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Elm Analytics - Automotive Supply Chain Risk Digest #271 - April 15 - 21, 2022


Automotive Supply Chain Risk Digest

April 22 · Issue #271 · View online

Weekly highlights of the events that impact supply chain risk within the automotive industry.

BMW has pledged not to cut a single job during the transition from gas vehicles to EVs.
Center for Automotive Research: Ukraine and “The Fog of War”
SNITIS, an independent Mexican union, asked the US to investigate worker rights abuses at Panasonic’s Reynosa plants. The petition says a contract signed with a rival union violates the USMCA.
Toyota is investing $383M across four US plants to prepare for the production of a new four-cylinder engine variant for traditional and hybrid powertrains. The automaker did not provide details about the new engine.
GM entered into a supply agreement with MP Materials Corp for alloy and magnets used in EV motors.
Schaeffler has signed a “first of its kind” deal with Norway’s REEtec to secure a supply of rare earth magnets from 2024. The agreement ensures that Schaeffler will have a local, European supply chain for the raw materials.
A new JV between Stellantis and LG will see the construction of a new $3.96B EV battery plant in Windsor, Ontario, Canada. The 4.5M sf plant will employ around 3.2k people and create a new supply chain and thousands of jobs at its suppliers.
Gwangju Global Motors opened the first new auto plant in South Korea in 23 years. The fledgling automaker will specialize in the contract manufacturing of small cars, starting with the Hyundai Casper.
An LG/Magna JV plans to build a new EV parts plant in Ramos Arizpe, Mexico. The plant, scheduled to be completed in 2023, will be its first in North America.
Automakers in Shanghai such as Tesla, Volkswagen, and SAIC Motor are preparing to re-open their plants as the city aims to ease COVID restrictions there. Many workers will still need to live on-site at the plants to meet regulations.
Honda is expanding production cuts at its Suzuka and Saitama plants in Japan. The company cites chip shortages, parts delays, and COVID-19 lockdowns but expects production to return to normal in May.
Quarterly semiconductor production in China shrunk for the first time since early 2019 in Q1 2022. Output dropped by 4.2% for the Jan-March period.
Continental restarted its Kaluga tire plant in Russia to protect local workers. Russian prosecutors warned companies that their employees could face arrest if they shut down the production of essential goods.
Ford recalled over 650k pickup trucks and SUVs due to windshield wipers that can break and fail. The recall covers several F-series trucks from 2020 to 2022 and Expedition and Lincoln Navigator SUVs from the 2020 and 2021 model years.
Toyota recalled 458k vehicles due to a software error in the vehicle stability control system. The recall affects several Toyota and Lexus models from 2020 to 2022.
Chinese officials issued new guidelines to help logistics and supply chain disruptions caused by Shanghai’s nearly month-long COVID lockdown.
Stellantis is suspending production at its van assembly plant in Kaluga, Russia, due to logistical issues and sanctions on Moscow. The automaker added that they had frozen plans for more investments in the country.
Automotive World: Are supply chains too lean?
Rivian’s CEO, RJ Scaringe, warns EV battery supply chain issues will dwarf the chip crisis.
“Put very simply, all the world’s cell production combined represents well under 10% of what we will need in 10 years. Meaning, 90% to 95% of the supply chain does not exist.”
Expedited shipping lane use has grown significantly at ports. Continued congestion has these services “way over-subscribed” as companies attempt to mitigate disruptions.
Lockdowns in Shanghai have reduced shipments easing pent up supply chain issues. When restrictions ease, analysts expect high volumes to create another backlog at ports.
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