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Elm Analytics - Automotive Supply Chain Risk Digest #175 - June 12 - 18, 2020


Automotive Supply Chain Risk Digest

June 19 · Issue #175 · View online
Weekly highlights of the events that impact supply chain risk within the automotive industry.

DGH-Group has filed for insolvency. The German aluminum and magnesium die caster has begun reorganization.
Mitsubishi Motors’ executives are cutting their pay as part of a cost-cutting measure amid lost sales.
As part of its ongoing cost-cutting measures, Renault will cut up to 2.1k plant jobs and 1.5k engineering jobs in France. Renault recently announced plans to eliminate 15k positions worldwide.
The National Highway Traffic and Safety Administration unveiled a voluntary effort to collect and share nationwide data on existing autonomous vehicle testing. The goal is to create “…a formal platform for federal, state, local governments and the industry stakeholders to coordinate and share information in a standard way”.
As a response to the automaker closing down its Lordstown plant last year, the state of Ohio informed General Motors that it might be forced to repay over $60M in public subsidies it received. State officials say the closing violated the terms of two state economic development agreements that GM signed over a decade ago.
Tesla is facing significant quality problems with its new Model Y severe enough that some customers are rejecting the delivery of their vehicles. The issues reportedly range from defects in the paint to seats and trim.
FCA has won its case against Mahindra & Mahindra over infringement of the design of the Jeep Wrangler. The International Trade Commission upheld a judge’s finding that Mahindra’s Roxor is a copy of the Jeep and ordered a block on the vehicle’s import to the US market.
Volkswagen will pay $267M to buy out the remaining minority shareholders of its Audi division. The automaker already holds 99.64% of the subsidiary.
EV startup Lordstown Motors is partnering with Hydra Design Labs to design and build the “world’s first” electric pickup truck out of GM’s former assembly plant in Lordstown, Ohio. Production will begin in late 2020, with deliveries starting in the first quarter of 2021.
PSA and Dongfeng have extended their joint venture contract by ten years to 2037 to “ease concerns about the future of the partnership.”
An explosion occurred at Honda’s plant in Suzuka, Japan, and injured two employees early this week. The blast happened near an electrical power distribution board at the facility.
Spain’s Alcorta Forging Group will open its first North American production facility in Marysville, Ohio. The 150k sq ft plant will produce body, engine, powertrain, and exhaust systems.
Automakers and UAW officials say that while some auto plants were briefly shut down again for disinfection, there has not been a major COVID-19 outbreak since most plants re-opened on May 18.
The death of a South Korean worker at a parts supplier led to the halting of some Hyundai production lines in South Korea. The worker died late last week after getting stuck in machinery at Duckyang Industry Co.
Additional production lines were suspended due to related parts supply problems shipping to the same plant in Ulsan three days later.
Last Friday, the Governor of Puebla signed a decree stating that it was not ready to open the automotive sector due to coronavirus concerns. Volkswagen began sending workers back to its plant Tuesday for “preparation and training, eyeing a gradual start further ahead.” Both VW and Audi have large plants in Puebla, Mexico.
FCA canceled the planned summer shutdown at its assembly plant in Brampton, Ontario, Canada, “to meet strong consumer demand.” The only FCA plants that will have traditional summer shutdowns lasting 1-2 weeks are the Warren Truck, Belvidere Assembly, Windsor Assembly, and Toluca Assembly plants.
Hungary is looking to support its Audi plant in Gyor financially. Prime Minister Viktor Orban wants to have its nearly 13k workers run the plant at full capacity.
Spain has unveiled a $4.2B auto industry aid package to promote the production and sale of cleaner cars. The funds will be disbursed by 2022 and will include money from European recovery funds.
The French Government is setting up a new agency that monitors vehicles sold in France for emissions fraud. The Surveillance Service for the Vehicle and Motor Market (SSMVM) will start with an initial budget of $5.6M and will be expected to carry out nearly 100 tests a year.
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