AGP Executive Report

EU Tech Sovereignty: The European Commission unveiled a new “technological sovereignty” package aimed at cutting reliance on foreign tech, with proposals covering Chips Act 2.0 and a Cloud and AI Development Act to boost Europe’s semiconductor, AI and data-centre capacity. Industrial Software & Packaging: Germany’s Eplan drew 1,200 professionals to Next26 and previewed Eplan Platform 2027, while Schubert marked its 60th anniversary at interpack with new packaging-handling tech. Connected Car Security: Security experts warn that internet-linked vehicles are becoming a growing data and safety risk, with Australia’s spy agency urging officials to avoid confidential conversations in cars. Defence Manufacturing: Romania ordered 298 Rheinmetall Lynx KF41 IFVs, and Zelenskyy said Ukraine has secured a deal to speed up Patriot air-defence and missile supplies. Auto Supply Chain: Nissan is in talks to build Chery cars at its Sunderland plant, raising questions about future UK production and jobs. Repairability Pressure: A consumer group report grades major phone and laptop brands on repair access and information, pushing the right-to-repair debate into Europe. Quality & AI: A Pulse of Quality in Manufacturing survey finds most manufacturers are using or planning AI and are increasing quality investment in 2026.

Automotive Electronics Deal: Varroc Engineering and TOLYY signed a strategic pact to localise and supply digital cockpit display modules, with TOLYY providing integrated screen modules (panels, backlights, touch, enclosures, control units) and Varroc handling integration, validation and manufacturing for passenger and commercial programmes across India, Europe and North America. Industrial Investment in France: Stellantis confirmed a €1bn investment in France to develop a new platform and build three new electric or hybrid Peugeot models at Mulhouse, aiming to cut costs by 20% and strengthen competitiveness versus Chinese rivals. Services Pressure in Italy & France: Italy’s services input costs hit a 40-month high in May as Middle East conflict pressures feed into inflation, while France’s services sector contracted at the fastest pace since late 2020, with weaker demand and rising costs pushing composite activity to its lowest in 28 months. Trade & Tariffs Shock: The US proposed new forced-labour tariffs—10% on 16 partners (including the EU, UK, Canada and Mexico) and 12.5% on others—raising the stakes for European manufacturers exposed to US supply chains. Energy & Supply Chain Risk: EBRD cut Türkiye’s growth forecast for 2026/27, citing higher energy import costs, inflation and Middle East-linked disruptions to tourism and manufacturing value chains. Digital Sovereignty vs Power Demand: The EU’s draft “Cloud and AI Development Act” faces NGO pushback over data-centre electricity and water use, as Europe tries to scale AI infrastructure. Manufacturing Tech Push: Quobly raised €115m Series A to industrialise silicon-based quantum computers, targeting a first commercial system via cloud by end-2026.

Legal & Environment: Aamjiwnaang First Nation is suing Ineos over alleged benzene emissions from the company’s Sarnia plant, seeking damages for environmental harm and community impacts. Aerospace Manufacturing: Airbus has completed the first test flight of the A350-1000ULR, targeting up to 22-hour nonstop capability for Qantas, with delivery planned for April 2027. Industrial Automation: Interact Analysis forecasts collaborative robot shipments to nearly double by 2030, with 2025 shipments up 14.5% and strong multi-year growth. Cybersecurity Compliance: ONEKEY says about two-thirds of firms still aren’t ready for the EU Cyber Resilience Act, as the survey for the 2026 edition opens. Defense Industrial Base: Rheinmetall has locked in a €5.7bn Romania package for Lynx vehicles, Skyranger air defense, ammunition and naval vessels, with deliveries from 2028-2030. Energy & Power Equipment: Generac signed a global supply agreement with a hyperscale data center operator to provide backup generators after a qualification process.

AI & Semiconductors: STMicroelectronics lifted its 2026 data-center revenue target to about $1bn and now expects a potential doubling in 2027, underscoring strong AI infrastructure demand. AI Infrastructure Investment: Foxconn chair Young Liu met France’s Macron at “Choose France,” outlining new semiconductor packaging and AI infrastructure plans with Thales/Radiall and Bull. AI Data Centres Buildout: SoftBank is pushing a massive €75bn, 5GW AI data-centre push in France, while Submer launched Rubix Data Centers to develop and operate AI campuses across EMEA, the Americas and APAC. Manufacturing Growth Signal: Ireland’s manufacturing PMI hit 55.9 in May, with output and export orders rising as firms front-loaded buying amid Middle East-driven uncertainty. Energy Transition & Industry: Venturi Space will invest €250m in Toulouse to design, manufacture and assemble lunar rovers for NASA’s Artemis programme. Industrial Risk & Safety: GE Vernova’s bid to stop work on New England’s wind farm was rejected again, keeping the dispute in court. Supply Chain & Labour: UK forecasts warn unemployment could rise by 400,000+ by 2028 as higher labour costs and AI reduce entry-level hiring. Sustainability Pressure: Hungary’s EV battery boom is colliding with a worsening water crisis, raising questions for industrial scaling.

Eurozone Factory Pulse: S&P Global says Eurozone manufacturing slipped in May (51.6, down from 52.2) as Iran-war supply shocks lift costs and disrupt deliveries, with Germany stalling and France contracting. Geopolitics & Energy Costs: Markets are watching Strait of Hormuz risk as oil rises, feeding inflation pressure and tightening conditions for industry. UK-India Trade Execution: The UK is fast-tracking implementation of its India free trade deal to cut tariffs and speed market access, aiming to boost £48bn annual trade. Aerospace Procurement: India finalised a Letter of Request to France for 114 Rafale jets (Rs 3.25 lakh crore), with most aircraft planned for Indian manufacture under “Make in India”. Defence Industrial Base: France restricts Israeli offensive weapons at Eurosatory 2026, allowing only anti-air/anti-ballistic systems—raising friction in defence supply chains. Pharma Manufacturing M&A: CordenPharma will buy peptide API CDMO AmbioPharm to expand peptide capacity across Europe and North America. Food Manufacturing Capex: Barilla plans a $170m expansion at its New York pasta site, adding lines and warehouse capacity. Industrial Skills: A push for TVET and artisanal training in South Africa argues Europe will also face artisan shortages.

Manufacturing Pulse (France & Spain): France’s manufacturing PMI fell to 49.7 in May, its first contraction since November, as energy-price spikes and Middle East-linked transport disruptions hit supply chains. Spain’s PMI also eased to 51.2, with worsening supply delays, higher input costs and weaker new orders weighing on demand. AI Infrastructure Push (France): SoftBank pledged up to €75bn to build 5GW of AI data-centre capacity in France, including a Dunkirk hub with Schneider Electric, aiming to strengthen Europe’s “sovereign AI” supply chain. Industrial Security (Europe): A wave of arrests and intelligence alerts across Europe points to a coordinated China-linked espionage effort targeting universities, tech firms and political circles. Defence Manufacturing (South Korea): An explosion at Hanwha Aerospace’s Daejeon plant killed five people, underscoring risks in advanced weapons and R&D production. Procurement & Capacity (EU supply chain): Bull and Foxconn plan to manufacture AI and cloud infrastructure across Europe, leveraging Bull’s Angers site and Foxconn’s Pardubice factories. Trade & Markets: Oil and the dollar firmed as US-Iran deal talks stayed elusive, while European stocks opened muted amid rate and energy uncertainty.

Aviation Fuel Shift: Germany’s Ineratec is producing electro-Sustainable Aviation Fuel at a Frankfurt plant, using hydrogen and CO2 from nearby industrial sources, as the Iran war pushes Europe to rethink jet-fuel dependencies and accelerate e-SAF blending targets. AI Infrastructure Push: SoftBank plans up to €75bn to build 5 GW of AI data-centre capacity in France, starting with €45bn for 3.1 GW in Hauts-de-France, with Schneider Electric flagged for Dunkirk and a broader “sovereign AI” agenda. Energy Transition at Scale: GE Vernova hit a 25 GW wind manufacturing milestone at its Salzbergen site, underscoring Germany’s role in scaling turbine supply chains for Europe’s decarbonisation. Industrial Pressure in Germany: New reporting says Germany has already lost 341,000 manufacturing jobs since 2019, with industry warning more could be at risk as costs and competition bite. EU Trade Friction: Brussels is weighing emergency steps on the Russian oil price cap after Iran-linked market swings could force the cap sharply higher, risking a windfall. Ukraine Air-Defence Supply: Zelenskyy says Ukraine received another IRIS-T launcher from Germany and warns of a major Russian attack, while also pushing for more interceptors and manufacturing capacity. Defence Manufacturing Link: Germany’s Diehl Defense manufactures IRIS-T systems, tying European industrial output directly to battlefield air-defence needs.

EU–China Policy Rift: Germany and Spain are pushing back on EU plans to restrict Chinese tech suppliers for telecom networks, underlining a wider split between pragmatic trade ties and political “securitization.” Sanctions & Industry Fallout: Ireland’s Aughinish Alumina—owned by Rusal—has reportedly shipped most alumina to Russia (83% in Q1 2026), challenging Dublin’s case that EU sanctions would hurt Europe more than Moscow. Defense Manufacturing Push: India’s Navy chief says Project 75(I) will field the first AIP-equipped submarine by 2033, with technology transfer and domestic build; separately, Ukraine is aligning sanctions with EU decisions targeting Russian and linked firms in defense-linked sectors. Mobility & Rail Capacity: Alstom’s SNCF TGV M is set to increase second-class seating (up to 740 in some configurations) by reshaping onboard equipment. Solar Supply Chain: DMEGC Solar will showcase higher-power INFINITY RT 3.0 modules at Intersolar Europe 2026, citing efficiency gains from advanced encapsulation. Industrial Automation Showcase: A Tianjin expo highlights embodied AI and humanoid robotics as manufacturing accelerators, with hundreds of international firms attending.

EU Tech Sovereignty: Brussels is preparing far-reaching rules to cut reliance on US cloud and Chinese chips, aiming to protect critical digital infrastructure and reduce “kill switch” fears—raising the risk of fresh transatlantic friction. Modular Construction Push: Irish AI-native EcoModular signed a deal with IDS (Riyadh) and Latvian consultancy Modul Consult to scale modular building projects via joint go-to-market and fee-bearing delivery. Offshore Wind Pipeline: TotalEnergies filed for a 1.5 GW offshore wind farm off Normandy, with a €4.5bn price tag and plans to involve European turbine and cable suppliers. Sanctions Fallout Watch: Ireland and EU policymakers are clashing over whether to tighten sanctions on Russian-owned Aughinish Alumina, after claims it could indirectly feed Russia’s war industry. Automotive Platform Deal: Stellantis confirmed a Tata Motors platform for a new Jeep SUV in India for global markets, targeting a 2028 launch and likely using Tata’s ARGOS architecture. Air Freight Demand: IATA reports global air cargo demand up 4% YoY in April, despite weaker Middle East performance and ongoing Gulf disruption. Food Manufacturing Materials: UK firm Invicta launched PFAS-free industrial bakeware coatings, positioning it as a near-term alternative for food manufacturers facing PFAS scrutiny.

EU-China Trade Tensions: EU leaders are weighing tariffs and other measures against Chinese imports, with warnings that “existential” dumping could cost 29 million EU jobs—especially in EVs—while Beijing signals it will retaliate. Industrial Policy & Critical Inputs: Ireland’s Taoiseach says sanctions on Russian-owned Aughinish Alumina would be “self-defeating,” arguing it’s critical raw material for European smelters and could damage jobs and the electricity grid. Defense Tech & Supply Chains: ZenaTech says it will pursue U.S. Department of War opportunities for NDAA-compliant drone production, while reporting also highlights Russia’s Rubicon drone unit and Ukraine’s push to intensify legal pressure tied to wartime energy-sector alleged fraud. Manufacturing Security: ONEKEY offers a platform to map device cryptography to prepare manufacturers for post-quantum security. UK Manufacturing-Adjacent Signals: Germany’s unemployment fell in May, but hiring remains cautious, with manufacturing still under pressure. Site Regeneration: Birmingham’s former MG Rover Longbridge plant is moving into a new construction phase for industrial and logistics units, aiming to revive local jobs.

Critical Minerals & Geopolitics: Viridis Mining says it will bar Chinese buyers from its Colossus rare-earth project in Brazil, targeting Europe and North America instead—an explicit bid to reduce China’s dominance in refining and processing. EU Industrial Policy: The FT reports the EU is drafting emergency powers to intervene in semiconductor supply chains during shortages, including forcing chipmakers to override contracts, alongside common purchasing to boost bargaining power. AI Infrastructure for Industry: Omdia frames “AI Factory” data centres as intelligence-production infrastructure, while TCS and Mistral team up to deploy enterprise AI models across manufacturing and other sectors in Europe and the UK. Energy & Manufacturing Costs: The ECB warns the Iran-war shock is hitting euro-zone consumers faster and more deeply than prior crises, raising risks for demand and industrial recovery. Trade & Supply Chains: Turkey’s apparel exporters are shifting toward Eastern Europe as EU demand softens, with exports to Germany and Italy down sharply. Circular Materials: Loop Industries signs an MoU for its first commercial recycled PET plant in India, aiming to scale sustainable packaging in Gujarat.

EU Chips Push: Brussels is reportedly weighing a jump to €120bn to boost local chip production, after the Chips Act’s original €43bn target proved too small for the goal of doubling Europe’s share to 20% by 2030. Digital Enforcement: The European Commission hit Temu with a record €200m DSA fine over unsafe and illegal product sales, spotlighting compliance pressure on cross-border e-commerce. Defense Industrial Base: Belgium began F-35A horizontal tail section production at Sonaca in Gosselies, aiming for 150 skilled jobs by 2035 and feeding final assembly in Italy and the US. Ukraine Air Power: Ukraine plans to buy up to 20 Swedish Gripen E/F jets using an EU loan, with Sweden also set to transfer 16 C/D aircraft and long-range systems. Supply Chain Security: Sandoz filed an EU anti-dumping complaint on Chinese amoxicillin imports, warning Europe could lose antibiotic manufacturing capacity. Manufacturing Materials & Energy: A WEF outlook flags Hormuz disruption as a threat to energy and fertilizer flows, with inflation risks feeding into industrial costs across Europe. Industrial Logistics & Mobility: A German defense logistics firm is scouting Amarillo for US operations, reflecting how European defense supply chains are looking for new production and logistics footprints.

Energy Transition Policy: Germany’s coalition is trying to soften its heating law, cutting the renewable requirement for new systems to 10% and extending allowances for oil and gas in existing buildings, with critics warning the timetable is unrealistic. Industrial Power & Automation: Schneider Electric opened a net-zero carbon smart factory in Hungary to expand European switchgear output, using digital energy optimisation and rooftop solar. EV Market Signals: Türkiye jumped to Europe’s fourth-largest electric car market in Jan–Apr 2026, with one in four EVs sold there being a Togg model, despite limited incentives. Materials Under Pressure: Germany’s aluminium industry remains weak, with production still down and most firms doubting conditions will improve by end-2026. Manufacturing Restructuring: Saint-Gobain’s SEFPRO plant in Falconer will end a product line, cutting 79 jobs, while keeping other lines running. Tech & Supply Chain: X-Fab shares surged after a social media post highlighted the chipmaker, triggering a retail trading frenzy; the company said it’s unaware of any undisclosed material developments. Quality & Testing: Ipsos launched Product Studio, aiming to speed up product testing using AI and consumer data across multiple European markets.

Defence Industrial Base: The UK and Poland signed a new defence pact to jointly develop and manufacture “next-generation complex weapons,” with plans to boost uncrewed systems and industrial cooperation as Russia’s threat grows. Air Defence Demand: Ukraine’s Zelensky asked the US and Congress for more Patriot PAC-3 missiles and air-defence ammunition, warning deliveries are falling short as Russia intensifies ballistic and drone strikes. Baltic Security & Civil Preparedness: Fears of a Russian incursion rose after drones were spotted over Estonia, Lithuania and Latvia; the Baltic states are turning to Ukraine for shelter-building know-how and drone-incursion strategies. AI Infrastructure Procurement: Verda selected Supermicro’s NVIDIA GPU-accelerated rack systems to power its AI cloud infrastructure across Europe, the US and Asia, underlining continued European demand for scalable AI compute. Power & Energy Storage Expansion: Socomec will open a new electrical components and energy-storage facility in Georgia, creating about 300 jobs—another sign of European industrial firms scaling production capacity abroad. Manufacturing Supply Chain Deal: Jupiter Tatravagonka Railwheel Factory signed a 10-year supply agreement to provide rail wheels, axles and wheelsets to European wagon maker Tatravagonka, with exports planned from its Odisha plant. Medical Tech Scale-Up: ReVision Implant raised €4mn to expand cleanroom and manufacturing processes ahead of human trials for a cortical visual prosthesis.

Drug-Price Politics: A fresh German push to cap medicine spending is framed as cost-cutting, but the argument is that it simply shifts the bill to the US—where patients bankroll much of global pharma R&D—raising new pressure for reciprocity. China Business Mood: EU firms in China report tentative improvement in profitability and growth outlook, yet confidence stays fragile amid tougher competition, regulatory uncertainty, and market access barriers (with autos still hit by price wars). Auto Industry Shift: Europe’s April car market kept growing on electrified demand, while Chinese brands gained share—export momentum rose again in April, despite tariffs. Industrial Energy & Resilience: Solid-oxide electrolysis moves toward real deployment, while Tallinn backs energy-independent smart bus stops and UK businesses are urged to plan for heat disruptions. Biotech & Manufacturing: Precision BioSciences presented ELIMINATE-B clinical data on cccDNA elimination/inactivation; Pacifico Biolabs raised €7m to scale alternative-protein production in Germany. Defense Demand: Elbit secured a ~$1.4b European modernization contract and pushed backlog past €30b.

Electric Vehicle Shake-up: Ferrari unveiled its first fully electric model, the Luce, but the launch didn’t land with investors—Ferrari shares slid about 6% in Milan after the Rome reveal. Auto Industry Signals: Lotus also dropped its EV-only plan, switching to a multi-powertrain strategy with a 1,000+hp hybrid teaser, underscoring how regulation and demand are reshaping European electrification timelines. Defense Manufacturing Push: The US Army showed designs for the XM30 infantry fighting vehicle to replace the Bradley, with General Dynamics’ Wolf and Rheinmetall’s Lynx competing for the program. Industrial Resilience in Focus: A Merseyside car-parts maker, Surface Transforms, was sold out of administration and plans to restart ceramic brake disc production—after job losses tied to losing a major customer. Digital Sovereignty: The Netherlands blocked Kyndryl’s acquisition of Solvinity, the cloud provider behind DigiD, marking the first full prohibition of a US deal by its investment screening bureau. Energy & Supply Chains: Ukraine said a May 21 drone strike forced Russia’s Syzran oil refinery to halt operations, adding pressure to already volatile logistics and energy flows.