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Elm Analytics - Automotive Supply Chain Risk Digest #170 - May 8 - 14, 2020

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Automotive Supply Chain Risk Digest

May 15 · Issue #170 · View online
Weekly highlights of the events that impact supply chain risk within the automotive industry.

BANKRUPTCY
Plastic parts supplier Novares has received bankruptcy protection from the French government due to the coronavirus crisis. The company will be placed under receivership for 34 days and hopes that talks of a solution could be completed by May 28.
Arlington’s British division is laying off 600 people due to administrative restructuring. The company supplies Jaguar Land Rover, Ford, and Nissan.
CHANGE IN MANAGEMENT
Nissan North America head Jose Luis Valls is leaving his position after serving just over a year at the automaker. Nissan’s vice-chief performance officer and chief quality officer Christian Vandenhende will replace him.
EARNING DIP
Mazda has reported a 55% ($104.8m) drop in operating profit during the first quarter of 2020. Citing uncertainty amid the coronavirus crisis, the automaker withheld a forecast for the current fiscal year ending March 31, 2021.
INDUSTRY DIRECTIONS
Tesla is planning to introduce a new low-cost long-life battery in its Model 3 sedan in China later this year or early next year. The automaker expects that the new tech will bring the cost in line with gasoline vehicles. It expects the EV batteries to have second and third lives in the electric power grid.
Chinese domestic electric vehicle startups are facing difficult times. The coronavirus outbreak only added to problems finding funding and falling sales.
LITIGATION
Ford recalled around 40k cars in North America, comprising select 2020 Expeditions, Lincoln Navigators and select 2019-20 Mustangs. The automaker says the Pre-Collision Assist features in these models do not turn on.
MERGERS, VENTURES, ACQUISITIONS
Volkswagen is investing $468m into its new electric vehicle battery cell plant in Salzgitter, Germany. The plant, a JV with Northvolt AB, is slated to start production in early 2024 with an initial production capacity of 16-gigawatt hours.
PLANT DISASTER
A fire broke out at Magnesium Elektron’s magnesium alloy plant in Madison, IL, late last week. Officials said that while oil and trash burned during the incident, no magnesium was involved.
PLANT OPENING
Marelli will open a new interiors plant in Bowling Green, Ohio, in 2021. The plant will be based in a 100k sf space and create around 75 jobs for the area.
Volkswagen will restart production at its plant in Chattanooga, Tennessee, next week. Production has been suspended there since March 21.
After defying county orders early this week, Tesla has reached a deal with Alameda County to restart vehicle production at its Fremont plant this coming Monday as long as it delivers the worker safety precautions it agreed to. It is unclear if the automaker will be punished for reopening earlier this week.
PLANT SHUTDOWN
Nissan has decided to delay restarting its U.S. operations and will continue “…further evaluation of the COVID-19 pandemic, market demand, and supplier readiness before setting a restart date”.
PRODUCTION DECREASE
Toyota is reportedly planning to cut vehicle output in North America by 29% through October due to coronavirus. An unnamed source says the automaker plans to keep May production at less than 10% of last year’s levels before returning to normal levels in July.
India’s automotive industry is struggling to wring even 15% capacity out of its plants.
REGULATION
Mexico included automotive factories and transport equipment in its list of essential activities. But the planned rollout of the restart has its ambiguities.
The Wisconsin Supreme Court struck down Governor Tony Evers’ “Safer at Home” order this week, allowing all businesses in the state to reopen immediately. However, within minutes of the ruling, many municipalities issued their versions of the “Safer at Home” order.
RISK ANALYTICS
Charged interviewed Lordstown Motors CEO Steve Burns on the effort to retool GM’s shuttered factory to produce electric trucks.
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