By Paul Page
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The biggest provider in Amazon.com Inc.'s dedicated air cargo network is expanding its reach into the airline industry. Air Transport Services Group Inc. bought Pemco World Air Services Inc., the WSJ's Doug Cameron reports, taking in a major provider in the world of aircraft maintenance andpassenger-to-freighter jet conversions. The acquisition brings the cargo airline a company that is in the business of turning into freighters the sort of Boeing Co. 737 aircraft that experts expect to figure prominently in new China domestic cargo services. Pemco also specializes in maintenance for Boeing 767 jets, the centerpiece of Amazon's outsourced Prime Air cargo airline, allowing ATSG and Amazon to keep more of that operation within a closed system. Pemco doesn't perform cargo conversions for 767s, but some financial support could change that and bring even more airline business under Amazon's expanding transportation umbrella.
President-elect Donald Trump's pick as the nation's chief trade negotiator is a veteran trade lawyer with a background well-suited for an administration intent on curbing imports. The WSJ's William Mauldin writes the choice Robert Lighthizer as U.S. trade representative signals a sharp shift in trade strategythat will include a move away from multilateral deals, a tougher approach to China and Mexico and the threat of duties to impose higher costs on imports. That focus on imports has raised concerns in a retail world that depends on products made overseas, and Mr. Lighthizer's appointment suggests that trade flows are in for a big change. A former deputy USTR during the Reagan administration, he's spent three decades as a trade lawyer fighting for punitive tariffs on U.S. companies' overseas rivals and backed tariffs to defend the U.S. steel industry against overseas competitors.
The future of North America's automotive supply chain appears to be running through President-elect Donald Trump's transition operation. Ford Motor Co. is scrapping plans for a new, $1.6 billion small-car assembly plant in Mexico even as General Motors Co. takes barbs from Mr. Trump over cars it imports from Mexico to U.S. dealers, the WSJ's John D. Stoll and Mike Colias report. The surprise turnaround from Ford upends the car maker's longstanding strategy and will trigger a broad rewrite of parts distribution plans set to serve the factory. Ford instead will make small cars in an existing Mexican factory and invest $700 million in a Michigan facility that will build electric vehicles. GM hasn't taken any formal response to the barb Mr. Trump threw its way over Twitter, but the new controversy may complicate the auto maker's attempt to reset its manufacturing by scaling back production of smaller cars as U.S. buyers turn toward SUVs and trucks.
ECONOMY & TRADE
The rising value of the dollar that's drawing cheers on Wall Street may spell trade trouble in other countries. The soaring U.S. currency is sending a cloud over emerging markets, the WSJ's Ira Iosebashvili writes, where the dollar's sustained strength could undercut prices for oil and other dollar-denominated commodities. That would particularly pressure developing economies that export raw materials that are highly sensitive to currency changes. Emerging-market companies and governments that have borrowed heavily in the U.S. currency will also find their debt more difficult to service. The dollar is starting 2017 strong, reached its highest point since June 2002. The rise is already having an impact in China, the WSJ's Linling Wei reports, as the large pile of foreign debt owed by Chinese companies add urgency to Beijing's efforts to keep the yuan from falling too steeply. The tighter control on capital outflows is aimed at maintaining China's economic equilibrium but it will also keep trade on an even keep even if the dollar keeps bulking up.
IN OTHER NEWS
A key measure of U.S. factory activity jumped in December to its strongest pace in two years, with figures for new orders, prices and production all soaring. (WSJ)
Tesla Motors Inc.'s fourth-quarter sales rose 27%, but the company fell short of its goal of delivering at least 80,000 vehicles in 2016. (WSJ)
Intel Corp. is seeking regulatory approval to take a stake in a digital mapping service jointly owned by Germany's big three car makers. (WSJ)
The Obama administration is finalizing a study that could lead to restrictions on Chinese investment in the U.S. semiconductor sector. (WSJ)
Brazil's imports plunged 20% last year as the country posted its biggest trade surplus ever. (WSJ)
Korea Line Corp.'s board voted against having the bulk carrier take over Hanjin Shipping Co.'s trans-Pacific container service. (American Shipper)
China launched freight rail service between the eastern Zhejiang province and London, extending its "Belt and Road" trade initiative. (Bloomberg)
South Korea's Hyundai Merchant Marine struck an alliance with two short-haul container shipping lines for intra-Asia service. (Nikkei Asian Review)
Logistics software provider Descartes Systems Group Inc. acquired trade data provider Datamyne for $52.7 million. (DC Velocity)
Developers are planning a warehouse as large as 1.3 million square feet in the increasingly tight distribution market outside Chicago. (Crain's)
The addition of new passenger planes to meet strong air travel demand in Asia is dragging down air freight rates. (Journal of Commerce)
Bombardier Inc. delivered its first CRJ200 regional jet freighter converted from passenger configuration to Gulf & Caribbean Cargo. (Air Cargo News)
DP World took a controlling stake in the South Korean Port of Busan's biggest container terminal. (Maritime Executive)
The U.S. Agency for International Development halted funding for a Ukraine customs reform project, saying anti-bribe efforts at Black Sea ports have stalled. (Reuters)
Paul Page is deputy editor of WSJ Logistics Report. Follow him at @PaulPage, and follow the entire WSJ Logistics Report team: @brianjbaskin, @jensmithWSJ and @EEPhillips_WSJ and follow the WSJ Logistics Report on Twitter at @WSJLogistics.
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(END) Dow Jones Newswires
January 04, 2017 06:57 ET (11:57 GMT)
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