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Elm Analytics - Automotive Supply Chain Risk Digest #128 - July 19 - 25, 2019

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Automotive Supply Chain Risk Digest

July 26 · Issue #128 · View online
Weekly highlights of the events that impact supply chain risk within the automotive industry.

CHANGE IN MANAGEMENT
BMW has announced that current production chief Oliver Zipse will take over as the automaker’s new CEO on August 16. Zipse will take over the position from current CEO Harold Krueger.
HUMAN CAPITAL
In the wake of falling profits and vehicle sales, Nissan has announced that it will cut 12,500 jobs or about 9% of its global workforce. Nissan chief executive Hiroto Saikawa said most of the cuts would be assembly plant workers.
Ford has announced that it will lay off around 200 employees at its assembly plant in Oakville, Ontario, Canada in September. The automaker attributes the layoffs to slowing sales of the Ford Flex and Lincoln MKT, both of which are produced in Oakville.
INDUSTRY DIRECTIONS
77% of procurement and finance professionals expect a recession within two years. 30% said they are mostly or completely unprepared for one if it occurs.
Technology advances have hydrogen fuel cell vehicles aggressively competing against battery electric vehicles.
LABOR DISPUTE
Kristin Dziczek of the Center for Automotive Research outlines the process of negotiations between the UAW and FCA, Ford, and GM.
LITIGATION
Volvo is recalling 507,000 vehicles worldwide over a faulty engine component that could cause a fire. The automaker says that an internal investigation revealed that “…in very rare cases the plastic engine intake manifold may melt and deform”.
A new class-action lawsuit filed against Ford alleges that the automaker falsified advertised fuel economy numbers for its 2018-2019 F-150 trucks. Steve Berman, the managing partner of the law firm that filed the suit, says that “F-150 owners are paying more than $2,000 more for fuel” over the vehicle’s lifetime.
MERGERS, VENTURES, ACQUISITIONS
Toyota is partnering with Chinese automaker BYD to develop Evs in China. The vehicles will be sedans and low-floor SUVs and will sell under the Toyota brand name starting in 2020.
BMW has signed an agreement with China’s Tencent to build an IT platform for developing Level 3 and Level 4 automated driving technologies. The platform is expected to be ready to use by the end of the year.
Germany’s RIBE and Chicago’s Maclean-Fogg have entered a joint venture. Aluform USA will produce aluminum fasteners in Chesterfield, Michigan.
Toyota is investing $600m into Chinese ride-sharing company Didi Chuxing. They are also forming a new joint venture for developing connected and electric vehicle technologies in China.
Chinese automaker BAIC has purchased a 5% stake in Daimler. Daimler has welcomed the investment and said it would “…strengthen the cooperation between BAIC and Daimler”.
PLANT EXPANSION
Ford is investing $50m to add a new production line and 450 new full-time jobs at a facility near its Torrence Ave assembly plant in Chicago, Illinois. The new line will build a hybrid version of the Ford Explorer and Lincoln Aviator.
Italy’s 2A will expand its Auburn, Alabama plant. 2A die-casts aluminum components.
BMW is planning to double its battery production in the US by adding a new assembly line at its plant in Spartanburg, South Carolina. The automaker will invest $10m and add 120 jobs for the new production line.
PLANT OPENING
Japanese transmission maker AW Texas Inc. is investing $400m into a new plant in Cibolo, Texas. The 500,000sf facility will employ around 900 workers.
LG Chem is investing $424m into a new factory in South Korea for producing cathode material for lithium-ion batteries. The plant is expected to start production in late 2022.
REGULATION
In a rebuttal to President Trump’s emissions rollback plans, Ford, Volkswagen, Honda, and BMW have signed a deal with the state of California to increase fuel economy and reduce emissions of their new vehicle fleets through 2026.
SUPPLY CHAIN
SupplyChain247 covers the coming technology changes in automotive materials handling.
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