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Elm Analytics - Automotive Supply Chain Risk Digest #130 - August 2 - 8, 2019

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Automotive Supply Chain Risk Digest

August 9 · Issue #130 · View online
Weekly highlights of the events that impact supply chain risk within the automotive industry.

EARNING DIP
Continental AG’s 2019Q2 net profit fell 41%. Technology investments and a drop in Chinese demand have the largest European auto supplier looking for deep cuts.
HUMAN CAPITAL
India’s automotive sector is facing a huge downturn that is triggering massive job cuts. One senior industry source told Reuters that it is estimated that automakers, part manufacturers and dealers have laid off about 350,000 workers since April.
INDUSTRY DIRECTIONS
Lindsay Chappell’s macro trends from 2019 CAR Management Briefing Seminars:
  1. Supply chains have to get leaner to save money
  2. Automotive companies are rushing to artificial intelligence
  3. Material Advances are pushing lightweighting
Japanese electronics supplier NEC Corp. tested a “flying car” in a Tokyo suburb this week that went 10ft up for about a minute. The Japanese government is supporting flying cars and hopes to have them in use by the 2030s.
Battery-powered electric vehicles are expected to become less expensive than combustion by 2028.
LITIGATION
Audi is recalling over 144,000 cars in the US over a faulty passenger-side airbag that may not inflate in a crash. The recall covers 2017-2018 A4 sedans and A5 coupes and some of its variants.
Ford has agreed to a $17m settlement in a lawsuit brought by owners of vehicles with MyFordTouch and MyLincolnTouch infotainment software. The suit was filed on behalf of owners angry above the system’s lack of functionality.
The judge overseeing a class-action lawsuit against GM regarding faulty ignition switches has decided to narrow claims by owners who said their vehicles lost value due to the defect. GM is happy with the decision and says it dismissed the owners’ largest remaining claim.
Kia is recalling over 11k 2019 Optima sedans over defective emergency braking software that may fail to recognize that the car is stationary. The recall covers Optimas with either a 1.6L or 2.0L turbo-4 engine built between May 21 and May 29, 2019.
MERGERS, VENTURES, ACQUISITIONS
Electrify America and EV fleet charging company Stable Auto are teaming up to deploy robotic charging solutions for self-driving vehicles. The solution is designed to charge autonomous EVs without human intervention using robotics attached to a 150kW DC fast charger.
PLANT OPENING
German supplier ATN Hoelzel LP is investing $6m into a new facility in Chattanooga, Tennessee. The company will move its current manufacturing operations to the new space and turn the original facility into office space for their HQ.
Italy’s Athena-SCE will open a new plant in Mount Pleasant, Tennessee. The company produces gaskets and automotive seals.
India’s Mahindra plans to build a $1B plant in Flint, Michigan on the former Buick facility site. The facility would produce a compact crossover and commercial van. More production space is needed, and the nearby Auburn Hills plant is out of capacity. The deal may depend on securing a contract with the US postal service.
PRODUCTION DECREASE
Honda is dropping a shift that produces the Accord at its plant in Marysville, Ohio, as well as decreasing production of three other slow-selling models made at the plant. The production decrease reflects the continuing falling sales of passenger cars in the US.
Dwindling North American sales have GM slowing production. The third shift in San Luis Potosi, Mexico, will be cut next week. The CAMI plant in Ontario, Canada, will shut down for the last week in September.
RAW MATERIALS
Class-one nickel’s demand will be higher than the supply within five years. Electric vehicle batteries and lack of investment in new mines have caused prices to spike.
REGULATION
The US Treasury Department has officially named China a currency manipulator amidst continuing trade talks. The move is likely to increase tensions and may make a trade deal more difficult to achieve.
RISK ANALYTICS
“People ask me when the trade war will end. It’s not a trade war – it goes much deeper. We are going to be at it for 10-20 years with China.”
- Michael Dunne, CEO ZoZo Go
2019 CAR Management Briefing Seminars
Honda is dropping a shift that produces the Accord at its plant in Marysville, Ohio, as well as decreasing production of three other slow-selling models made at the plant. The production decrease reflects the continuing falling sales of passenger cars in the US.
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