Peleton’s Downhill Ride

May 23, 2022

In a northwest Ohio industrial park, Peloton Interactive is building a million-square-foot factory that it will never use. The once-hot stationary bike maker is now selling the facility, which cost $100 million and to be completed this fall, as it races to downsize a manufacturing operation expanded by leaders who believed Covid-driven demand would outlive the pandemic.

Their miscalculation about demand and the shift in the market have been so costly that Peloton—a company worth nearly $50 billion about a year ago (and now $5 billion)—has laid off thousands of people, had to borrow $750 million to head off a cash crunch and is exploring a sale. It is a reminder, writes The Wall Street Journal (May 21-22, 2022), that strategic choices—not just pandemic forces—determine how businesses emerge from the crisis. 

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Chips and Chip-Making

May 5, 2022

The drought in chip availability that has hit auto production, raised electronics prices and stoked supply-chain worries in capitals around the globe has a new pain point: a lack of chips needed for the machines that make chips.

The wait time it takes to get machinery for chip-making—one of the world’s most complex and delicate kinds of manufacturing—has extended over recent months. Early in the pandemic it took months from placing an order to receiving the equipment. That time frame has stretched to 2 or 3 years in some cases. Deliveries of previously placed orders are also coming in late.

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Delivery Drones are Arriving, at Last

APRIL 8, 2022

“After nearly a decade of largely unfulfilled hype about flying robots dropping orders at your doorstep,” writes The Wall Street Journal (April 2-3, 2022), “several companies have started commercial operations in the U.S. involving dozens or hundreds of deliveries a day at each location.” The companies are vying to be Americans’ choice when they want a bottle of Advil, a takeout meal, or the next iPhone delivered in under 30 minutes—once federal regulators enable broader rollouts.

Zipline recently started working on deliveries with Walmart at an Arkansas location. Flytrex, an Israeli startup focused on food delivery in the U.S. suburbs, just announced a new delivery station in Texas after 2 years of testing. Wing, a unit of Google, has rapidly increased its deliveries in Virginia as a result of the pandemic. While still small-scale, the operations mean that in a handful of locations, regular people now can try these services for themselves.

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