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Elm Analytics - Automotive Supply Chain Risk Digest #147 - November 29 - December 5, 2019

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Automotive Supply Chain Risk Digest

December 6 · Issue #147 · View online
Weekly highlights of the events that impact supply chain risk within the automotive industry.

BANKRUPTCY
Filtration Services Group (FSG) received a stalking horse offer to buy the company. FSG filed for Chapter 11 in Aug 2019 and supplies GM with air filters.
CHANGE IN MANAGEMENT
Current executive VP and chief engineer for Lexus Koji Sato will become the new president of the automaker starting on Jan 1, 2020. Sato will replace Yoshihiro Sawa and will also retain his title as chief engineer.
The UAW’s executive board has voted to make current acting president Rory Gamble the new president of the union. He will serve the remainder of former President Gary Jones’ term, which runs through June 2022.
HUMAN CAPITAL
GM will layoff 814 hourly and salaried workers at its Detroit-Hamtramck plant starting on Feb. 28, 2020. The 753 affected UAW-represented employees will be offered buyouts or jobs at other GM facilities as the Detroit-Hamtramck plant gets retooled for building EVs.
INDUSTRY DIRECTIONS
Daimler has started pilot testing self-driving Mercedes taxis in California to gather user feedback. These tests will be the first time that occupants who are not employed by the automaker will ride in the vehicles.
LABOR DISPUTE
FCA reached a tentative labor agreement with the UAW earlier this week, becoming the last of the big three to arrive at a deal with the union this year. The four-year deal secures a total of $9b in investments involving 7.9k jobs.
LITIGATION
German authorities have raided Volkswagen offices once again in relation to the diesel emissions scandal. The authorities didn’t comment on the details, but VW said it is regarding an investigation into their EA 288 model engine.
The Trump administration is asking a federal judge to toss California’s lawsuit seeking to preserve its power to regulate tailpipe emissions. In court papers, the administration claimed that California’s regulation contravened the NHTSA’s authority to set uniform standards for the nation.
Takata is recalling an additional 1.4m airbags as part of the most massive auto recall ever over a defect that caused the death of a BMW driver and two other injuries in overseas markets. The recall covers parts made from 1995-1999 and sold to BMW, VW, Audi, Toyota, Honda, and Mitsubishi.
Detroit Free Press: Ford workers say “everybody knew” about faulty transmissions on the Focus and Fiesta.
MERGERS, VENTURES, ACQUISITIONS
General Motors is teaming with South Korea’s LG Chem to build a $2.3b EV battery cell plant in Lordstown, Ohio. Construction on the plant will begin in mid-2020, will employ more than 1.1k people, and have an annual production capacity of more than 30 gigawatt-hours.
Germany’s Hübner is selling its plastic injection molding business to Gotec, a coating supplier in Wülfrath. Hübner, based in Kassel, produces body parts, car key shells, keypads, and accelerator pedals.
PLANT CLOSING
Barre, Vermont’s SB Electronics is out of money and closed its doors this week. The company manufactured specialized capacitors for electric vehicles. They initially supplied the Tesla Model S but was replaced by Panasonic when the two formed a joint venture. The current leadership at SBE will launch a new company with the patented technology and says they are in talks with Rivian.
PLANT EXPANSION
BMW is investing $444m into its Dingolfing plant in Germany to prepare for the production of electric vehicles. The first new model will be the BMW iNEXT in 2021.
PLANT OPENING
Bosch broke ground on a fuel cell battery development center in Wuxi, China, last week. The center is set to start operation in 2021 and will be Bosch’s first outside of Germany.
EV startup Lucid Motors broke ground on its new plant in Casa Verde, Arizona, this week. The start of production is planned for late 2020, and it is said to result in around 4.8k direct and indirect jobs by 2029.
France’s Sealynx has opened a new automotive gasket factory in Tangier, Morocco.
Yangfeng Automotive Interiors opened its new plant in Kragujevac, Serbia, this week. The facility will produce interior door trim components.
PRODUCTION DECREASE
Thailand’s vehicle production levels have plunged 22.5% year over year.
REGULATION
China’s Ministry of Industry and Information Technology revealed a draft proposal targeting NEVs at 25% of all vehicle sales. However, the increase from the 20% target set in 2017 will be steep. Government subsidies have been reduced to almost half of their levels held in 2018.
RISK ANALYTICS
How do you fix the due diligence process when assessing supplier risk? Better information: more quality over less quantity.
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