million by 2018. The biggest question is what automotive products will consumers be purchasing? The market for small SUVs and crossover vehicles has been nearly unlimited in recent years, but if gasoline prices spike, those buyers may consider hybrid vehicles instead. Increased automation mean fewer employees are required for peak productivity, but it does require that those hired be technologically adept.
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