WSJ : Electric Vehicles Are the U.S. Auto Industry’s Future—If Dealers Can Figur

Electric Vehicles Are the U.S. Auto Industry’s Future—If Dealers Can Figure Out How to Sell Them
Car dealers say they are struggling to square the industry’s enthusiasm with shoppers’ reality

Car dealer Brad Sowers is spending money to prepare for the coming wave of new electric models from General Motors Co. He is installing charging stations, upgrading service bays and retraining staff at his St. Louis-area dealership to handle the technology-packed vehicles.

But when he considers how many plug-in Chevy Bolts he sold last year—nine, out of the nearly 4,000 Chevrolets sold at his Missouri dealerships—it gives him pause.

“The consumer in the middle of America just isn’t there yet,” when it comes to switching to electric vehicles, he said, citing the long distances many of his customers drive daily and a lack of charging infrastructure outside major cities.


As auto executives and investors buzz about the coming age of the electric car, many dealers say they are struggling to square that enthusiasm with the reality today on new-car sales lots, where last year battery-powered vehicles made up fewer than 2% of U.S. auto sales.

Most consumers who come to showrooms aren’t shopping for electric cars, and with gasoline prices relatively low, even hybrid models can be a tough sell, dealers and industry analysts say.

Auto makers are moving aggressively to expand their electric-vehicle offerings with dozens of new models set to arrive in coming years. Some like GM are setting firm targets for when they plan to phase out gas-powered cars entirely.

Many dealers say that puts them in a delicate spot: They are trying to adjust, but unsure whether and how fast customers will actually make the switch. About 180 GM dealers, or roughly 20%, have decided to give up their Cadillac franchises rather than invest in costly upgrades that GM has required to sell electric cars.

A GM spokesman said the company expected some Cadillac dealers to opt out and is pleased that the roughly 700 remaining share its all-electric goals.

Past attempts by car companies to expand electric-car sales have largely flopped, saddling retailers with unsold inventory. Even now, some dealers say they are reluctant to stock electric models en masse.


“The biggest challenge is that dealers have a bit of ‘boy who cried wolf’ syndrome,” said Massachusetts dealer Chris Lemley.

Car companies have promised for years to make electric cars mainstream, but produced only low-volume, niche models, he said. He recalls Ford Motor Co. rolling out an all-electric Focus that sold poorly and stacked up on his lot. It was discontinued in 2018.

“So when we are told, ‘This time, we really mean it,’ it’s easy to be skeptical,” Mr. Lemley added.

Some shoppers also are unsure. Joe Daniel, an energy analyst at the Union of Concerned Scientists, said he was determined to buy an electric car, but eventually abandoned his effort after realizing there weren’t enough public charging stations near his apartment in Washington, D.C. Without a place to plug in, the purchase made little sense, he added.

“For EVs to take off, they need to be as convenient as gas-powered cars—that’s the whole point of this big purchase,” Mr. Daniel said.

To solve problems like this, President Biden has said he wants to spend billions of dollars to upgrade the country’s charging infrastructure as part of a push to incentivize battery-powered cars.

Ford, GM and other major car companies say they are confident in their new electric-vehicle offerings and are training dealers to sell and service them.

Still, some auto retailers say they worry about the long-term implications for their business.


Tesla Inc.’s influence on the electric-car market has created a new standard for car shoppers, offering an online transaction and a simplified lineup with no price negotiation. Other electric-vehicle startups, like Rivian Automotive and Lucid Motors, say they’ll likewise sell directly to consumers and bypass traditional dealerships.

Some car companies are now following their lead, initially stocking dealership lots with few if any electric models and allowing customers to order more directly from the manufacturer.

Volvo Cars CEO Håkan Samuelsson recently said that all future battery-electric vehicles would be sold exclusively online and the price would be set centrally, eliminating the ability to haggle. Dealerships will help deliver vehicles to customers and perform other services, like maintenance, he said.

“The marketplace is moving from the physical dealership to online. That’s what will happen in the next 10 years,” Mr. Samuelsson said.

Howard Drake, a GM dealer in Los Angeles, said he is considering converting two of his showrooms. Rather than separate models by brand, he is considering two stores—one for electrics, the other for gas-powered vehicles.

“These are really different customers,” Mr. Drake said. “A Hummer EV buyer probably doesn’t want to be sitting next to some guy buying a gas-guzzling pickup truck.”

Mr. Sowers said he sees encouraging signs. GM recently dropped the sticker price of the all-electric Bolt and helped boost sales for the model in February. But he said his electric-vehicle inventory will remain light because he is uncertain about longer-term demand.

“It’s still very early days,” Mr. Sowers said.

As soon as dealers figure out how to sell EVs, another business problem awaits in the service bay.

Electric vehicles typically have fewer mechanical parts and don’t require the same type of service that gas engine cars need, such as oil changes. That work right now is a big profit center for dealerships.

“There’s going to be an impact, but it might take three or four years to see the full effect,” Mr. Lemley said. “That’s really my biggest question mark heading into all of this.”

FT : Climate graphic of the week: Iceberg break from Brunt Ice Shelf

Climate graphic of the week: Iceberg break from Brunt Ice Shelf
Glaciologists are monitoring whether the mass is at risk of causing damage as it is carried by the current



Glaciologists have been closely observing the many cracks in the Brunt Ice Shelf for years, but in late 2019 a new rift was spotted.

Satellite imagery showed the crack cutting across the ice shelf towards another large crack, captured by the Copernicus Sentinel-1 mission as it also monitors for changes in ice dynamics, air and ocean temperatures.

Observations showed the region north of the new crack was the most unstable, according to the European Space Agency, and indicated it was moving at a rate of about 5m per day.

The crack was near an area where, Nasa reported, the flow of ice is “impeded by an underwater formation that causes pressure waves, crevasses, and rifts to form at the surface.”

Finally, in late February, the crack widened rapidly before the iceberg finally broke free from the rest of the 150m thick floating ice shelf, the ESA said. The agency was continuing to watch for further significant effects.

“Over the following weeks and months, the iceberg could be entrained in the swift southwesterly flowing coastal current, run aground or cause further damage by bumping into the southern Brunt Ice Shelf,” said Mark Drinkwater, the head of mission science at the ESA. “So we will be carefully monitoring the situation.”

The iceberg was dubbed A-74, based on the Antarctic quadrant in which it was sited. Even at 1270 square km, Nasa said the iceberg was dwarfed by the so-called A-68 which broke from the Larsen C Ice Shelf in 2017 and was five times the size.

The ESA noted the Brunt Shelf break did not pose a threat to the presently unmanned British Antarctic Survey’s Halley VI Research Station, which was repositioned in 2017 to a more secure location after the ice shelf was deemed unsafe.

FT : Pandemic shift to premium brands leaves drinks makers in high spirits

Pandemic shift to premium brands leaves drinks makers in high spirits
Savings on travel and leisure enable housebound consumers to upgrade to high-end bottles

Drinks industry chiefs may be hoping for a new “roaring 20s” when coronavirus restrictions ease, but millions of households have already embarked on an era of upmarket stiff drinks in their living rooms as Covid-19 reshaped global drinking culture.

Global sales of tequila, vodka and liqueurs outperformed the broader alcohol market in 2020 as housebound consumers took to sipping high-end spirits and mixing their own cocktails.

While parts of the population faced acute financial hardship because of coronavirus, wealthier consumers who kept their jobs have been left with extra disposable income as holidays and going out became all but impossible.

That has resulted in “huge trading up” when it comes to alcohol, said Ed Mundy, analyst at Jefferies, as these cash-rich drinkers also took advantage of lower retail prices compared with those for the same drinks served in bars and restaurants.

“If you’re stuck at home and you don’t want to go out to the shops, it’s easier to buy a big bottle of spirits than 24 beers. There’s more cocktail making at home going on . . . people are trading up from brandy to cognac, from cheap drinks to expensive drinks,” said Mr Mundy.

Sales of prestige spirits, which cost more than $100 a bottle, are forecast to grow by more than two-fifths to 2024, about four times faster than standard brands and almost twice the growth of premium bottles, according to drinks analytics group IWSR.


The world’s largest distiller Diageo said its tequila sales shot up 80 per cent last year, driven by the high-end brands Don Julio and Casamigos, which was co-founded by the actor George Clooney. The boom, centred in the US, has followed a resurgence of upmarket “pure agave” tequila as a sipping drink.

“The trend of moving to spirits away from beer and wine has accelerated in the pandemic,” said Ivan Menezes, chief executive of Diageo. The group’s North American chief said late last year that household penetration for spirits had increased in 2020 at three times the rate of beer, and double that of wine.

Pernod Ricard said its whisky brands Jameson and The Glenlivet had shown “solid growth” despite the closure of stores in airports and train stations, which have traditionally been a major sales outlet for spirits.

Globally, overall alcoholic drinks consumption fell just 8 per cent in 2020 by volume from the year before despite many pubs, bars and restaurants being closed, according to IWSR figures. But there were substantial differences between countries.


Shifts in drinking patterns, at first glance, appear similar in the UK and US: sales through the “on-trade”, which includes pubs, bars, restaurants and clubs, dropped by half in 2020 in both countries, while retail sales rose 12 per cent.

Yet overall drinking was far higher in the US last year, since retail sales of drinks to consume at home account for much more of the market. Before Covid-19, a fifth of alcohol sales by volume took place in bars and restaurants in the US, while it was twice the level in the UK, Jefferies said.

In South Africa, where periodic alcohol bans have been imposed, and Turkey, where drinks sales are closely linked to tourism, consumption dropped by about a third. Many countries still turned to a spirit of choice: Brazilians favoured gin, Colombians liqueurs and vodka, said Diageo.

While all drinks makers suffered to some extent from pub closures, brewers were especially hit: the world’s second-largest brewer Heineken announced 8,000 job cuts this year as it struggles to deal with the drop in beer drinking.

In China, where the pandemic originated but where the virus was brought relatively quickly under control, drinking declined by 9 per cent but retail sales of drinks by volume were up 23 per cent, the highest among major markets. Kweichow Moutai, which makes a luxury version of the national white spirit baijiu, reported a 10 per cent sales rise for the year.


For those with a thirst for less fiery drinks — Kweichow Moutai comes in at 35 to 60 per cent alcohol — another trend has taken hold: the cocktail in a can. 

Ready-to-drink cocktails, a broad group that also includes the flavoured alcoholic sparkling water known as hard seltzer, were the only category to record growth last year. Sales increased by more than 40 per cent, a surge that began in the US but is also evident in other markets such as the UK and China.

As vaccinations are rolled out, analysts at Bernstein expect a return to “near normal” in terms of socialising by the middle of 2021. “As the vaccines are rolled out and lockdowns ease, there will be enormous pent-up demand to socialise, glass in hand,” said Trevor Stirling, analyst at Bernstein. 

And entrepreneurs are making a similar bet; in the UK, despite the pain of coronavirus, the Wine & Spirits Trade Association said a record number of new distillers were registered in 2020.

FT : EU and US agree to suspend tariffs in Airbus-Boeing dispute

EU and US agree to suspend tariffs in Airbus-Boeing dispute
Move is first step towards permanent resolution of long-running trade battle

The EU and US have agreed to suspend punitive tariffs related to their longstanding feud over aircraft subsidies, in the first breakthrough in trade relations since President Joe Biden took office. 

The two sides reached a deal after intensive talks, according to people familiar with the discussions, in a sign that the 16-year-old transatlantic trade battle over state aid to Airbus and Boeing could be coming to an end. 

The accord, announced by Ursula von der Leyen, European Commission president, means both sides will suspend tariffs linked to the dispute for four months. The duties have hit products ranging far beyond aircraft, encompassing an eclectic array of goods such as US self-propelled shovel loaders, French wine and even US ornamental fish.

In a statement issued after a call with Biden, von der Leyen said: “President Biden and I agreed to suspend all our tariffs imposed in the context of the Airbus-Boeing disputes, both on aircraft and non-aircraft products, for an initial period of four months.

“We both committed to focus on resolving our aircraft disputes, based on the work of our respective trade representatives,” she said.

The goodwill gesture is intended to prepare the ground for negotiations on a permanent solution to the dispute by setting joint rules on permissible aircraft subsidies.

The US trade representative’s office said a settlement was needed to address challenges posed by new entrants to the aircraft sector from China. Beijing has made it a priority to break the global duopoly that has dominated for decades.

It added that limits on future subsidies and monitoring and enforcement mechanisms would be part of a deal between the EU and US.

A European official said the announcement came “earlier than expected”, given that Biden’s nominated trade representative Katherine Tai has yet to be confirmed. Countering China and setting transatlantic standards for the aircraft industry were keys goal, the official said.

One European diplomat said that four months would be “enough time to focus minds while still being very do-able”.

The deal came a day after the UK and US came to their own arrangement whereby Washington also agreed to suspend punitive tariffs linked to the dispute for four months.

The UK had already unilaterally stopped imposing its own tariffs at the start of this year. EU officials and other trade experts have questioned whether the UK would have had the right to continue to impose them anyway, given its exit from the bloc’s customs union.

Brussels imposed extra tariffs on $4bn of US goods in November, covering a wide range of products including sugarcane molasses, casino tables and fitness machines. 

By then the US had already imposed extra duties on $7.5bn of European exports — the result of Washington’s own World Trade Organization victory against aid to Airbus. 

Brussels sees today’s step as a breakthrough that can pave the way for broader co-operation on trade after the tensions of the Trump era — tensions that at times threatened to boil over into a full-scale trade war.

The US-EU aircraft subsidies dispute is one of the longest-running cases in WTO history. Both sides have been found over the years to have failed to properly implement WTO panel rulings on illegal subsides. 

The battle dates back to 2004, the year after Airbus overtook its US rival in terms of deliveries for the first time. Having earlier brokered an agreement with the EU on state aid in 1992, the US launched a case against subsidies for the European group that dated back to the 1970s. Initially the US claimed that $22bn in illegal funding had been given to Airbus.

The EU followed up a few months later with a challenge of its own, originally claiming $23bn in illegal aid was offered to Boeing.

The two sides have long remained far apart on the terms of any agreement on how to fund new aircraft development. But with both Airbus and Boeing focused on recovering after the coronavirus pandemic and a hiatus in new commercial aircraft development, industry experts said the timing was right.

The deal will come as a relief to aircraft manufacturers and other businesses on both sides of the Atlantic. French wine producers and Italian cheesemakers have been among those in the vanguard of calls for an end to the dispute. The spirits industry has also been among the US sectors strongly urging a solution. 

Airbus welcomed the decision to suspend tariffs. The company said it supports “all necessary actions to create a level-playing field and continues to support a negotiated settlement of this longstanding dispute to avoid lose-lose tariffs”.

Boeing said it hopes the deal would allow for talks to “bring a level playing field to this industry”.

WSJ : Covid-19 Pill Shows Promise in Preliminary Testing

Covid-19 Pill Shows Promise in Preliminary Testing
The antiviral reduced infectious virus in Covid-19 patients in a mid-stage study

An experimental Covid-19 drug that promises to be a kind of Tamiflu for the pandemic had positive results in a preliminary study, one of the drug’s developers said.

The pill, which is being developed by Ridgeback Biotherapeutics LP and Merck MRK 1.33% & Co., significantly reduced infectious virus in subjects in a mid-stage study after five days of treatment, Ridgeback is reporting at a virtual meeting of infectious-disease scientists Saturday.

Further study of the experimental antiviral is under way. If it proves capable of treating people with Covid-19 who show symptoms, the drug would bolster a limited arsenal of treatments and be the first oral antiviral against the disease.

More than a year into the pandemic, doctors and Covid-19 patients have few options. Only one antiviral has been authorized for use: remdesivir from Gilead Sciences Inc. , and it has shown to provide only a modest benefit in hospitalized patients, reducing their stays by several days.

The experimental drug, named molnupiravir, could fill an important role by also helping people who are sick but still at home, serving the same kind of role performed by Tamiflu for the flu, some infectious-disease experts say.

“It’s tantalizing and interesting, but it’s not exactly 100% complete,” said Carl Dieffenbach, director of the Division of AIDS at the National Institute of Allergy and Infectious Diseases, who wasn’t involved in the study. “What we need to confirm is that there’s clinical benefit.”

Drug researchers are making a push to find new Covid-19 drugs to improve upon the performance of the few currently available therapies and fill in gaps in the offerings. They also are looking for therapies that are effective against new coronavirus variants that are spreading rapidly.

“The clear need in this is the development of potent antivirals directly acting on SARS-CoV-2,” Anthony Fauci, director of the NIAID and President Biden’s chief medical adviser said a recent White House briefing, referring to the virus causing the pandemic.

Unlike other drugs targeting the spike protein protruding from the surface of the virus, molnupiravir attacks a portion of the virus that helps it reproduce.

The 182-subject mid-stage, or Phase 2, trial studied the effect of various doses of molnupiravir in people who had developed Covid-19 symptoms within the previous week, tested positive for the disease during the most recent four days and weren’t hospitalized.

Tests didn’t detect infectious virus in any of the study volunteers who took molnupiravir twice a day after five days of treatment, while 24% of subjects who received a placebo did, Ridgeback reported at the virtual Conference on Retroviruses and Opportunistic Infections.

Subjects who took larger doses of the drug also had lower levels of infectious virus than the placebo group after three days.

Ridgeback Biotherapeutics co-founder Wayne Holman said the results indicate the drug prevents the new coronavirus from replicating in the body and offer the first proof that an oral antiviral drug can be effective against the virus.

The findings also suggest, but don’t prove, that the drug can reduce illness, said Dr. Holman, who is also the chief executive of Ridgeback Capital, an investment firm. Ridgeback Biotherapeutics has an approved treatment for Ebola.

Merck said it may have interim results by the end of this month of two late-stage trials exploring whether molnupiravir helps prevent Covid-19 hospitalizations and deaths.

>>> US Close Dow +1.85% S&P +1.95% Nasdaq +1.55% Russell +2.11%

Closing Stock Market Summary

The S&P 500 advanced 2.0% on Friday in a resilient session that featured better-than-expected payrolls growth for February. The benchmark index was down as much as 1.0% intraday as investors sold into early strength, but others stepped in to buy the dip and propel the market to session highs by the close.    

The Nasdaq Composite gained 1.6% after being down 2.6% intraday, the Dow Jones Industrial Average gained 1.9% after being down 0.5% intraday, and the Russell 2000 gained 2.1% after being down 2.9% intraday.

The February employment report showcased nonfarm payrolls increase by 379,000 (Briefing.com consensus 200,000), which the market viewed as a bullish sign for future economic growth, as the labor market recovery appeared to pick up steam ahead of increased reopening/vaccination efforts. The unemployment rate was 6.2% (Briefing.com consensus 6.3%), versus 6.3% in January.

The 10-yr yield briefly matched last week's high of 1.61% following the data, before settling unchanged at 1.55%. Interestingly, the rise in yields didn't deter risk sentiment as every sector in the S&P 500 started the session in positive territory. Instead, the negative price action that followed fueled concerns that the recent correction in the heavily-weighted growth stocks wasn't over. 

Nearly every sector turned negative, with the exceptions being energy (+3.9%) and consumer staples (+2.2%). Shares of Tesla (TSLA 597.95, -23.49, -3.8%) were down more than 13.0% at one point. Selling abated around the close of European markets at 11:30 a.m. ET amid a sense that selling had gotten overdone on a short-term basis. 

Energy stocks built on their outperformance, as oil prices ($66.09, +2.26, +3.5%) rallied above $66 per barrel, and every other sector caught the wave of buying interest. The consumer discretionary sector (+0.7%) was the only sector that increased less than 1.0% due to Tesla's decline.  

Note, while the S&P 500 never went below yesterday's intraday low, the Nasdaq and Russell 2000 did. The S&P 500 managed to close back above its 50-day moving average after closing below it on Thursday.

Shares of Cisco (CSCO 46.25, +1.69, +3.8%) and Oracle (ORCL 69.93, +4.32, +6.6%) outperformed following a pair of analyst upgrades. JP Morgan upgraded CSCO to Overweight from Neutral. Barclays upgraded ORCL to Overweight from Equal Weight.  

The 2-yr yield increased one basis point to 0.15%. The U.S. Dollar Index advanced 0.4% to 91.96. 

Reviewing Friday's economic data:

  • The February Employment Situation Report was much better than expected on the payrolls front. The payrolls increase is the highlight of the report and is apt to be the lead headline when it comes to talking about the report; however, there is a soft underbelly to the report that should not go unnoticed. The labor force participation rate was unchanged at 61.4% (down from 63.3% a year ago), the U-6 unemployment rate is still high at 11.1%, and persons unemployed for 27 weeks or more accounted for 41.5% of the unemployed versus 39.5% in January. The pace of hiring might have picked up in February, yet the travails of the long-term unemployed did as well.
    • The key takeaway from the report is that it will be seen as a sign of even better things to come for the labor market, which bodes well for growth prospects. The increase in nonfarm payrolls was the strongest since October and the best pace for February in more than 20 years, which is encouraging in that it came in front of more states seemingly destined to relax Covid restrictions in coming months as vaccination rates improve.
  • The January trade deficit widened to -$68.2 billion (consensus -$67.5 billion) from a downwardly revised -$67.0 billion (from -$66.6 billion) in December. The widening in the deficit was a byproduct of exports increasing less than imports.
    • The key takeaway from the report is that trade activity will be imputed as a drag on Q1 GDP growth for now as the real trade deficit in January was 2.4% more than the fourth quarter average.
  • Consumer credit decreased by $1.3 bln in January after increasing a downwardly revised $8.8 bln (from $9.7 bln) in December.
    • The key takeaway from the report is that revolving credit decreased for the tenth time over the last 11 months dating back to February, which preceded the initial pandemic lockdown period taking hold in the U.S.

Looking ahead, investors will receive Wholesale Inventories for January on Monday.

  • Russell 2000 +11.0% YTD
  • Dow Jones Industrial Average +2.9% YTD
  • S&P 500 +2.3% YTD
  • Nasdaq Composite +0.3% YTD

Barrons : Nuclear Power Reinforces Its Role in Clean Energy. That Will Boost Ura

Nuclear Power Reinforces Its Role in Clean Energy. That Will Boost Uranium Prices.

It has been a decade since the Japan nuclear disaster caused the energy industry to rethink the safety of the power source. But the event hasn’t led to the destruction of the market or uranium demand.
Instead, it may have highlighted the importance of nuclear-power generation in the world’s efforts to provide clean energy.

“It would be far from accurate to say that Fukushima was the death knell for the nuclear industry,” says Jonathan Hinze, president at nuclear-fuel consultancy UxC.
On March 11, 2011, Japan suffered from a 9.0-magnitude earthquake, the largest ever recorded in the country. The massive tsunamis created by the quake flooded the Fukushima Daiichi power plant and led to the worst nuclear disaster in a quarter century. “Fukushima obviously was a huge event for the nuclear industry and had both short-term and long-term effects,” says Hinze.

By 2012, global nuclear-power generation dropped by about 11% from its pre-Fukushima level, and it wasn’t until 2019 that it fully recovered to the level seen in 2010, he says. The disaster also prompted other countries to rethink their plans for nuclear energy.
Even so, Fukushima didn’t fundamentally alter the industry, says Hinze. Nuclear remains an “ongoing key component of global energy supply,” representing about 10% of annual worldwide electricity generation.

The disaster wasn’t the only reason for the fall in nuclear power. In Europe and the U.S., power prices have been “more of an enemy to nuclear plants than safety concerns,” says William Freebairn, team lead for nuclear energy and uranium at S&P Global Platts.
In those two countries, new nuclear plants have been expensive to build, and priority access to the power grid and subsidies have been given to renewable resources, he says. China, meanwhile, has “bet significantly on nuclear power to decarbonize electricity production,” he says.

Barrons : Toshiba Activists Get Backup From ISS and Glass Lewis

Toshiba Activists Get Backup From ISS and Glass Lewis

Activists appear to be gaining the upper hand in the battle against Toshiba, and that may be indicative of the future of campaigns that involve Japanese companies.

Late last year, two hedge funds made separate requests for Toshiba (ticker: 6502.Japan) to hold an extraordinary general shareholders meeting. Effissimo Capital Management asked for the meeting to determine whether shareholders’ rights were compromised at last year’s meeting. Farallon Capital Management made the call because Toshiba appeared to shift its growth strategy without consulting shareholders. The two hold roughly 15% of Toshiba shares, but aren’t working together.

Toshiba scheduled a meeting for March 18, and the activists found support from proxy advisors Institutional Shareholder Services and Glass Lewis.

Until recently, activists didn’t expect much success with campaigns in Japan, but changes in the business climate under former Prime Minister Shinzo Abe led to companies being more shareholder-friendly.

In a report released this past week, ISS supported the Effissimo proposal, saying it would “demonstrate [Toshiba’s] commitment to better governance and transparency.” While ISS opposed Farallon’s proposal, it acknowledged that Toshiba faces an “urgent need to address the deteriorating trust of its shareholder base.” Glass Lewis, meanwhile, supports both proposals.

Toshiba declined to comment, but in a presentation this past week, it urged shareholders to vote against the two proposals.

Barrons : Industrial Demand Is Returning. How Swedish Engineer Sandvik Could Be

Industrial Demand Is Returning. How Swedish Engineer Sandvik Could Be a Postpandemic Winner.

Slumping industrial demand has been a drag on Swedish engineering company Sandvik, which has seen its auto, aerospace, and mining customers suffer during the pandemic.

The world’s biggest producer of metal-cutting tools has had negative organic growth in orders for the past six quarters. But Chief Executive Officer Stefan Widing has been reorganizing the business to focus on growth areas that include rock-crushing equipment and software to help customers shift into automation.

Joel Spungin, an analyst at Berenberg, said in a note that demand for Sandvik’s manufacturing and machine business “will be severely affected in the short term, but should bounce back rapidly when economic activity recovers.”

Over the past year, the shares (ticker: SAND.Sweden) have risen 33.6%, to 231 Swedish kronor ($27.39), and could have further to go. Spungin estimates the stock could rise to SEK255. Jefferies estimates a 16% increase to SEK267.

Gael de-Bray, an analyst at Deutsche Bank, upgraded Sandvik stock to Buy in January, noting it could benefit from an acceleration in mining demand, supported by the recent surge in commodity prices. He wrote that “the market fails to reflect the profound changes that have occurred over the past six to seven years. Sandvik has become a much more reactive and flexible organization.”

The business employs 37,000 workers and has a market value of SEK284 billion. It fetches a multiple of 21.1 times this year’s expected earnings and is valued at a 20% discount to its peers.

Its main market is Europe, which accounts for 35% of revenues. Mining tools and equipment generate most of its sales, at about 40%.

Sandvik posted an operating profit of SEK11.2 billion ($1.3 billion) in 2020 on revenues of SEK86.4 billion, down from SEK103 billion in 2019 due to the shrinking world economies.

Deutsche Bank’s de-Bray says there could be a change in investor sentiment “to better reflect the group’s strong profit resilience during the pandemic, with margins now on par with high-quality industrials.”

The board was confident enough to propose a dividend of SEK4.50 per share along with an extra dividend of 2 kronor. It’s expected to be confirmed later this month.

“Sandvik is today a more flexible and agile company with a strong balance sheet,” CEO Widing told Barron’s in a statement. “As market leaders in the industries where we operate, we enable necessary shifts in digitalization, automation, electrification improving sustainability, and productivity for our customers.”

Sandvik is expanding into software development as more customers move to automation and need assistance in streamlining their processes.

The company was founded in 1862 by Göran Fredrik Göransson, whose family specialized in shipping. He was one of the first in the world to successfully use the Bessemer method for steel production, an inexpensive industrial process for the mass production of steel from carbon-rich molten pig iron.

A global recovery in industrial production will help boost Sandvik’s machine-tools unit. In addition, Berenberg’s Spungin said Sandvik’s margins at its manufacturing and machining-solutions business are expected to increase with the help of SEK675 million in cost savings.

Sandvik offers investors “a compelling combination of value creation through corporate action and exposure to cyclical recovery of industrial demand,” Spungin says.