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The MPW50: Flying high and laid low

March 1, 2006

10 Min Read
The MPW50: Flying high and laid low

The MPW50 is an acknowledgment of the sensitive dependence on initial conditions-better known as the butterfly effect. An OEM in Finland coughs, and manufacturing facilities in Ft. Worth are closed. Or, on a more positive note, an OEM in Cincinnati smiles, and processors in five countries suddenly need to add capacity. Our quarterly update highlights 50 OEMs whose actions often reverberate throughout the plastics processing world.

3M
3M ended 2005 by driving its calendar year sales to $21.2 billion: a 15% increase over 2004. The company continued push into emerging markets for its film division, planning a new LCD optical-film manufacturing plant in Wroclaw, Poland and acquiring Siemens Ultrasound''s flexible-cir- cuit manufacturing line in Canoga Park, CA.

Abbott Laboratories
In Dec. 2005 declared a quarterly common dividend of $.275 cents-the company''s 328th consecutive quarterly dividend paid since 1924. Jan. 8, Abbott annnounced that it entered into an agreement with Boston Scientific to acquire Guidant''s entire vascular business, worth $1 billion in 2004.

Apple Computer Inc.
As the company reported its highest-ever quarterly revenue ($5.75 billion) and profit ($565 million), shipping 1.2 million computers (up 20%) and 14 million iPods (up 207%) in its fiscal first quarter, Apple moved forward to transition all its Macs to Intel''s Core Duo microprocessor chips by 2007.

Black & Decker Corp.
Investment analysts at J.P. Morgan say new power tool products, expanding profit margins, and a strong cash flow should allow Black & Decker to out-perform its peers this year.

Baxter International
Reported its Q3 2005 sales were $2.398 billion, up 3% from the same period a year earlier, with strong sales in all of the company''s divisions that include BioScience, Medication Delivery, Renal Care, and its international sales.

Bristol-Myers Squibb Co.
The company will pay $185 million to create a settlement fund to stockholders to settle a class-action suit alleging the drug-maker had "artificial ly inflated its stock price by making false and misleading claims about experimental heart drug Vanlev."

Canon Inc.
Canon is set to open the world''s largest laser printer factory in Bac Ninh province, Vietnam this year. The company says it can produce and ship Vietnam-made printers at about half of China''s labor costs.

Caterpillar
Stating a goal of $50 billion in sales by 2010, heavy-equipment giant Caterpillar exploited global increases in raw materials mining and construction for record earnings. In boost to captive manufacturing, it purchased a majority interest in JV partner Rapisarda Industries, an Italian hose manufacturer.

Centex Homes
Reported fiscal year 2006 Q2 operating earnings grew 51% to $514 million, and revenue for the period was $2.89 billion, up 36% from a year ago.

Cisco Systems Inc.
Networking hardware supplier Cisco has taken an early lead in Internet protocol phones with 30,000 customers and 7 million units sold, paying off an R&D bet of more than $1 billion made in 2002. The company is also looking into Indian manufacturing, with plans to invest $1.1 billion through 2009 and entice suppliers like Solectron (routers), Celestica (routers), Jabil Circuit (switches), and Flextronics (printed circuit boards).

Collins & Aikman
Filed for bankruptcy on May 17, 2005. C&A said year-on-year Q4 sales were off $76 million, with Big Three volumes down 5% and costs for resins up across the board. New President and CEO Frank Macher says firm is entertaining all bankruptcy emergence options, including selling off businesses.

Cummins
Interest in renewable fuel sources is increasing, and Cummins approved use of B5 biodiesel (5% biodiesel, 95% petroleum diesel mix) for its on- and off-highway engines.

DaimlerChrysler
The firm has hired Goldman Sachs to gauge interest in its Smart group. DCX''s largest shareholder, the Kuwait Investment Authority (7.2% ownership), is pushing for sale of Smart.

Dell
Dell is countering last year''s revenue growth slowdown by focusing its efforts on sales of higher-cost and -margin PCs.

Delphi Corp.
Automotive supplier Delphi declared bankruptcy on Oct. 8, ahead of Oct. 10 changes to insolvency laws. North America looks to bear the brunt of salary and workforce reductions, with initial plans calling for the closure of 11 U.S. plants and cutting 11,000 workers.

Fluor Corp.
With $2.3 billion in revenues, Fluor ranked number two in the Top 500 Design Firms survey for the second year in a row, conducted by trade magazine Engineering-News Record. Company ranks number two in Fortune magazine''s `World''s Most Admired Companies'' list.

Ford Motor Co.
Ford continued to lose market share in December, and U.S. sales in 2006 "probably won''t outshine" 2005. On Jan. 23, Ford announced its Way For- ward plan, which will eliminate between 25,000 and 30,000 jobs and close 14 manufacturing and assembly plants by 2012.

General Motors Co.
GM''s sales were down10% in December. GM reported losses of $4.8 billion in Q4 and a total of $8.6 billion for 2005. The company sold 9.2 million vehicles worldwide in 2005, but global market share is down to 14.2% in 2005 from 14.4% in 2004. 2006 sales are expected to reflect 2005''s.

The Gillette Co.
Razor blade producer Gillette was swallowed by Procter & Gamble (P&G) in October 2005. Market observers will be looking to see if P&G can integrate Gillette into its existing structure this year.

Haier Group
Qingdao, China-based whiteware giant fails in bid to take over Maytag. Nevertheless, $13.4 billion giant sees exports and overseas production skyrocket 40%. Sets sights on global brand building.

Hewlett-Packard Co.
2005 sales triple and HP shares had their biggest percentage gain, by more than a third, since 1999. Mark Hurd named new CEO in March 2005.

Honda Motor
What a year! Civic wins 2005 North American Car of The Year Award. Ridgeline wins Truck of the Year. North American sales grow for 12th year in a row to close to 1.5 million vehicles. Automaker is studying need for sixth North American plant.

Hyundai Motor Co.
Korean auto upstart sees its overseas sales jump 13%, and overall sales 11%. Expansions are underway in China and India, and a new plant is slated for Europe.

Illinois Tool Works Inc.
Diversified manufacturing technology company Illinois Tool Works added to its plastics-related portfolio, acquiring material-testing equipment supplier Instron, which joins ITW Devcon, ITW Finishing Systems, ITW Foils, and ITW SprayCore, among others.

Johnson Controls, Inc.
Sales in 2005 rose to just under $28 million from $25 million the previous year. With the acquisition in July of the battery business of bankrupt Tier One supplier Delphi Corp., Johnson Controls becomes the world''s largest manufacturer of lead-acid automotive batteries and casings.

Johnson & Johnson
Did not raise its bid for Guidant Corp., the troubled medical device maker; as a result, rival Boston Scientific Corp. acquires Guidant.

Lear Corp.
Interior system supplier Lear signed a deal with investor Wilbur Ross, creating capital backing to pursue interior trim acquisitions, including C&A''s injection molding business. Lear also introduced a two-shot technology for large interior parts in conjunction with Husky.

LEGO Holding A/S
Swiss production of LEGO injection molded toys is being transfer to the Czech Republic and outside suppliers in Eastern Europe during the first half of 2006. It is also closing its Steinhausen, Switzerland-based tooling works and will source future molds from external moldmakers.

Lenovo
Chinese computer maker reports doubling of cellphone sales in quarter ending September 2005. Takes over its mobile handset JV. Retains top position for laptop customer satisfaction in Technology Business Research report.

Lexmark
The printer manufacturer saw FY05 revenue and earnings drop. New printers will focus on growth markets such as small office/home. A restruc- turing plan includes closure of its inkjet cartridge facility in Rosyth, Scotland.

LG Electronics
Korean electronics giant unveils strategy to focus on high-end products such as flat panel TVs and steam-cleaning washing machines, expand presence in mobile phone market.

Lucent Technologies Inc.
Will take a $300 million charge against first-quarter (2006) earnings after a judge fined the telecom-equipment mker for breach of contract in a lawsuit filed four years ago by the now-defunct Winstar Communications.

Microsoft Corp.
New Xbox 360 gaming console shipped 1 million units by year''s end (Microsoft had targeted 3 million units by February), angering customers and retailers. Adding Celestica for manufacturing, along with Flextronics and Wistron, the company hopes to ship 4 million in 2006, with competition from Sony''s Playstation coming in the spring.

Motorola, Inc.
The company''s molding and assembly plant in Flensburg, Germany has been named the "Factory of the Year 2005/Global Excellence in Operation" for its innovative production in a competition conducted by German magazine `Produktion'' and management consultancy A.T. Kearney.

Nike, Inc.
New president and CEO William Perez joined the board in late December, taking the place of co-founder Phil Knight, who resigned. Analysts at Jyske Bank expect Nike to post a 15% earning growth during 2006.

Nissan Motor
Revitalized automaker is releasing 20 new and redesigned models between September 2006 and March 2008. Forecasts global sales will reach 4.2 million units in the year ending in March 2009. According to Consumer Reports, Infiniti''s QX SUV is the least-reliable car on the U.S. market.

Nokia
The Finnish telecom giant can thank Chinese consumers for its solid FY05 results. China has become Nokia''s top market accounting for 11% of its global sales. Nokia''s growth in China comes at the expense of many domestic cell phone makers.

Paccar
Affiliate truck maker Kenworth scoops five of six J.D. Power customer satisfaction awards it is eligible for. Interim results point to best year ever for 100-year-old firm.

Philips
Sales growth for FY05 of 4% was led by its medical systems, consumer electronics and semiconductors divisions. Comparable sales in the BRIC (Brazil, Russia, India, China) countries climbed 23%.

Procter & Gamble
P&G recognized the higher cost of commodities but had a bang-up Q4FY05. The results included Gillette for the first time, and unit volume sales rose 27%. Its stock''s value hit all-time highs.

Samsung Electronics
Samsung plans media blitz to knock Apple off top spot in digital music players by 2007. Plans 52" LCD production in 2007. Releases first Blu-ray DVD player in U.S.

Solectron
EMS major opens design centers in Romania and Guadalajara, medical manufacturing plant in Singapore, creates an Enclosure Center in Guadalajara, announces 85% global readiness for RoHS.

Sony
Japanese giant falls out with consumers in CD copy-protection fiasco, but appears to be on the road to winning the Blu-ray vs. HD DVD format war with more than 140 members in its camp.

Toyota Motor Co.
Japanese leader captures 13.3% share of U.S. market in 2005. Targets 10% growth this year on back of unveiling at least nine new models. Poised to open sixth North American factory. May overtake GM in global stakes in next two years

TRW Automotive
Maker of active and passive safety systems, reported fiscal Q3 sales of $2.9 billion, up 6.5%, and expects full-year revenues for 2005 of approxHoldings Corp. imately $12.6 billion. The company acquired a majority stake in Dalphi Metal Espana SA, a European maker of airbags and steering wheels.

Unilever
Announced it would sell the majority of its European frozen foods business, including brand names Birds Eye and Igloo; annual sales oft this busi- ness are about ?1.4billion. Sale won''t include ice cream.

Visteon Corp.
Visteon signed Oct. 1 deal that transferred 23 plants and 18,000 UAW employees back to Ford, dropping average hourly wage from $38 to $17, low ering average plant employment from 680 to 500, and shedding 13 facilities larger than 1 million ft2 in North America. By 2008, Visteon plans to draw 36% of sales from Asian automotive OEMs, and raise to 75% (from 64%) its manufacturing footprint (by employees) in lower-cost locales.

Volkswagen
Personnel cuts will continue this year, most through incentives, as the carmaker works to cut costs. This year the firm starts sales of its well-estab- lished Volkswagen Golf hatchback in the U.S.

Whirlpool & Maytag Corp.
Announced last August that Whirlpool would acquire rival appliance maker Maytag in a $1.79 billion transaction, pending regulatory approval, that was expected to have been completed early in the first quarter of 2006. Antitrust ruling deadline is set for March 30.

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