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“Made in America” is on (government) life support, and the prognosis isn’t good

Intel and Boeing, two of the pillars of American industry.

Intel makes some of the most impressive chips in the world and has for decades, driving high-performance computing to its limits while supporting a company with a market cap today of $200 billion and supporting more than 110,000 employees. Meanwhile, Boeing remains a global leader in aviation despite retiring the 747, with $66 billion in revenue backing a market cap of $90 billion and hosting more than 153,000 workers.

Like pillars of classic Rome though, they exist merely as a shell of their former function. They are weathered, tired, and crumbling, and it doesn’t seem likely that they can hold up the American economy the way they have over the past generation, nor keep the country on the frontier of innovation any longer in their critical industries.

Deindustrialization has swept through the United States for decades of course. It started with the easy stuff — textiles, consumer widgets, appliances — but the sophistication of export-driven economies like Korea, Germany, Taiwan, China, Thailand, Turkey and others has pushed more and more of the manufacturing stack overseas.

Now, even the absolute finest pillars of American exceptionalism in industry are under deep threat. Intel is in the worst position between the two. The company’s bombshell announcement that it is delaying its next-generation 7nm node and would also begin outsourcing some of its manufacturing caused waves on Wall Street, with the stock down nearly 20% in just two weeks. Analysts increasingly believe that Taiwan contract fab TSMC is taking a multi-year lead over Intel’s technology.

Meanwhile, Boeing had and continues to have that whole 737 MAX debacle since the plane model’s first crash in October 2018. That was debilitating enough, but then you add coronavirus and the global collapse of travel on top of it, and the company’s very prospects are looking quite a bit more endangered than anyone could have anticipated two years ago.

For the United States, the first step in ameliorating these slow-motion train wrecks has been the classic policy crisis tool of the bailout. Intel is maybe the most prominent example of America’s death in semiconductors, but it is hardly alone. So Congress is targeting the industry for heavy incentives to try to bridge the gap. Two weeks ago, Senator John Cornyn (R-TX) got widespread bipartisan support for his amendment to this year’s defense budget bill that would appropriate billions of dollars of funding and incentives to propel American chipmaking.

Meanwhile, Boeing sought a $60 billion government bailout, before finding a debt consortium of private investors to fund operations. Yet, Boeing gets a different kind of support from the U.S. government, given that a third of its revenues from defense sales, which is obviously heavily driven by the Pentagon. A government bailout for the manufacturer this year is still not out of the question.

Smothering dollars on these companies isn’t going to change the rot that is spreading within. Both companies have transformed engineering-focused cultures to profit-driven maximization, while facing keen global competition that has chipped away at their advantages. Boeing is again safer than Intel — Airbus hasn’t been much better when it comes to innovation and bad strategic decisions like the A380, and China’s airframe manufacturer Commercial Aircraft Corporation of China isn’t really ready for primetime although it is certainly progressing.

It’s not that industrial policy fails, it’s that American industrial policy seems flagrantly incompetent.

Taiwan has made semiconductor excellence a critical aspect of its national economy. Korea has made cultural productions like K-pop and K-drama a top government priority, now a massive growing global industry. China has perhaps most notoriously made supporting flagship industries a key bedrock of its economic development, to much success over the past three decades. And the list continues.

What’s the difference? In one word: strategy. In each of these successful cases, governments spurred the creation of new industries through incentives and policy changes, while ensuring that these industries built up differentiated intellectual property that would pay back those incentives in spades.

The United States on the other hand always jumps in with the handouts at precisely the wrong time. Rather than incentivizing the creation of new industries, it runs to the industries in decline and sprays that cash fertilizer across the weeds and deadwood.

While Congress spends billions to try to salvage the chip industry, the Trump Administration announced a $75 million quantum computing initiative aimed at spurring America to the frontiers of advanced computing. While China is investing billions in 5G wireless technologies, America is offering hundreds of thousands of dollars to start rural testbeds.

As an economic superpower, the United States has lived in a world where it was simply, by default, the best at whatever it and its citizens wanted to be. Industries could be fragmented, government policy could be out-of-whack, schools and universities could be horrifically inefficient in training, but none of that mattered since few other countries could compete across such a breadth of industry.

Today, plenty of countries can compete in manufacturing and cultural production. And not only can they compete, but they are willing to go all-in to ensure that they succeed in these endeavors. Taiwan is not great at semiconductors because of a random constellation of factors, it’s great because it pushed its entire economy, education system, and government to prioritize its excellence on top of changes like the opening of the global economy and the rise of China.

Intel and Boeing still have a chance of course, they are still massive companies with cash and talent. Yet, one can’t help look at the history of every other collapsed manufacturing company in the U.S. and not feel a startling sense of déjà vu. We didn’t get it right those times — do we have it in us to do it right this time?

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As Boeing’s problems mount Airbus sales stall

As setbacks for Boeing’s 737 MAX accumulate, uncertainty over its path to recertification continues to impact companies within Boeing’s US supply chain, says GlobalData, a leading data and analytics company.

While some companies attempt to solicit business elsewhere, others cut jobs in order to deal with reduced demand. For …

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NASA and ESA’s Solar Orbiter begins its nearly two year journey to the Sun

After years of development, an exciting new scientific research spacecraft has launched on its journey to study our solar system’s central player: the Sun. The Solar Orbiter, developed jointly by NASA and the European Space Agency (ESA) and built by Airbus, lifted off from Cape Canaveral Air Force Station in Florida on Sunday night, launching as planned at 11:03 PM EST (8:03 PM PST).

Solar Orbiter launched atop a United Launch Alliance (ULA) Atlas V rocket, feating a special, unique configuration of the launch vehicle designed specifically to get the nearly 4,000 lb observation craft off Earth and onto its target path to eventually approach the Sun. The Atlas V used for this launch was configured with a payload fairing 13 feet in diameter to accommodate the Orbiter, and used a single solid rocket motor to provide the necessary propulsive power.

From here, Solar Obiter embarks on a journey that will take just over a year and a half, and include two close passes to Venus and Earth in order to take advantage of their gravitational pull to propel the spacecraft towards its target destination while conserving as much fuel as possible. After it swings by those two bodies to gain momentum, it’ll end up in an orbit around the sun with a close approach distance of just 26 million miles – still about 100 times as far as the Moon is from Earth, but so close that temperatures at their peak at the spacecraft will reach nearly 1,000 degrees Fahrenheit.

Solar Orbiter’s mission sees it orbiting the Sun for at least seven years, gathering data about what’s going on in the star’s heliosphere, which is roughly equivalent to Earth’s atmosphere in that it surrounds the Sun. These findings should shed new light on what goes on in the heliosphere, which will definitely be advantageous for scientific study of our solar companion, but they could also provide new information that leads to better understanding of so-called ‘space weather,’ which includes things like solar storms and flares that actually impact the proper functioning of infrastructure including communications and navigation technology back on Earth.

Onboard Solar Orbiter, there are 10 instruments to measure various phenomena and gather different types of information from the Sun, including permeating ultraviolet imaging and taking measurements from the solar wind that radiates off the star. All of these instruments had to be hardened to withstand not only those extremely high temperatures from the Orbiter’s closest approach to the Sun, but also down to nearly -300 degrees Fahrenheit, which is an amazing engineering challenge when you’re dealing with instrumentation designed to detect very fine detail. They’ll be protected in part by a heat shield made of titanium and covered with a calcium phosphate coating that will absorb most of the 1,000-degree temperatures, however, resulting in a more tolerable range of between 4 and 122 degrees Fahrenheit for most of the actual instruments themselves.

Solar Orbiter won’t be alone in its study of the Sun: NASA’s Parker Solar Probe, which launched in 2018, will be simultaneously in solar orbit, gathering solar gas samples and providing information which can be used in tandem with data provided by Solar Orbiter for a more complete picture of what’s going on at the center of our solar system.

Source: TechCrunch

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Joby Aviation raises $590 million led by Toyota to launch an electric air taxi service

Joby Aviation has raised a $590 million Series C round of funding, including $394 million from lead investor Toyota Motor Corporation, the company announced today. Joby is in the process of developing an electric air taxi service, which will make use of in-house developed electric vertical take-off and landing (eVTOL) aircraft that will in part benefit from strategic partner Toyota’s vehicle manufacturing experience.

This brings the total number of funding in Joby Aviation to $720 million, and its list of investors includes Intel Capital, JetBlue Technology Ventures, Toyota AI Ventures and more. Alongside this new round of funding, Joby gains a new board member: Toyota Motor Corporation EVP Shigeki Tomoyama.

Founded in 2009, Joby Aviation is based in Santa Cruz, California. The company was founded by JoeBen Bevirt, who also founded consumer photo and electronics accessory maker Joby. Its proprietary aircraft is a piloted eVTOL, which can fly at up to 200 miles per hour for a total distance of over 150 miles on a single charge. Because it uses an electric drivetrain and multi rotor design, Joby Aviation says it’s “100 times quieter than conventional aircraft during takeoff and landing, and near-silent when flying overhead.”

These benefits make eVTOL craft prime candidates for developing urban aerial transportation networks, and a number of companies, including Joby as well as China’s EHang, Airbus and more are all working on this type of craft for use in this kind of city-based short-hop transit for both people and cargo.

The sizeable investment made by Toyota in this round is a considerable bet for the automaker on the future of air transportation. In a press release detailing the round, Toyota President and CEO Akio Toyoda indicated that the company is serious about eVTOLs and air transport in general.

“Air transportation has been a long-term goal for Toyota, and while we continue our work in the automobile business, this agreement sets our sights to the sky,” Toyoda is quoted as saying. “As we take up the challenge of air transportation together with Joby, an innovator in the emerging eVTOL space, we tap the potential to revolutionize future transportation and life. Through this new and exciting endeavor, we hope to deliver freedom of movement and enjoyment to customers everywhere, on land, and now, in the sky.”

Joby Aviation believes that it can achieve significant cost benefits vs. traditional helicopters for short aerial flights, eventually lowering costs through maximizing utilization and fuel savings to the point where it can be “accessible to everyone.” To date, Joby has completed sub-scale testing on its aircraft design, and begun full flight tests of production prototypes, along with beginning the certification process for its aircraft with the Federal Aviation Administration (FAA) at the end of 2018.

Source: TechCrunch