Fisker idles Karma production while waiting for A123 auction

ANAHEIM, Calif., Fri Nov 30, 2012 — Fisker Automotive Inc. said that it has temporarily idled production of its Karma plug-in hybrid after its lithium-ion battery supplier A123 Systems Inc. cut its output.

A123, which is the sole battery supplier for the Karma, slowed production after filing for Chapter 11 bankruptcy protection in October, Fisker spokesman Roger Ormisher said.

Fisker has enough lithium-ion batteries on hand in case an owner needs a replacement, Ormisher said. The company expects to have clarity on its battery inventory after Dec. 6, when an auction to sell A123 is scheduled.

Auto parts suppliers Johnson Controls Inc. and China’s Wanxiang Group Corp. are among the potential buyers who will square off to buy A123. Other companies that have expressed interest in A123 include NEC Corp. of Japan and Siemens AG of Germany.

The U.S. government said this week that A123 could not be sold without its consent. Fisker and A123 have both received funding under a federal program designed to create an advanced vehicle manufacturing base in the United States.

Aerospace 2012 sales seen slowing, trade group chief says

WASHINGTON ― An eight-year growth spurt for the U.S. aerospace industry appears set to end in 2012, the industry’s chief trade group said Wednesday.

Sales are expected to have risen 3.6 percent this year to $218.1 billion from $210.6 billion in 2010, marking the eighth straight year of growth despite sluggish markets worldwide, the Aerospace Industries Association said.

But sales are projected to ebb 0.2 percent to $217.7 billion in 2012, it added in an annual year-end review and forecast.

The outlook for growth is “positive in commercial aerospace and neutral in the defense sector,” said the group, whose members include Lockheed Martin Corp., Boeing Co., Northrop Grumman Corp. and Raytheon Co.

Both the commercial and military sectors remain vulnerable to numerous variables that are capable of overturning current expectations and trends, it said.

Among these are planned U.S. military spending cuts as part of federal deficit reduction efforts.

“However, rising commercial aircraft sales (up 7.5 percent year over year through September 2011) could offset these drags on the market and may spur the commercial aviation sector to increase capital spending on new equipment,” the association said.

Aerospace exports are expected to have risen to nearly $90 billion in 2011, up 12 percent after having fallen for two years, the report said.

ConocoPhillips names insiders to head new oil and gas production and refining units

HOUSTON ― Integrated oil major ConocoPhillips named two company insiders on Friday to head its oil and gas production and refining units, whose separation is expected to be completed in the second quarter of next year.

Houston-based ConocoPhillips said in July it would spin off its refining arm from its exploration and production operations, abandoning an integrated model for two companies whose sole focuses will be on their own specific businesses.

Ryan Lance, 49, senior vice president of ConocoPhillips’s international exploration and production business since May 2009, will become chairman and chief executive of the upstream company, which will keep the name ConocoPhillips and be headquartered in Houston.Greg Garland, 53, former president and CEO of joint-venture Chevron Philips Chemical Co who has run ConocoPhillips’ exploration and production business in the Americas for a year, will be the chairman and chief executive of the refining, chemical and pipeline company.

ConocoPhillips has yet to announce a name for the downstream company or its headquarters location.

ConocoPhillips Chief Executive Jim Mulva, 65, will retire when the split is complete.

The appointments surprised some analysts, who had expected former Exxon Mobil Corp exploration executive Alan Hirshberg to run the upstream company and Willie Chiang, current head of the refining arm, to run that company.

ConocoPhillips brought in Garland to oversee exploration and production and Hirshberg to head planning and strategy a year ago in a management shake-up that included the retirement of former Chief Operating Officer John Carrig, who had been seen as Mulva’s successor.

ConocoPhillips spokesman John Roper said Chiang would continue as senior vice president of refining, marketing, transportation and commercial in the downstream company, while Hirshberg would remain senior vice president of planning and strategy in the upstream company.

Deutsche Bank analyst Paul Sankey said in a note that Hirshberg is likely “locked up” at the company, “but we believe that Chiang sees himself as a future CEO, and he would have to find that role in a different company.”

Brian Youngberg, an analyst with Edward Jones, said Lance’s background as a petroleum engineer puts a leader in operations at the top, rather than a leader from a finance and treasury background like Mulva.

And Garland’s experience running the chemical company as well as a long tenure as a project engineer at Phillips Petroleum brings a wider view including chemicals, the likely growth engine for the downstream company, Youngberg said.

Youngberg said ConocoPhillips will continue to de-emphasize refining over time, so “having someone with a broader background like Garland makes sense.”

Lance has been with ConocoPhillips, predecessor Phillips Petroleum and various divisions of ARCO for 26 years, ConocoPhillips said.

Garland was the president and chief executive of Chevron Phillips, a joint venture of ConocoPhillips and Chevron , from 2008 through 2010. He has been associated with ConocoPhillips, its predecessors and affiliated companies for 31 years, starting as a project engineer with Phillips Petroleum.

Boeing announces plan to build more planes

Boeing Co plans to increase the production rate on its hot-selling 737 narrowbody plane to 42 per month, starting in 2014, the company said on Wednesday.

The world’s second-largest plane-maker after EADS unit Airbus produces 31 1/2 737 airplanes per month and expects to increase to 35 per month in early 2012, 38 per month in the second quarter of 2013 and then 42 per month in the first half of 2014.

Boeing has 2,101 unfilled orders for 737 models, according to its website. The company has taken a net total of 65 orders for the plane this year.

Boeing is deciding whether to redesign its 737 or put a more fuel-efficient engine in the current design. A redesign would take longer but would save more fuel for budget-conscious airlines.

Airbus has said it would put a new engine in its competing A320 narrow-body. Airbus expects its sales to be boosted by the planned revamp.

In May, the European plane-maker said it will increase production of its best-selling A320 family of aircraft to a record 42 planes a month, underlining signs of a global economic recovery.

Commercial aircraft demand is picking up as air travel recovers and funds return to the leasing market. Soaring oil prices, meanwhile, are forcing airlines to renew fleets with more fuel-efficient planes.

The Airbus A320 competes with Boeing’s 737 for sales estimated at $1.7 trillion over the next 20 years.

The two competing 100-200 seat aircraft are the backbone of most airlines’ medium-haul fleets and are credited with powering the dramatic growth of low-cost carriers.

“We see this as a positive development for Boeing and the aerospace supply chain. A potential 737 rate increase has been widely discussed, but we had expected an announcement on 737 rates to occur later this year,” said RBC Capital Markets analyst Robert Stallard said in a research note.

“The earlier-than-anticipated decision would imply continued robust airline demand for the plane, but also Boeing’s ability to reassure suppliers that this is a realistic, achievable and sustainable rate increase,” Stallard said.

Boeing’s shares were down 19 cents at $74.45 in midday trading.