Change In Management
According to reports, Kjell Gruner, a former Porsche top executive, will join Rivian. With his marketing, operations, and strategy expertise, Gruner's skills could prove valuable to the EV startup. Gruner and Rivian have yet to confirm this news. During his tenure at Porsche, Gruner successfully managed the US business and achieved impressive sales figures.
Ford Next CEO Franck Dominique Louis-Victor was arrested on charges of arson and assault with a dangerous weapon. According to authorities, he was involved in a domestic violence altercation and, during the dispute, tried to set two $10k handbags on fire.
Closing
Autoliv is taking cost-cutting measures by closing factories in Elmshorn, Germany, and Congleton, Britain. The goal is to simplify operations, reduce costs, and eliminate 11% of the workforce. The company will eliminate 1.1k positions initially out of a planned 8k. Like other auto suppliers, Autoliv faces challenges due to high inflation and a weak global economy.
Expanding
Kia will expand its West Point, Georgia, plant to build its first North American-produced EV. The company will invest $200M, adding 200 additional workers.
Human Capital
A Mitsubishi JV with GAC in China is cutting staff following a decline in SUV sales. GAC stated that they would optimize employment and restructure according to Chinese laws. Foreign automakers are under pressure due to price cuts from Chinese EV brands.
Labor
UAW President Shawn Fain is leading an aggressive challenge to the labor status quo at The Big Three. Fain aims to reverse wage and benefit concessions, prevent plant closures, and eliminate a tiered compensation system that pays new hires less than veteran workers. He is employing political campaign tactics and gathering member info to gauge support and take action.
Fain criticizes past UAW leadership and advocates for fair compensation from automakers benefiting from EV subsidies. The success of Fain's strategy will be tested in upcoming contract negotiations, potentially leading to strikes. However, long-term challenges from technology and the shift to EVs remain for the UAW.
Workers at Hyundai's South Korean plants have gone on strike for the first time in five years. The Korean Metal Workers' Union organized the strike (representing around 44k workers at Hyundai) in response to the government's perceived anti-union labor policies. The union is calling for a larger increase in the minimum wage and criticizing the government's labor policies.
Litigation
This week, the Michigan Supreme Court issued an opinion addressing a dispute between MSSC and Airboss. The disagreement arose when Airboss refused to continue supplying parts to MSSC at the price stated in a blanket purchase order. The key issue in the case is the type of contract the parties entered into. This legal opinion clarifies the distinction between a "requirements contract," "output contract," and a "release-by-release contract."
A "requirements contract" is one in which the buyer promises to buy and a seller to supply all the goods or services that a buyer needs during a specified period.
An "output contract" is one in which the seller promises to supply all the goods or services they produce, and buyer promises to buy all the goods or services a seller produces in a specified period.
In a "release-by-release contract," the buyer issues releases specifying the required quantity, and the seller accepts or rejects each release independently.
The court concluded that the documents between MSSC and Airboss did not contain a quantity term required for an enforceable contract under the Uniform Commercial Code. It established they had a "release-by-release contract," allowing Airboss to refuse future releases from MSSC.
(Foley offers their insight covering the impact of the ruling on their blog.)
Also of interest at Foley: USA v. Wang: Criminal & Civil Liability for Autonomous Vehicle IP & Trade Secrets Theft
”The lessons from this breach of Apple’s most sensitive IP are informative for other firms seeking to or currently developing their own technology.”
Mergers, Ventures, Acquisitions
Audi is reportedly in talks with China's SAIC to buy its EV platform from IM Motors. Audi's EV sales have struggled in China compared to Tesla and local rivals like Nio. By acquiring SAIC's EV platform, Audi aims to improve its market position and to better cater to Chinese consumers. The potential deal highlights how swiftly fortunes can change for world automakers, who once lead the Chinese vehicle market.
Opening
Germany's Wenker has chosen Greer, South Carolina, for its new US headquarters. The 131.4k sq ft facility is expected to be completed by mid-2024 and is close to its Spartanburg County operation. The supplier offers plant engineering and fabricated metal products for the automotive industry.
Production Decrease
Fisker revealed in filings that it missed its production target for the second quarter due to a shortage of components. The company produced 1,022 units of its Ocean SUV during the quarter, falling short of its projected range of 1,400 to 1,700 vehicles. Fisker attributed the shortfall to challenges faced by some suppliers in ramping up production levels due to delays in receiving components from sub-suppliers.
Raw Material Costs
China's recent export restrictions on gallium will likely impact EVs. Gallium is used in electronics and semiconductors as it is highly conductive and allows for smaller designs at a lower cost. With China dominating production, the race has begun to secure alternative supplies to avoid potential price impacts or shortages. The situation highlights the need to diversify the automotive supply chain to reduce reliance on a single country for critical materials.
Recalls
Stellantis and NHTSA are warning owners of 2003 Dodge Ram pickups to stop driving them due to the risk of exploding Takata airbag inflators, first recalled in 2015. The call comes after a passenger was killed in a crash where the airbags deployed - the 26th death in the US related to Takata airbag inflators. Stellantis urges owners to contact dealers or the company to check if their trucks are part of a 2015 Takata recall and to get the necessary repairs before driving again.
Regulation
Although UK and European policymakers seem more inclined to support EVs, Ineos is moving ahead with hydrogen fuel cells. The company is Europe's biggest operator of electrolyzers that make hydrogen from water. It hopes to drum up interest in government investments in hydrogen infrastructure by demoing its Grenadier SUV.
Risk Analytics
S&P Global Mobility: The semiconductor shortage is – mostly – over for the auto industry
Reuters: Explainer: What's behind China's failed 'truce' in EV price war?
Shutdown
This week, Fukuoka and Saga prefectures in Japan experienced flooding and landslides due to heavy rainfall. As a result, Toyota Motor Kyushu temporarily halted production at three factories located in Fukuoka. Similarly, Bridgestone had to suspend operations at four Fukuoka and Saga prefectures factories.
The Cami Assembly plant in Ingersoll, Ontario, which assembles the EV BrightDrop cargo van, has been forced to close for the month due to a shortage of GM's Ultium batteries.
"They're out at all GM plants, they need batteries and it stems from a raw material bottleneck... Sales are through the roof. Things are good, but we just don't have batteries."
- Mike Van Boekel, Unifor Local 88 chairperson