Manufacturing Industry Advisor

As public companies across the economic spectrum strive to overcome the supply chain disruptions drastically affecting revenue and profitability, they must not lose sight of how these disruptions impact their disclosure obligations under federal securities laws. The Securities and Exchange Commission (SEC) has demonstrated particular interest in this topic by issuing broad guidelines in recent years designed to encourage transparency with respect to how current events are impacting a company’s supply chain, and what that…
With disruptions affecting every aspect of the supply chain, companies are increasingly encountering legal arguments offered to justify a failure to meet supply obligations. This article in the Supply Chain Disruption Series provides a concise summary of the three legal theories frequently invoked to excuse nonperformance of contractual duties. Force Majeure Overview The concept of force majeure (French for “superior force”) originates in common law. Today, however, force majeure primarily comes into legal play as…
The funding environment for emerging companies has fundamentally shifted in 2022 for both venture capital and IPOs, particularly after a banner year in 2021. Whether these headwinds suggest significant economic changes or a return to previous valuation levels, companies need to be realistic about adapting their business processes to ensure they have sufficient cash runway to succeed through the next 2-3 years. This article provides a comprehensive set of tactics that can be…
With the push toward clean energy and increased demand for electric vehicles, manufacturers need batteries — specifically lithium-ion batteries — more than ever. Examples of the accelerating transition to battery powered vehicles are everywhere: the United States Postal Service announced at least 40% of its Next Generation Delivery Vehicles and other commercial vehicles will be electric vehicles, Amazon has begun using Rivian delivery vans in over a dozen cities, and Walmart executed an agreement to…
This news summary is provided by Foley’s Competitive Intelligence Team to inform business leaders of recent news and developments relevant to the Manufacturing Sector.   Analysis by Julie Dautermann, Competitive Intelligence Analyst Key Developments The sixth installment of Foley & Lardner’s Supply Chain Disruption Series addresses some of the factors to consider pertaining to intellectual property licensing in supply agreements. Click here to subscribe to the series. The National Association of Manufacturers remains “staunchly opposed” to the…
Companies often enter into supply agreements for component parts that are covered by or produced using a supplier’s intellectual property (IP) rights, but do not give enough thought to IP licensing. In the face of supply chain disruptions and the associated need to investigate second-sourcing and in-housing options, suppliers may be keen to capitalize on those rights to prevent such production of their proprietary parts. For example, the supplier may assert that the component part is…
As economists and news outlets inform us daily, a recession is coming – with some asserting it is already here. For many companies this signals a major change to what has been a very tight labor market. Employers are well aware that during the economy’s recovery from the COVID-19 pandemic, the ability to hire and retain talent has been a challenge. Compensation increases, signing bonuses, and retention bonuses became commonplace in an effort to attract…
With steep inflation and seemingly constant disruptions in supply chains for all manner of goods, the Biden Administration has turned increasingly to antitrust authorities to tame price increases and stem future bottlenecks. These agencies have used the myriad tools at their disposal to carry out their mandate, from targeting companies that use supply disruptions as cover for anti-competitive conduct, to investigating industries with key roles in the supply chain, to challenging vertical mergers that consolidate…
Geopolitics have always impacted supply chain logistics, but over the last two years they have played an outsized role that will likely continue for the foreseeable future. While the COVID-19 pandemic demonstrated the risks of just-in-time sourcing strategies and lack of alternate or dual sources in many supply chains, geopolitical risk will remain as a key driver in supply chain decisions going forward. Companies have learned from the response to Russia’s Ukraine invasion that Western…
As we pass the midpoint of 2022 and the world expresses a collective sigh of relief that the worst of the COVID-19 pandemic seems to be behind us, a perfect storm of extraordinary factors is creating conditions for financial distress throughout many supply chains. In short, there is a substantial risk that companies obligated to pay you for goods or services or to supply goods or services to you might become unable to do so.…