Today's Top Supply Chain and Logistics News From WSJ
By Paul Page
Sign up: With one click, get this newsletter delivered to your inbox.
Celadon Group Inc.'s turnaround plan is hitting new hurdles. The troubled trucking business says it is facing a Securities and Exchange Commission investigation, the WSJ's Cara Lombardo reports, even as it takes on $22.6 million in new debt and tries to pare down to its core truckload operations. There are no details on the securities probe but it follows long-running problems in Celadon's truck leasing business and an ambitious expansion plan that spread the company too thin. Celadon sold its flatbed operation last month and also shed its Quality Companies leasing unit. New Chief Executive Paul Svindland, a turnaround specialist brought in to rebuild the business, says Celadon is showing important improvements in the foundation trucking operation, where it's helped by strong demand and pricing across the U.S. shipping market. But the securities investigation, along with several shareholder lawsuits, will put more pressure on Celadon during what looks like a critical period for its survival.
Autonomous transportation technology is making inroads in some of the world's biggest industrial operations. Mining giant Rio Tinto PLC says it just completed a a pilot run spanning nearly 62 miles with trains operated from hundreds of miles away, the WSJ's Robb M. Stewart writes, suggesting miners and their providers have solved problems that have dogged driverless-equipment plans. Driverless mining vehicles promise greater efficiency for an industry that continues to target costs: Rio Tinto uses some 200 locomotives to haul ore from 16 mines to four ports, and it hopes trains with its AutoHaul technology eventually will run continuously without shift changes. But testing of trains and driverless trucks has been plagued by problems such as software glitches. Rio Tinto's success this week highlights the near-term potential of autonomous transportation technology in "closed-loop" systems where vehicles won't have to move in bigger and more unpredictable transport networks.
Tesla Inc.'s supply chain for the new Model 3 sedan is charging up very slowly. The Silicon Valley electric-car maker built just 260 of its new automobile in the third quarter, the WSJ's Tim Higgins reports, with "production bottlenecks" undercutting Tesla's plans to move 1,500 Model 3s to the market. That's a blow to a business that hopes to use the car priced well below its luxury autos to transform itself into a more mainstream player around the world. Investors have applauded the vision, driving up Tesla's share price, but the company has had trouble getting its production to match its ambitions. Tesla said in a statement, "there are no fundamental issues with the Model 3 production or supply chain." But the trail-blazing company is seeing competition with bigger production capabilities come up from the rear. Tesla could lose consumers' attention if it can't fix its manufacturing bottlenecks before manufacturers with broader supply chains rev up those operations.
SUPPLY CHAIN STRATEGIES
Detroit's largest auto makers are putting their weight more heavily behind the push to electric vehicles. General Motors Co. is ramping up aggressive plans that will include two more electric vehicles in the U.S. over the next 18 month while Ford Motor Co. is putting together a team to explore partnerships with suppliers and other companies. Along with new mandates from China to boost electric-car production there, the moves suggest a bigger and more global supply chain for electric vehicles is starting to form, the WSJ's Mike Colias writes, as traditional car companies respond to tougher emissions regulations that go after internal combustion engines powered with fossil fuels. GM and Ford are investing billions of dollars in electric vehicles despite challenges turning a profit. That's because of tepid consumer demand and high technology costs. GM is forecasting a long transition period, but the costs are likely to decline as research advances and cheaper prices at dealerships may accelerate the push toward production.
IN OTHER NEWS