346 (5 December 2018)

Welcome to week 346! The articles below caught my attention this week.  What areintended to be relatively objective “briefs” are preceded by dashes (——–),whereas additional material or relatively subjective comments are precededby asterisks (********).  Article titles preceded by [SR] require a subscription. 

(28 November 2018):The Plug-In Hybrid Car Hits Its Stride, Just in Time to DieBloomberg.com

——–“It’s becoming increasingly clear that plug-in hybrid vehicles, those green chimeras that have long promised to carry creaky, old car companies into an energy-efficient future, will never grow past their current position as an automatic also-ran.  The battery-electric car now appears poised to turn these hybrids into a historical blip.”  Gil Tal, director of the Plug-in Hybrid and Electric Vehicle Research Center at UC, Davis, notes: “A full electric is a much more elegant solution . . . It’s very simply to build and very low maintenance.”  In his opinion, plug-in hybrids “are just the training wheels” in preparing the auto industry for electric cars.  In relation to U.S. sales, “fully electric vehicles have surged ahead of plug-in hybrids, outpacing them by almost three-to-one in the third quarter” of 2018.  “In the coming months, purely-battery powered machines will overtake hybrids that don’t plug in at all, a category that includes a wide range of vehicles such as the Prius.”

********The article concludes, “The death of the hybrid, while seemingly inevitable, may be long and slow.”  Gil Tal believes that they will likely have a role until 2040.  “But the problem will always be [that] it’s a more expensive solution, having two drivetrains.”

********As mentioned in the article, one of the plug-in hybrid vehicles that is “dying off” is the Chevrolet Volt.  Its elimination from GM’s car portfolio is connected to Amy Goldstein’s article “When GM closes a plant, workers lose their jobs.  But the city loses its spirit.The New York Times.  Goldstein’s article draws upon her award-winning book Janesville: An American Story, which reports at length on the consequences of the closing of a long-existing General Motors plant in Janesville, Wisconsin.  Goldstein is a sure guide as to what is likely to happen to 14,000 GM employees and to the communities in which they live as GM as the company seeks to get “in front” of a potential economic downturn “while the company is strong and while the economy is strong.”  Much work has been done regarding the anticipated change in economic activity resulting from expansionary events, such as the siting of a new business facility in a region, but there has generally been little attention given to the anticipated changed in economic activity resulting from contractionary events, such as the closing of a major production facility.  This is regrettable—the GM closings seem like a great opportunity to redress this imbalance.

********Another aspect of the rise of the electric car is the rise of the markets that are resources used in producing electric cars, which might be called derived demand markets.  Lithium is one of those products, it being used to manufacture batteries for electric cars.  Bolivia, as it turns out, is “sitting on the second-largest amount” of lithium in the world.  Read about the challenges facing Bolivia’s attempts to develop its resources in  “Bolivia’s Almost Impossible Lithium DreamBloomberg.com.

(28 November 2018):The Annals of FlannelThe New York Times

********Bayard Winthrop, the CEO of the clothing brand American Giant, set out three years ago to produce a flannel shirt produced entirely in the United States.  This turned out to be much more challenging than expected.  When he explored the possibility with others, he continually heard that U.S. flannel is gone.  And it was, until his dogged determination brought it back.  It’s a story worth reading.  The flannel shirt I am wearing was made in China.  I intend to purchase an American Giant flannel shirt—it will be pricey—once they become available.

(29 November 2018):Sign Here to Lose Everything: Part 3Bloomberg.com

********This article, “Rubber-Stamp Justice,” is the third of four articles on the cash-advance business that preys on small businesses nationwide but processes the bulk of its cases in the state of New York.  It points to some of the factors that lead some New York counties, like Erie, Ontario, and Orange, to process more judgments of confession that enable the pillaging of the financial resources of small businesses receiving cash advances.  Of primary concern is their use for that purpose is rapid turnaround, in many cases one day. 

(2 December 2018):Betting on a new way to make concrete that doesn’t polluteThe New York Times

——–Solidia Technologies, based in Piscataway, New Jersey, is working to “dramatically reshape the manufacturing of concrete.”  It says that “it can make the ubiquitous building material cheaper and at the same time reduce carbon dioxide emissions by essentially turning them into stone.”  By “tweaking the chemistry of cement . . . it can profit from helping to clean up an industry that is not only one of the largest on the planet but also one of the dirtiest.  Cement plants are major league emitters of carbon dioxide, which is blamed for climate change.”  It is estimated that “making conventional or Portland cement . . . produces as much as 7 percent of total global CO2 emissions.”  According to the International Energy Agency, on a ton for ton basis, “cement plants spew more carbon dioxide than any other manufacturing process.”

********Traditional cement has a long history as a building material, so cement producers are hesitant to try new production methods due to the perceived risks in using them.  A story about cement naturally leads to consideration of concrete, which are different, but related, things; cement is an ingredient of concrete.  As such, there is some interest in the larger entity (concrete).  A well-regarded book on the subject is Concrete Planet: The Strange and Fascinating Story of the World’s Most Common Man-Made Material

(3 December 2018): [SR]The Trouble With Tuna: ‘A Lot of Millennials Don’t Even Own Can Openers’The Wall Street Journal

——–”Canned tuna, a lunchbox staple from the 20th century, is fighting to keep its spot in American cupboards.  Century-old tuna companies like StarKist Co, bumble Bee Foods LLC and chicken of the Sea International are trying to reboot demand for tuna fish—selling it in cans, pouches and kits with trendy flavors or as a healthy snack—as they seek to hold on to their dominance in a shrinking market. . . . Canned tuna is struggling to connect with younger generations who favor fresher, less-processed options.  It is also dealing with competition from newer and fancier brands, which see an opportunity to innovate in a category they think big brands have let slide.”  Although the “big three” tuna companies have 80% of sales in the tun a market, the industry has “shrunk significantly.  Per capita consumption of canned tuna has dropped 42% in the three decades through 2016.”  Simply put, “In a country focused on convenience, canned tuna isn’t cutting it with consumers.  Many can’t be bothered to open and drain the cans, or fetch utensils and dishes to eat the tuna.”

********The article does point to the role of the invisible handshake—social and historical forces that affect human behavior—on the demand side of the tuna market.

May you have a good week!


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