🌞 Good morning!
As the UAW strike sends shockwaves across Ford, General Motors, and Stellantis, understanding the landscape of this disruption becomes paramount.
I’m excited to share a special episode of the Automotive Leadership Podcast where its host Jan Griffiths, ELM Analytics' CEO Tor Hough, and CCO Sig Huber dissect the challenges and strategic approaches required in this unprecedented time.Â
From bolstering supply chain resilience to mastering the five pillars of risk, this conversation is a must-listen for every automotive professional seeking clarity amidst the chaos.
Best,
Nick Gaydos
Editor, The Automotive Supply Chain Risk Digest 📬 🚗
Change In Management
Mobileye has announced the appointment of Moran Rojansky as its new CFO. She replaces Anat Heller, who departed from the role in June due to personal reasons. Rojansky has been with the Israel-based Mobileye since 2016, holding the position of interim finance chief before this promotion.
Cyber Security
The Atlantic: Car Hackers Are Out for Blood
Expanding
BMW will transition its Mini brand to all-electric by 2030, investing $750M in its UK plants. While BMW aims to use EU-sourced batteries, whether the batteries will be sourced from the UK remains to be seen.
Subaru is contemplating establishing an EV production facility in Indiana, potentially making it the center of its EV production in the US. The company may convert or expand its existing plant in Lafayette, Indiana.
Vietnam's VinFast will establish a new manufacturing plant in Indonesia by 2026 as part of a larger plan to expand its Asian markets. With an anticipated investment of up to $200M for this facility, the company targets an annual production capacity of 30k to 50k EVs.
Canada's Cavalier Tool is investing $11M to incorporate new robotic and automated technologies to increase its capacity at its Windsor plant with the support of $1.6M from the Ontario government.
Stellantis aims to increase its global battery manufacturing capacity to 400 GWh, up from 250 GWh, due to growing demand for EVs.
Industry Directions
In a bid to redefine the automobile manufacturing landscape, Tesla is on the brink of a technological leap that could drastically lower production costs and reshape how EVs are made. By pioneering the gigacasting method, the company has been using massive presses to mold large parts of its Model Y.
Now, taking this innovation a step further, Tesla aims to die cast almost the entire underbody of an EV as one single piece, in contrast to the conventional method involving around 400 parts. This new strategy, integral to CEO Elon Musk's "unboxed" manufacturing approach, may revolutionize car design, significantly speeding up production cycles and reducing costs.
Using 3D printing and industrial sand, Tesla has devised a way to quickly and affordably test and tweak their gigacasting prototypes. However, the final decision on the exact type of gigapress and casting process remains pending.
Labor
Today, nearly 13k hourly workers at three major assembly plants initiated a strike against the Detroit 3 - Ford Motor Co., General Motors, and Stellantis. This marks the first simultaneous strike against all three automakers in the UAW's 88-year history.
The strike will immediately halt the production of profitable trucks:
GM: Wentzville, Missouri (GMC Canyon, Colorado)
Stellantis: Toledo, Ohio (Jeep Gladiator, Wrangler)
Ford: Wayne, Michigan (Bronco, Ranger)
This move comes after talks stalled despite the automakers proposing significant raises. Unlike the past negotiations, the union refused to extend the 2019 contracts as talks ran past the deadline. The strike will last at least into the weekend as UAW President Fain said the union will not bargain today.
Mergers, Ventures, Acquisitions
BASF and Nanotech Energy are partnering to create a localized lithium-ion battery supply chain in North America.
BASF will produce cathode active materials in Battle Creek, Michigan, using recycled metals for battery cells made by Nanotech Energy.
American Battery Technology Company in Nevada will recycle battery scrap from Nanotech's facilities in California.
TODA Advanced Materials and BASF will use the recovered metals for new materials production.
BASF has had similar closed-loop systems in Asia and has been working on expanding this approach to Europe.
Indonesia's Anugrah Neo Energy Materials and China's Gotion Indonesia Materials have partnered to construct a high-pressure acid leaching plant on Sulawesi Island. The facility is set to produce materials used in EV batteries with an annual output target of 120k tons of nickel in mixed hydroxide precipitate. This effort aligns with Indonesia's plan to enhance its nickel processing for higher market value.
Opening
Gotion announced its $2B investment to set up a gigafactory in Manteno, Illinois. With an opening planned for 2024, once fully operational, the facility will generate 10 GWh of lithium-ion packs and 40 GWh of li-ion cells each year.
Stellantis has opened its Battery Technology Centre in Turin, Italy, now one of Europe's largest centers for designing, testing, and developing battery packs. Stellantis also plans to open another Battery Technology Centre in Windsor, Ontario, Canada and has started EV production at its Vauxhall Ellesmere Port facility in the UK.
GKN Automotive has finished building a new 312k sq ft manufacturing facility in Felsőzsolca, Hungary. The site will open in October and produce sideshafts for nearby OEMs.
Hyundai has opened a $51M Safety Test and Investigation Laboratory in Superior Township, Michigan. The facility houses labs for crash investigation, battery safety, forensics, and a track and skid pad.
The project was built in collaboration with NHTSA as part of its 2020 consent order in response to the company's untimely recalls of 1.6M vehicles equipped with Theta II engines and certain information inaccurately reported to the agency.
Production Decrease
Volkswagen's primary EV production facility in Zwickau, Germany, is facing potential job cuts due to decreased demand for its EVs.
The Zwickau plant underwent a $1.29B transformation in 2018 to adapt to EV production and currently manufactures MEB-based EVs, such as the ID.3, ID.4, and ID.5.
However, VW is facing challenges due to increased inflation and reduced subsidies, which have affected sales. Moreover, the company faces tough competition and lowered prices from Tesla and Chinese EV manufacturers.
Production Increase
Fisker is increasing its production of its Ocean EV, aiming to reach 300 vehicles per day by October, adding incrementally to the 3.1k that have been assembled at Magna Steyr's plant in Graz, Austria. Despite downgrading production targets earlier this year, Fisker's current pace is a substantial uptick, though they remain below initial projections.
Raw Material Disruption
Reuters: Few suppliers of synthetic graphite for EV batteries
Regulation
In the face of a potential strike by the UAW, the Biden administration is contemplating providing emergency assistance to smaller suppliers, who might struggle financially if a strike persists beyond six to eight weeks.
Options include providing grants from the Labor Department to affected workers or offering loans through the SBA to impacted companies. The COVID-19 pandemic and subsequent semiconductor shortages and supply chain disruptions have already placed many of these small suppliers in a fragile economic state.
The EU is investigating Chinese EV manufacturers for receiving subsidies that harm the European auto sector, potentially leading to tariffs. This action underscores escalating trade tensions and could affect global EV market dynamics.
Beijing has sharply criticized the European Commission's probe into China's EV subsidies, terming it protectionist and cautioning it could hurt economic relations between China and the EU.
Analysts have noted the potential for counteractions from Beijing. Germany's car industry, particularly, expressed concerns over a potential trade war, given its significant business interests in China. Meanwhile, the EU believes Chinese EVs are being sold in Europe at prices about 20% lower than local models.