Robert Bosch Tool Corporation has formed a three-year partnership with High School District 214’s Practical Architectural Construction program. The three-year partnership with the District’s Education Foundation includes the purchase of new Bosch tools for the program and the repair or replacement of damaged tools, as well as outerwear, including boots and jackets, for students to use at outdoor sites through the winter. The program also funds student internships and provides funds to support transportation to job sites and other needs. Bosch has been a longtime District 214 partner. Since the PAC program launched more than 30 years ago, District 214 students have built more than 20 single-family homes within District boundaries, including homes for veterans. They have also completed many other projects, including storage buildings and stadium press boxes.
The Bosch Community Fund is in its second year of a $15,000 gift to the District 214 Education Foundation to fund the Bosch Blueprint scholarships for students pursuing trades after high school. RBTC North America President and CEO Roger Amrol Jr. said that they are committed to the Robert Bosch Tool Corporation’s mission of “Invented for Life.”
Robert Bosch is launching a software engineering apprenticeship program to address a shortage of engineers. Bosch noted that many different innovations are impacting the market and the demand for qualified people exceeds the supply. Among the innovative approaches to developing talent is an app they use for assessing personal digital literacy. After the assessment the app makes recommendations about the appropriate levels of training for each person, including machine learning, artificial intelligence, blockchain technology and scrum methodologies. Current labor economics mean it makes more sense for the company to build their own talent pool. In the next 24 months they will need 342 software engineers; they are hoping their new program will address 10% of that need.
Stanley Black & Decker
The Morgan Stanley Laguna Conference:
SB&D was represented at the conference by CFO Donald Allan and VP Investor Relations Dennis Lange.
Headwinds will be stronger than anticipated this year. Headwinds caused primarily by tariffs were estimated at $370 million in July; the September update estimates that total headwinds will be closer to $450 million. One of the tactics they will use to deal with the tariff costs is driving price into the market in a “very surgical” way that will allow them to achieve the right levels of volume. Based on history, they typically get about 30% to 40% price recovery on these types of headwinds.
They’ve established a margin resiliency program that’s focused on driving more value in the procurement organization. They also use technologies like advanced data analytics to help them drive value.
They anticipate there will be some commodity deflation for next year, but how much is still in question.
In most cases their retail partners have been very reasonable about pricing actions they want to take, and they have assured them they want to strike the right balance between volume and price.
They plan to continue to aggressively invest in innovation because it has been a great driver for organic growth.
If they take pricing actions and then the tariffs are rescinded, that will be a benefit to the bottom line. They do not believe they will have to deal with $300 million in headwinds every year and think that the tariff situation will be resolved one way or the other.
They don’t see a housing bubble that would negatively impact consumer demand over the long haul, but they do think there may be a temporary slowdown in consumer demand related to consumer confidence.
Fifteen years ago, cordless was just emerging in the power tools market; today it is an important part of their strategy and a significant part of their business. They think the same opportunity exists in Lawn & Garden today.
They believe Stanley brand and Craftsman can coexist very well. Stanley is eating away at private label and Craftsman is a very unique brand because it goes across so many different products.
The Craftsman rollout is going well. It is up to full strength in Lowe’s and they are now rolling out on Amazon and in Menards and in a small way in NAPA Auto Parts. There will be smaller retail programs that will emerge next year.
Right now, they have the opportunity to expand the Craftsman SKU count from 500 to 1,000 over the next two or three years.
With Craftsman manufacturing, they are both outsourcing and licensing and trying to maintain the right split.
The culture in the Craftsman business has changed dramatically in the last 12 months and has become a winning and performance-oriented culture. They have upgraded their talent in the business including the leadership team and the next two layers.
The retail channel in the US continues to be healthy and strong. They see weakness in other countries.
There may be some general headcount reductions to help them combat costs.
DeWalt recalled their 40” Multi-Functional Utility Bars because they’ve received at least 56 reports of the utility bars breaking, along with four reports of injuries. They were sold at The Home Depot and hardware stores nationwide and on Amazon. They were manufactured in Mexico.
SB&D was named to the Dow Jones Sustainability World Index for the second time and the North American Index for the ninth time. The DJSI series is considered the gold standard for corporate sustainability. SB&D’s Corporate Social Responsibility strategy is aligned with the United Nations’ 2030 Sustainable Development Goals.
SB&D hosted an event to discuss the role of the private sector in advancing progress on crucial global development issues in conjunction with the US Chamber of Commerce Foundation in New York City at the end of September. The event included a series of presentations and discussions that featured examples of how companies are innovating for good and how businesses can lead in coalition building and innovating to move the needle on important issues. A whitepaper will be published in the future.
Citi Research recently visited TTI’s factory in Donguan, China which has exposure to the last batch of tariffs imposed. Citi reported that TTI should better weather the risk on stronger pricing power so they can raise prices gradually. Citi estimated TTI has at most 25% revenue exposure; more than half of their revenue is immune as they make most value-added parts outside of China.
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