Kellogg Co.
Kellogg Cereal Minecraft Box 641b1cdcad5f1

So That Happened: Kellogg to Kellanova? Why Buy an EV Now?

March 22, 2023
IndustryWeek editors look into those stories and what's up with Promat, solar energy tax credits for Arcosa and BASF celebrating women.

Editor’s note: Welcome to So That Happened, our editors’ takes on things going on in the manufacturing world that deserve some extra attention. This will appear regularly in the Member’s Only section of the site.

What’s In a Name, or Two?

It was less than a year ago that Kellogg Co. announced plans to separate into independent companies in a bid to “enhance performance and increase long-term shareowner value,” in the words of CEO Steve Cahillane last June.

The food manufacturer, known for such brands as Frosted Flakes, Froot Loops, Pringles and Cheez-It, took a further step on its journey to separation earlier this month when it announced the names for the two new companies that will emerge once it completes the spin-off of the cereal business. The separation is expected to finalize later this year.

In a nod to the legacy of the company’s founder, the North American cereal company will be called WK Kellogg Co. The lack of any punctuation is deliberate. “We eliminated the use of periods in the name to signal the start of a new, unwritten chapter,” said Gary Pilnick, who is CEO designate of the cereal company.

The second company, which will encompass snack and plant-based foods, as well as the international cereal business, steps slightly further away from the Kellogg name. It will be called Kellanova. “The ‘Kell’ overtly recognizes our enduring connection to Kellogg Company, while ‘anova,’ which combines ‘a’ and the Latin word ‘nova,’ meaning ‘new,’ signals our ambition to continuously evolve as an innovative, next-generation, global snacking powerhouse,” explained Cahillane at the announcement of the two new monikers. Cahillane will become CEO of Kellanova.

It is questionable how apparent the new company names will be to the public, however. The Kellogg’s brand will continue to be used on product packaging for both companies, the manufacturer said.

One final note: When Kellogg initially announced plans to separate last year, it was into three independent companies, not two. The plant-based business, which includes the MorningStar Farms brand, was to be a stand-alone business. Somewhere between then and earlier this year, those plans changed. In its February Q4 earnings call, Kellogg announced the decision not to spin off the plant-based business.

“You'll recall that we were exploring strategic options for the plant-based food business, which represents about 2% of our company's net sales. Given current market conditions, as well as our confidence in this business as a long-term growth vehicle, we have decided to retain it as part of global snacking company,” Cahillane said during that call.

—Jill Jusko

Cause and Effect

The link between infrastructure initiatives, the energy transition and new manufacturing jobs has grown a little tighter still thanks to word last week from Arcosa Inc. that it will renovate a New Mexico property to stand up a facility that will make wind towers.

Dallas-based Arcosa, which last year rang up more than $2.2 billion in revenues, is investing about $60 million to buy and upgrade a former Keter Plastics plant in Belen, south of Albuquerque. The move comes after the company booked about $750 million in wind tower orders (many of them for projects in the Southwest) that it plans to deliver from 2024 to 2028. Key to those new orders is their eligibility for an advanced manufacturing tax credit that was renewed in legislation passed last year.

“Since the passage of the Inflation Reduction Act, we have received wind tower orders in excess of $1.1 billion,” Antonio Carrillo, Arcosa’s president and CEO, said in a statement. “We look forward to serving the growing market for wind energy development across our four manufacturing facilities.”

The company will hire about 250 people for its new project, a solid upgrade from the roughly 60 that Keter employed in Belen until it closed shop in mid-2020.

—Geert De Lombaerde

BASF Sponsors Women in Manufacturing Association

Chemicals firm BASF Corp. announced last week that it would continue its $100,000 sponsorship of the Women in Manufacturing Association (WiM) as it looks to increase the share of its top leadership who are women. According to the company, WiM is “the only national and global trade association dedicated to providing year-round support” to women working in manufacturing.

This year’s donations, BASF said in a statement, will go toward local WiM chapters in Georgia, Texas, Michigan, Alabama and a newly formed chapter in Louisiana. Kara Callicotte, a BASF lab technician who co-chairs the Louisiana WiM chapter, said BASF’s continued support will help drive membership.

“We officially launched our chapter at the end of 2022 with 40 women representing 11 different companies,” Calicotte said in a statement. “This donation comes at the perfect time, as we are planning ways to engage and inspire our members throughout 2023.”

It also comes as BASF is trying to increase the percentage of its leadership to at least 30% women, according to Cara Madzy, a member of WiM’s board and BASF’s VP of Coatings America.

“WiM’s programming is a fantastic way for women who have chosen a career in the manufacturing industry to develop their leadership skills and network with other women,” Madzy said in a statement.

—Ryan Secard

More Robots and Cybercrime

This year’s ProMat material handling, logistics and supply chain show began March 20 in Chicago and ends tomorrow. We’ve kept an eye out for interesting tech announcements, but it’s mostly a products show that’s adjacent but not properly in our coverage area.

Our sister publication Material Handling & Logistics has a product preview slideshow you might find interesting. You can also check out ProMat coverage on another sister publication, New Equipment Digest. Artificial intelligence, vision systems and autonomous mobile robots (AMR) continue to dominate the logistics technology space.

Speaking of robotics, ABB last week announced an expansion of its North American robotics and manufacturing facility in Auburn Hills, Michigan. The $20 million investment will create 72 new jobs and support ABB's Robotics Packaging & Logistics HQ in Atlanta and the Robotics Lifesciences and Healthcare Hub at the Texas Medical Center in Houston.

ABB touts that the expanded facility will feature AI-enabled robots and smart digital manufacturing systems among other technologies. It is expected to go live in November of this year, so IndustryWeek will keep an eye on the project.

Finally, on the cybersecurity front, Ferrari on Monday acknowledged a data breach and ransom demand after cyberattackers infiltrated the company’s IT systems. Stolen data included names, addresses, email addresses and telephone numbers, but according to Ferrari the breach had no impact on operations. Sounds like the automaker dodged any real damage but consider this yet another object lesson that manufacturers really need to pay attention to cybersecurity hygiene.

—Dennis Scimeca

Jumping Into EVs

So, sometimes popup ads work. I was doing some financial research recently when an ad told me that my 2019 Ford Fusion hybrid was worth far more than I assumed… nearly what I paid for it four years ago. I didn’t believe it. A car that Ford discontinued for being unloved and unprofitable (despite it being a fantastic piece of machinery) couldn’t be worth more than 80% of its original price.

Kelly Blue Book (or these days), one of the most influential data sources for used-car values, even guaranteed the price for my car, as long as it passed an inspection at a local dealership.

Michelle Krebs, executive analyst with owner Cox Automotive, told me that her company wasn't insane offering that much for my old car.

"[Used car prices] are moderating at very high levels. They are only slightly off record levels. In recent weeks, we have seen dealers jump back into buying up used cars because used vehicle demand is strong—always is in spring when tax refunds come in. We expect used car prices to stay high for the next few years because of low inventories. We didn't sell many new cars and we are leasing very low levels so few [are] coming back off lease," Krebs said.

So, Monday, I turned in my keys and walked out of the store with a check that covered my down payment on a 2023 Chevy Bolt EV.

I’ve been fascinated by the rise of electric vehicles for years, and one that started at less than $30,000 seemed impossible four years ago when I bought the hybrid. The Bolt isn’t perfect—it’s smaller than the Ford, and it doesn’t have a few bells and whistles. Though, the new car has heated seats and a heated steering wheel, key items for living in Northeast Ohio.

Buying a Bolt these days is an adventure in its own right. Within 250 miles of me, Chevrolet only had about six models available on dealership lots. And, available means shipped to the dealership but not yet sold. The General Motors website displayed vehicles that buyers had ordered and reserved. After eliminating those, I found only one car truly available for immediate purchase—in Willard, Ohio, a farming community more than an hour away from Cleveland.

In this case, timing was crucial. I had to buy immediately in case used-car values fell or the federal government finalized rules on EV tax credits. Last year’s Inflation Reduction Act provides a $7,500 tax credit for domestically produced EVs, but most vehicles won’t qualify until larger portions of the battery supply chain come to the U.S. However, until those rules are finalized in the coming weeks, anyone buying a Bolt (made near Detroit) qualifies for the full number. Hence the scarcity of the car.

So, spurred by what I still believe to be mistaken pricing on my old car and federal tax credits, I’ve joined the EV world. It’s too soon to share experiences. My drive home from the dealership was uneventful, as was my commute to the office this morning. Charging the vehicle overnight in my garage was fairly simple. But, I’ll share any lessons learned as I get used to this new way of fueling my ride.

—Robert Schoenberger

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