AGP Executive Report

Defense & Industrial Base: The House Armed Services Committee advanced FY27 NDAA provisions, including expanded right-to-repair authority and added counter-drone oversight tied to legacy aircraft like the A-10. Missile Manufacturing: Lockheed Martin is set to begin flight testing PrSM Increment 4 for HIMARS in fall 2026, targeting a range over 1,000 km. Shipbuilding Gap: A new report revisits how U.S. commercial shipbuilding is nearly extinct versus China’s output, with the Philly shipyard still relying on decades-old equipment. Critical Minerals & Trade Politics: Sen. Jon Ossoff questioned Kazakhstan’s tungsten deal after it became linked to Trump sons, while the U.S. pushes rare-earth mining and processing to reduce China’s dominance. Semiconductors & AI Supply Chain: ASML says Elon Musk will join a closed-door tech conference tied to Terafab, underscoring how chipmaking equipment is central to U.S. AI manufacturing plans. EV & Charging Hardware: Foxconn unveiled the Cavira EV SUV aimed at Tesla’s Model Y segment, and Wisconsin-based FTI launched a ready-to-install EV charging product as it steps out as an OEM. Food Supply Costs: Restaurant operators report sharp wholesale price spikes since the Iran war, raising fears of further menu price pressure. Regulatory/Compliance: FDA warned against “sexual chocolate” products with undisclosed ED drugs, and Target recalled specific Up&Up baby wipes over contamination concerns.

USMCA Auto Stability: A new op-ed argues the USMCA should stay “as-is” because it underpins Georgia’s auto manufacturing jobs and investment, warning that policy churn could chill production plans. Defense Logistics Expansion: BJC Logistics says it landed 2026 defense and aerospace contracts, including work tied to Lockheed Martin, Raytheon and BAE Systems, positioning itself for higher-demand, DoD-compliant secure transport. Gulf Reconstruction Funding Fight: The Trump administration is weighing whether to redirect Iranian frozen assets to pay for repairs to Gulf allies after recent attacks, a move that could complicate ceasefire talks as Iran demands release of $24 billion. Iran Escalation at Hormuz: The US struck Iranian coastal radar sites after drone attacks aimed at maritime traffic, while Iran and regional partners traded retaliatory claims—raising near-term risk for energy and shipping. Manufacturing Tech Transfer Abroad: Serbia’s “Chinese brain” factory systems highlight growing Chinese tech and automation influence as Serbia deepens industrial upgrading under its free-trade ties. Energy Grid Software: Google and Voltus are expanding virtual power plant efforts, pointing to more demand-side flexibility as data centers and distributed energy grow. Modular Housing Labor Rules: A Massachusetts modular housing project faces a key question: whether prevailing wage rules apply to factory-built modules, which could determine whether the model scales. AI Public Ownership Debate: AP reports policymakers are debating public ownership in AI firms as backlash grows over data centers and jobs, with Trump and Sanders both engaging the idea.

Gulf Tensions & Defense Industrial Impact: The U.S. struck Iranian coastal radar sites after downing drones aimed toward the Strait of Hormuz, while Iran and Gulf states traded accusations and missile attacks—raising near-term risk for maritime traffic and defense readiness. Military Aviation Modernization: The F-35B TR-3 Technology Refresh-3 upgrade hit a key production milestone at FRC East, setting up future Block 4 hardware retrofits for the Marine Corps’ STOVL fleet. Trade Policy Uncertainty: The administration moved to impose new tariffs on Brazil and dozens of other countries after a court setback, reviving fears of higher input costs and delayed manufacturing investment. Energy & Nuclear Supply Chain: DOE said Antares’ microreactor reached criticality at Idaho National Lab, a step toward near-term electricity generation and renewed U.S. nuclear momentum. Semiconductor Materials in Texas: Soulbrain’s U.S. expansion in Taylor, Texas—high-purity phosphoric acid for advanced chipmaking—won a $12M semiconductor supply-chain grant. Food & Consumer Safety: Target recalled Up & Up baby wipes after FDA testing found potentially dangerous bacteria, a reminder that manufacturing quality control still drives real-world risk.

Advanced Nuclear: Antares Microreactor hit initial zero-power fueled criticality at Idaho National Laboratory, marking the first privately developed non-light-water reactor to reach criticality in the U.S. in more than four decades. Industrial Supply Chains: Container freight rates jumped sharply as peak-season demand collided with Middle East disruptions, with Asia-to-U.S. West Coast spot rates up 20% in a week and more than doubling since late February. Labor & Demand: The U.S. job market added 172,000 jobs in May, keeping unemployment at 4.3% and signaling resilience even as consumers feel squeezed by prices. Manufacturing & Trade Policy: A weekly auto roundup flagged right-to-repair pressure, GM pickup production strain from a supplier strike, and Novelis’ planned Oswego hot mill restart to ease Ford F-150 supply issues. Regional Manufacturing Footprint: Central Ohio’s warehouse boom may look plain, but it underpins hundreds of thousands of jobs tied to manufacturing and logistics. Energy Transition Politics: Trump announced $700M for “clean, beautiful coal” infrastructure under the Defense Production Act, aiming to save and restart coal capacity. Tech Rivalry: Experts in Taipei said the U.S.-China “chip war” will hinge as much on manufacturing scale and supply chains as on AI software.

Manufacturing & Jobs: The U.S. economy added 172,000 jobs in May, beating forecasts, with unemployment steady at 4.3%—a backdrop that’s keeping pressure on the Fed and signaling resilience for hiring. Industrial Restructuring: Whirlpool announced another round of layoffs at its Middle Amana, Iowa refrigerator plant, cutting 288 more workers and bringing total cuts to 879 since last summer. Supply Chain & Policy: A new AlixPartners survey finds life sciences firms are struggling with supply chain disruption, with tariff uncertainty and high costs topping concerns. Advanced Manufacturing & Tech: Marvell is set to join the S&P 500 after clearing a profitability hurdle tied to the AI boom, underscoring how data-center chip demand is reshaping U.S. markets. Food Safety/Labeling: FDA and CDC are investigating a multi-state cheese-related outbreak, while a proposed Celiac Safety Act would expand gluten labeling beyond wheat to include barley and rye. Recall Watch: Haleon recalled select Gas-X Extra Strength softgels over possible packaging contamination. Auto Manufacturing Quality: Subaru recalled nearly 70,000 2026 Forester models over moonroof glass panels that may detach due to bonding issues.

Defense Industrial Base: The House Armed Services Committee advanced the $1.15T FY2027 NDAA after a marathon markup, with leaders warning the U.S. can’t manufacture critical defense goods fast enough and lacks domestic mineral processing capacity. Energy & Manufacturing: Trump says the federal government will spend $700M to build or refurbish coal power infrastructure under the Defense Production Act, aiming to preserve plants and jobs. Trade Policy: USTR’s top trade official said the U.S. will respect tariff caps in deals with the EU and Japan (“a deal is a deal”), while other coverage flags businesses’ demand for tariff clarity. AI & Workforce: Microsoft data shows Massachusetts generative AI use is high (33.4% of working-age residents), but counties with more manufacturing employment report lower adoption. Security Tech for Industry: Drone-defense firms are pitching stadium and venue protection systems as drones become a growing threat. Regulatory/Compliance: Florida updated court-filing rules after AI “hallucinations,” requiring attorneys to verify cited legal authorities. Environment & Industrial Accountability: Wisconsin reached a major PFAS settlement with Tyco Fire Products/Jonson Controls over delayed reporting and long-term clean-water obligations.

Defense Industrial Base Expansion: Austal USA opened phase one of Module Manufacturing Facility Three in Mobile, Alabama, aimed at boosting Navy submarine output; phase one includes fabrication, outfitting, electrical, pipe fitting, and painting space, with up to 1,000 jobs expected locally. Energy & Manufacturing Policy: Trump announced up to $700M for coal-fired power infrastructure under the Defense Production Act, including new plants in West Virginia and Alaska, to protect coal plants and mines and support manufacturing-linked jobs. Trade & Tariffs: USTR Jamieson Greer said the U.S. will respect tariff caps in EU/Japan deals, while forced-labor tariffs and a separate Section 301 probe into excess manufacturing capacity could push rates higher without caps. EV/Battery Supply Chain: CATL expects energy storage to reach 50% of global battery sales by 2030, citing grid needs to pair with renewables; the company operates plants in Germany, Hungary, and Spain. Auto Supplier Investment: Kamtec Auto USA plans its first U.S. facility in Auburn, Alabama, investing $9.2M to create about 50 jobs making hybrid vehicle engine control and electric management components. Industrial Compliance & Security: ICE detained 48 workers at a South Carolina metal casting business during a fake-document investigation, underscoring enforcement pressure on manufacturing employers. Capital Markets/Tech Manufacturing: SpaceX launched its IPO roadshow with a fixed $135 share price and plans a June 11 pricing and June 12 Nasdaq debut, with major implications for U.S. high-tech manufacturing capital flows.

Industrial Energy & HVAC: Transaera says humidity control is the bottleneck in commercial HVAC—and after a six-month field trial at an Amazon logistics site, it’s scaling rooftop cooling/dehumidification that removes moisture first using metal-organic framework materials. Shipyard Modernization: Konecranes’ 200-foot portal crane “Big Blue” (P-82) left Manitowoc, Wisconsin for Pearl Harbor, part of a $370M Navy shipyard equipment upgrade. Defense Manufacturing: Raytheon won a $515M contract to advance SPY-6 maritime radar integration and testing for the U.S. Navy. Semiconductors & AI Supply Chain: TSMC CEO C.C. Wei told shareholders demand for AI compute remains strong and hinted it would like to raise chip prices—while stressing long-term, sustainable pricing. Quantum Computing: Microsoft unveiled “Majorana 2,” an AI-designed quantum chip aimed at commercially useful systems by 2029. Trade & Tariffs: An opinion argues the U.S. should narrow tariffs on goods that can’t be made in America to reduce consumer cost pressure while still encouraging reshoring. Clean Energy Manufacturing: Clean Energy Fuels completed an East Valley Cattle RNG facility in Idaho, injecting pipeline-quality renewable natural gas from dairy digesters. Local Manufacturing Growth: Foley, Alabama secured a nearly $3.33M state grant to buy a 121-acre industrial site for new jobs.

Labor Negotiations: Dauch’s Three Rivers auto-parts plant strike is entering a tense standoff: the company says “very active” talks are underway, while the UAW says no bargaining has resumed since the walkout began. Workforce & Training: The Appalachian Regional Commission awarded Southwest Virginia Community College a $1.82M grant to expand advanced manufacturing and skilled technician programs. Defense Industrial Base: TACOM leaders used the Michigan Defense EXPO to push a more proactive readiness model, while an assistant secretary visit focused on future resilience and supply-chain vulnerabilities. Trade & Tariffs: USTR proposed new Section 301 forced-labor tariffs covering 60 economies as older Section 122 duties near expiration; Manitoba’s trade rep complained the administration drops tariff moves without warning. Manufacturing Policy Relief: Tariffs on farm equipment were temporarily eased from 25% to 15% through end-2027, with a lower 10% rate for products using mostly U.S.-sourced metals. Industrial Expansion: Mosdorfer will open its first U.S. factory in South Carolina’s Upstate, investing $44.55M to make high-voltage transmission components. Tech for Industry: OnLogic launched DNV-certified industrial computing for maritime bridge/control/engine-room use, aiming to reduce audit and certification headaches.

Tariff Push: The U.S. is weighing new forced-labor-related tariffs on imports from 60 trading partners, with proposed add-ons of 10% for some countries and 12.5% for others, including major economies like China, India, Japan, and South Korea. Regulatory Acceleration in Biotech: The FDA issued draft guidance aimed at speeding gene-therapy development by letting sponsors lean more on existing scientific and manufacturing knowledge, including CMC data. Defense Manufacturing: Northrop Grumman is bringing satellite bus maker Apex onto a Space Force space-based interceptor effort, while the Marine Corps is seeking a potential second supplier for JLTVs amid reported AM General delivery delays. Security & Fraud Tech: Google rolled out Android “fake call detection” using RCS-based device verification to fight AI voice-cloning scams. Industrial/Market Signals: Medtronic reported FY2026 results with its strongest annual revenue growth in a decade, and Enphase outlined how gallium nitride is improving microinverter performance for solar and grid applications. Local Procurement Pressure: Cities including Tempe and Mesa are weighing antitrust litigation over alleged fire-truck manufacturer price collusion.

AI & Data Readiness: Gartner says supply-chain AI is hitting a wall because many teams haven’t fixed their data foundations, warning that “cleansing” alone won’t close the gap. Recycling Policy: America’s Plastic Makers’ Ross Eisenberg discusses the Recycled Materials Attribution Act, aiming to set federal standards for advanced recycling and give manufacturers regulatory certainty. Trade & Tariffs: USTR Jamieson Greer says Section 301 investigation results will be released in coming weeks, with potential tariff or other measures. Metals Cost Relief: Trump eases parts of steel/aluminum/copper tariffs, cutting duties on some ag and industrial equipment from 25% to 15% (and some items to 10% with U.S. metal content). Labor: UAW strike begins at Michigan supplier Dauch Corp. (American Axle) after talks fail, echoing long-running wage and offshoring tensions. Auto Manufacturing: Hyundai Metaplant America starts U.S. production of the Kia Sportage Turbo-Hybrid in Georgia, expanding beyond Hyundai EVs. Food Safety: Motor City Pizza Co. recalls certain 5 Cheese Bread batches over potential salmonella contamination. Industrial Expansion: Leprino Foods nears full capacity at a new Lubbock, Texas cheese plant, while Grande Cheese ramps an expanded Wisconsin mozzarella facility. Energy for Data Centers: Xos launches a 2.5MWh “Power Hub” designed to deliver megawatt-scale power to AI and industrial sites in days, not years. Defense Industrial Base: Canada confirms a $2.6B HIMARS launcher purchase from the U.S., with deliveries starting in 2029.

Tariff Reset for Metals: The White House signed an order adjusting customs tariffs on copper, aluminum, and iron derivatives, cutting some products (including certain agricultural machinery and HVAC equipment) to 15% from 25% for qualifying trade partners, while adding 25% tariffs for steel racking systems and aluminum lithographic printing plates; changes start June 8 and run through end-2027. Industrial Automation Deal: Airline Hydraulics acquired Industrial Automation Supply (IAS) in Portland, Maine, expanding New England controls capabilities and adding about 30 employees while keeping IAS’s local site as a division. Manufacturing Momentum Watch: Multiple reports highlight U.S. manufacturing activity hitting a four-year high in May, with supply constraints still shaping output. Defense Repair Push: A “Warrior Right to Repair” push would let the military oversee repairs of its own equipment instead of relying on costly contractor-only arrangements. EV Charging Buildout: Beam Global deployed six more solar-powered EV ARC charging systems for Long Beach fleet operations and airport charging. AI Infrastructure Expansion: Core42 expanded its U.S. AI compute at Lake Mariner (NY) from 18MW to 60MW, adding NVIDIA and AMD capacity.

US Manufacturing Momentum: ISM’s May Manufacturing PMI jumped to a four-year high (54), with faster new orders and production, even as employment and inventories stayed soft—suggesting a real pickup but one tied to near-term pressures. Supply Chain Strain: Manufacturers are reporting shortages of aluminum, semiconductors, steel, and electrical parts, with Iran-related disruptions pushing up prices and delivery delays. Trade & Policy Ripples: A Reuters report links the manufacturing rebound to businesses front-loading orders amid uncertainty, while markets also react to the US-Iran ceasefire chatter. Workplace Safety Focus: Multiple state-by-state pieces highlight how OSHA-driven compliance demands are increasing the workload for safety managers, pushing more firms toward centralized safety documentation and tools. Food Safety Spillover: A salmonella recall expanded again, adding more products sold at major retailers including Costco and Walmart. Industrial Tech & Capacity: IMTS 2026 in Chicago spotlights new machine tool capabilities and the growing role of AI and automation on the shop floor. Clean Energy Manufacturing: SEG Solar announced a third US module plant in Texas, and Tandem PV added former Energy Secretary Jennifer Granholm to its board as advanced solar scales.

Semiconductor Supply Chain: Micron started manufacturing its 1α (1-alpha) DRAM technology at its Manassas, Virginia fab, expanding DDR4 wafer supply and targeting long-lifecycle markets like automotive, aerospace, defense, industrial networking, and medical devices. Industrial Policy & Resilience: The move underscores how memory production is increasingly tied to U.S. localization goals and strategic infrastructure demand. Manufacturing Operations: Sheetak partnered with Dr. Neumann Peltier-Technik to sell DNPT’s PELCORE TEC controller line across North America, aiming to simplify sourcing by pairing TEC modules with precision control electronics. Aerospace Footprint: Field International is preparing to launch a Pensacola, Florida manufacturing facility, hiring 50 roles in phase one with more planned as expansion ramps. Global Trade Pressure: Reuters reports Iran-war supply shocks are hitting European factories harder, while Asian activity expands as firms stockpile. Labor Signals: WARN filings suggest June layoffs may be slowing, even as companies continue to reshape workforces around automation and AI. Market Watch: China’s official manufacturing PMI stalled in May as export orders contracted and costs rose, adding pressure to boost domestic demand.

Retail Real Estate: Publix keeps expanding in Southwest Florida, buying the 110,780-square-foot Daniels Crossing shopping center off Six-Mile Cypress for more than $36M, anchored by a rebuilt Publix prototype store plus tenants like Quest Diagnostics and UPS. Housing & Manufacturing Supply Chains: Berkshire Hathaway agreed to buy Taylor Morrison for $8.5B enterprise value, adding Clayton Homes’ manufactured-housing footprint to Taylor Morrison’s site-built communities—an industry consolidation move that could reshape demand for building materials and factory output. Biopharma Manufacturing: UCSF research highlights why biosimilars are harder to scale than generics, with uneven global rules slowing approvals for high-spend biologics. Defense Industrial Base: Zelensky warns the U.S. isn’t producing enough anti-ballistic missiles and urges more Patriot missile production and licensing for Ukraine. Semiconductors: Samsung’s Taylor, Texas foundry cleared another milestone, with customers scheduled to begin production next year and a 2027 timeline for advanced 2nm work. Food & Ag Risk: Japan expects June price hikes on 1,078 food and beverage items as Middle East-linked supply pressures hit naphtha inputs. Compliance & Fraud: Federal charges allege a water-heater return scheme using altered serial numbers to net $1.7M in Home Depot gift cards. Workforce Signals: Pacific County, Wash. unemployment dipped to 6.8% in April; local manufacturing employment rose year over year.

Industrial Policy & Trade: USDA rolled out the “Great American Cotton Plan,” pushing “Plant Not Plastic” to steer consumers and procurement toward U.S.-grown cotton and away from petroleum-based synthetics, aiming to revive textile demand and rural income. Supply Chain & Manufacturing Risk: A Nippon Dynawave Packaging chemical tank rupture in Washington killed 11 after crews recovered all missing workers; officials confirmed contamination reached the Columbia River, with no negative health impacts reported so far. Global Industrial Demand: China’s May factory activity stayed flat, with orders weakening and costs rising, keeping pressure on growth. AI & Automation in Production: A Silicon Valley startup ecosystem is expanding “robot puppeteers” that train humanoids for factories and homes, reflecting how U.S. manufacturing is preparing for hands-on automation. Energy/Materials & Environment: Great Lakes reporting highlights plastic pellet pollution (“nurdles”) from petrochemical supply chains, with industry pushing for more production while downplaying risks. Defense Industrial Base: Analysts warn the U.S. may struggle to replenish depleted missile stockpiles fast enough for prolonged conflict, pointing to long lead times and constrained production capacity.