View profile

Elm Analytics - Automotive Supply Chain Risk Digest #137 - September 20 - 26, 2019


Automotive Supply Chain Risk Digest

September 27 · Issue #137 · View online
Weekly highlights of the events that impact supply chain risk within the automotive industry.

Volkswagen has named former Cadillac President Johan de Nysschen as its new COO for North America. De Nysschen previously spent 20 years at Volkswagen before taking roles with Infiniti and Cadillac.
Chinese EV maker NIO is struggling to survive after reporting a loss of $369m in the second quarter. The loss puts the automaker’s accumulated losses to around $5.7b since its founding in 2014.
Around 3,900 workers in Southern Ontario’s auto sector were temporarily laid off last week as the UAW strike against GM continues. The layoffs include 2,000 hourly workers at GM’s Oshawa, Ontario plant and another 1,700 unionized employees at suppliers that serve the plant.
With the mass deployment of autonomous vehicles taking longer than some expected, many smaller self-driving companies are pivoting to alternative uses for their tech.
Automotive cybersecurity mandates will need to be balanced with the supplier cost burden.
The Detroit Free Press reports that the UAW and GM are far apart on several key issues. The strike is expected to last two weeks longer if UAW members picket until GM ratifies the deal. Anderson Economic Group says that GM probably has lost profits of $113m so far, and is now losing $25m a day. UAW members and effected supplier workers are estimated to have lost $266m in wages.
The 13-day Unifor strike at the Nemak Windsor Aluminum plant over a planned factory closing ended Sunday with a “negotiated agreement.” Unifor and Nemak will meet October 2-4 and if unresolved will go to binding arbitration.
California, along with 22 other states, is seeking a court order from a U.S. District Court in Washington, D.C. to stop the Department of Transportation’s move to block California’s authority on setting emissions standards. The DOT nor the White House have offered comment on the legal challenge.
NHTSA is investigating complaints of steering problems and frame weld deficiencies in some 2018 and 2019 Jeep Wranglers. The agency has received more than 3,500 customer complaints regarding the issues.
The SEC is fining Nissan and its ex-CEO Carlos Ghosn $15m and $1m, respectively, for filing false financial disclosures related to Ghosn’s compensation. Ghosn will face a 10-year ban from serving as an officer or director of a publicly-traded US company.
Nissan is recalling 1.36m vehicles in Canada, the US, South Korea, and Israel over noncompliant rear visibility camera display systems. A defect allows drivers to adjust the camera “to the degree that the image is no longer visible”.
Amazon has announced that they will purchase 100k electric trucks from startup automaker Rivian. To date, Rivian has yet to build any vehicles.
Toyota is partnering with Chinese automakers Guangzhou Automobile and FAW to build hydrogen fuel-cell cars. Toyota sold 1.5m vehicles in China last year but is working to increase sales to 2m per year.
German auto supplier Continental has announced that it will close its plant in Fletcher, North Carolina by the end of 2022. The closure will result in a loss of 650 jobs.
Michelin will close its tire production plant in Hallstadt, Germany by early 2021. The plant has the capacity for 8m tires/year, but demand has declined for the 16-inch passenger car tires produced there.
Spain’s Array Plàstics has opened a plant in Querétaro, Mexico. The 62k sq ft injection molding facility will produce indicator lights, courtesy lights, engine parts, and internal roof and mirror components.
VW is in final talks with Turkey on building a new plant in Manisa. The factory is slated to produce 300k vehicles/year starting in 2022.
To mitigate potential disruption from a no-deal Brexit, Jaguar Land Rover will halt production at four British factories for a week in November.
For the first time in 15 months, British car production has increased. The 3.3% rise in August is being attributed to the increase in production at several key factories after having moved forward a planned shutdown in preparation for Brexit.
Prime Minister Abe and President Trump signed a trade agreement, removing the threat of auto tariffs on Japan. Japan will eliminate or reduce import duties on $7.2b of US food and agricultural products. The US will keep in place an existing 2.5% tariff on cars and light trucks.
The European Union’s trade commissioner pledges to retaliate if the US imposes new tariffs on cars and auto parts set for November. “We firmly reject that we are a security threat,” Malmstrom told a conference in Brussels on Friday. “That is absurd. If there will be tariffs there, we would take countermeasures.”
With steel stocks falling and more steelmakers announcing layoffs and closings, President Trump’s steel tariffs may be doing more harm than good.
Did you enjoy this issue?
If you don't want these updates anymore, please unsubscribe here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue
Elm Analytics, LLC - 280 Mill Street, Suite A, Rochester, Michigan 48307 USA