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Elm Analytics - Automotive Supply Chain Risk Digest #162 - March 13 - 19, 2020

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Automotive Supply Chain Risk Digest

March 20 · Issue #162 · View online
Weekly highlights of the events that impact supply chain risk within the automotive industry.

CHANGE IN MANAGEMENT
Nissan CTO Tony Thomas is retiring as of March 31. He will be replaced by Yatsunobu Matoba.
Continental has named Robert Lee as its new president for North America. Lee will replace Jeff Klei, who is retiring.
GM China President Matt Tsien has been chosen as the automaker’s new CTO. He will replace Jon Lauckner, who is retiring.
EARNING DIP
BMW reported a 17% fall in operating profit for 2019 due to higher R&D spending.
INDUSTRY DIRECTIONS
Toyota has developed a new paint atomizer for its factories and claims it has the highest coating efficiency in the world at 95%. The automaker says the atomizer uses static electricity instead of air, and as a bonus, it could reduce related CO2 emissions by around 7%.
Volvo recalled several of its vehicles due to an automatic braking issue that may not detect obstacles and stop them as designed. The recall is for specific 2019 and 2020 S60, V60, S90L, and V90 models.
LITIGATION
Aluminum maker Novelis has hit a roadblock with its plans to acquire Ohio-based Aleris Corporation. A court in Ohio this week ruled that they must divest Aleris’ aluminum auto body sheet operations for the deal to go through. The US Dept. of Justice challenged the planned acquisition back in September 2019.
MERGERS, VENTURES, ACQUISITIONS
Cleveland-Cliffs completed its $1.1b acquisition of AK Steel late last week. The deal brings together the largest North American producer of iron ore pellet and AK Steel’s flat-rolled carbon, stainless and electrical steel production.
China’s BYD has established five new subsidiaries related to NEVs: Fudi Battery Co, Fudi Vision Co, Fudi Technology Co, Fudi Power Co, and Fudi Mould Co.
PLANT CLOSING
Nissan will close its plant in Indonesia in a turnaround effort to save money.
PLANT EXPANSION
Interiors supplier Hayashi Telempu is planning a $7m expansion of its plant in Jasper, Alabama, to serve the new Mazda Toyota assembly plant under construction in Huntsville.
Wheel maker Borbet is planning a $24m expansion of its plant in Auburn, Alabama.
PLANT OPENING
Interior Systems supplier Inteva Products is planning to open a new plant in Bluffton, Indiana, next year. The plant will make products such as instrument panels, door trim, and consoles.
PLANT SHUTDOWN
As the coronavirus outbreak spread through Europe and North America this past week, the automotive industry shuttered plants and halted production. We’ve compiled an ever evolving list of automotive manufacturing plants with their planned start and end dates.
A supplier parts shortage forced Ford to shut down its Chicago assembly plant temporarily. The Lear facility in Hammond, Indiana, was unable to make deliveries. Lear’s production stopped for sanitation measures when a worker tested positive for the coronavirus.
PRODUCTION DECREASE
Daimler is facing shutting down its assembly plant in Alabama due to parts shortages. The lack of needed European components has already reduced shifts for lines producing Mercedes SUVs.
PRODUCTION INCREASE
Beijing Hyundai has restarted manufacturing at its three facilities in China.
Toyota resumed normal production at its plant in Guangzhou, China, this week following a month-long closure due to coronavirus. The second shift followed, returning to production levels from before the outbreak.
Despite coronavirus disruptions, the output from China’s steel industry rose 3.1% in January and February compared to the same period last year. Steel is being pushed into inventories due to a slump in demand as a result of the coronavirus.
REGULATION
At least four cities in China are offering new subsidies and incentives for new electric vehicles. City governments are looking to increase demand and reduce the impact of the coronavirus.
France’s finance minister Bruno Le Maire has vowed that the country will support carmakers PSA and Renault during the coronavirus outbreak. Measures outlined this week include $325b in government loan guarantees and the deferral of taxes and payroll charges for those that need it.
NHTSA has proposed new safety standards that aim to differentiate standards for autonomous vehicles from those with manual controls.
RISK ANALYTICS
JD Power warns new US car sales for March could be down by as much as 41% as a result of the coronavirus. Sales levels that low haven’t been seen since the Great Recession a decade ago.
Just-auto.com is offering a free, daily briefing on the coronavirus as it relates to the auto industry.
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