1) The Colt Manufacturing Company is ending 175 years as an American gunmaker with the purchase by the Czech firearms company CZG. Colt, a financially troubled company, that with its new Czech owner, is now expected to generate $500 million in revenue. Colt was an early innovator of interchangeable parts on the assembly line, and helped to define the growth of precision manufacturing. In addition to guns, Colt made gauges, sewing machines, printing presses and other products. The manufacture became the first school of applied mechanics in the United States, and was a fountainhead of mass production. But Colt filed for bankruptcy protection in June 2015, despite the booming sales in small arms. Like so many other manufactures, Colt was plagued by the high cost of capitalization and low return on investment that is systemic to all types of manufacturing. CZG acquires significant production capacity in the United States and Canada and substantially expand its global customer base.
2) American steelmakers’ reluctance to resume full production after pandemic shutdowns are threatening to undercut President Biden’s push to reshoring domestic industries. Producers shut furnaces down in response to falling demand from the coronavirus and now are operating well below pre-pandemic levels, even as recovering economies and tight supplies drive prices higher. The benchmark price for American steel is at an all-time high. Companies have kept blast furnaces idled on expectations that prices are likely to recede at some point, which would squeeze margins and potentially force expensive shutdowns again at those furnaces. But customers in industries from automobiles to appliances to machinery say they can’t get enough metal. This undermines the idea of supporting U.S. manufacturing. American plants are running at about 75% of their maximum potential, well down from the peak of 83% in 2019.
3) President Biden has ambitious plans when it comes to addressing climate change, by eliminating net carbon emissions from the energy sector by 2035, and the entire U.S. economy by 2050. Such a big shift away from the burning of oil, gas and coal will put many Americans out of work. Biden claims the net effect of switching from fossil fuels to clean energy in the coming years will result in more jobs, not fewer. In his first few weeks in office, Biden has taken a number of actions on climate change such as rejoining the Paris climate agreement and directing agencies to procure zero-emission vehicles, while pausing on existing leases for fossil fuel development on public lands. The Trump administration had promised to bring back jobs in areas reliant on fossil, but jobs still declined.
4) Stock market closings for – 12 FEB 21:
Dow 31,458.40 up by 27.70
Nasdaq 14,095.47 up by 69.70
S&P 500 3,934.83 up by 18.45
10 Year Yield: up at 1.20%
Oil: up at $59.73