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Shifting Factory Gears; Delivery Goes Electric; Leaning on Inventories
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Peloton in May said its inventory of unsold equipment had swelled to $1.4 billion, up from $19 million two years earlier. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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Peloton Interactive is shifting its manufacturing strategy into reverse. The exercise-equipment specialist will outsource all manufacturing of its stationary bikes and treadmills, the WSJ’s Sharon Terlep reports, in the latest sign of upheaval in supply-chain strategies during the pandemic. Peloton had been one of the big winners early in the Covid-19 pandemic as locked-down populations turned to in-home exercise equipment and the company rushed to build manufacturing capacity to meet the demand. Consumer behavior has pivoted sharply this year and now money-losing Peloton will tap Taiwan’s Rexon Industrial as the primary maker of hardware for its product lines. Peloton’s lesson in
agility has been expensive. The company invested millions to build production capacity, believing that pandemic-driven demand for its products would remain elevated and that it could avoid ocean-shipping bottlenecks by operating U.S. sites. The shipping logjams have receded and demand for Peloton’s bikes has retreated even faster.
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Canoo and Walmart are finalizing the design of the electric delivery van. PHOTO: CANOO
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The charging stations for electric delivery vans are going to get more crowded pretty soon. Walmart is buying 4,500 electric delivery vehicles from Arkansas-based startup Canoo, the WSJ’s Will Feuer reports, stepping up competition in the burgeoning market for plug-in vans for last-mile delivery. Walmart will use what Canoo calls its Lifestyle Delivery Vehicle to bolster its e-commerce delivery service for both groceries and general merchandise. The initial order is just a first step, and Walmart has options to buy up to 10,000 of the vans. That puts Canoo in the mix with a growing field of electric-van makers looking to take a share of the market as delivery companies try to cut emissions and
fuel use in last-mile business. Carriers have ordered electric cargo vans from startups including Rivian Automotive and Arrival as well as traditional manufacturers General Motors, Stellantis and Daimler.
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Electric-vehicle startup Rivian Automotive plans to realign its business by cutting costs, halting hiring of non-factory workers and making other reductions. (WSJ)
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Consumer behavior usually drives inventory decisions, but in the automotive industry these days tight inventories are changing how Americans buy cars. Supply-chain issues that have left dealer lots all but empty along with the accelerating shift toward electric vehicles have accelerated changes in the longstanding retail purchasing process. In a WSJ Video report, a visit to a car dealer shows how consumers and sellers are adapting and that some changes might be here to stay. Nationally, there were 1.1 million new vehicles available at the end of May, less than a third of the pre-pandemic level.
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$117.5 Billion
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Projected global sales of semiconductor manufacturing equipment by original equipment manufacturers in 2022, up 14.7% from last year’s record level, according to trade group Semi.
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