Dear reader,
This week, two unfortunate and disheartening incidents occurred at supplier manufacturing facilities in different parts of the world.
A worker lost her life when she climbed underneath a machine for a job-related task at a Forvia facility in Ohio, while two workers were injured in an explosion at Chuo Spring's plant in Aichi Prefecture, Japan.
The explosion not only caused injuries but also resulted in suspension parts shortages, which led to the shutdown of ten production lines at Toyota for several days.
As we know, all manufacturing facilities are subject to hazards, but losses can be avoided by having a plan in place to mitigate those risks. At Elm Analytics, we believe in taking a proactive approach to risk management, and we encourage you to do the same.
One easy way to get started is by re-examining the underwriter's reports for your property damage and business interruption insurance. An independent auditor has already made inspections, assessments, and evaluations and provided a list of recommendations for improvements.
Use that list to assist in creating your mitigation plan, which will help you reduce your risks, lower insurance costs, and keep people safe.
Let's work together to make our manufacturing facilities safer and more efficient, one step at a time.
Best,
Nick Gaydos
Editor, Elm Analytics' Automotive Supply Chain Risk Digest
If you are interested in learning how these principles can be applied across your supply chain, drop us a line at +1 (248) 660-9356.
We've partnered with Aon to create a Property Risk Control Assessment that is easily deployed throughout your supplier network.
Bankruptcy
Volta Trucks, an EV startup specializing in commercial trucks, has initiated bankruptcy proceedings in Sweden due to financial challenges exacerbated by supplier issues.
The company faced significant hurdles following the bankruptcy of EV parts supplier Proterra and uncertainty around its battery supply. These complications limited its production capabilities and hindered its ability to ensure the necessary capital. Volta Trucks will soon be filing for bankruptcy in the UK as well.
Despite having raised about $316M and securing over 5k vehicle orders, the company's fate has mirrored that of several other EV startups.
LAS Capital, owned by former Lordstown CEO Stephen Burns, will acquire Lordstown Motors' intellectual property, business records, and machinery, including assembly lines for electric vehicle motors and batteries, for $10.2M.
Lordstown Motors filed for bankruptcy last June after an investment deal failed with Taiwan's Foxconn. Burns resigned in 2021 following an internal investigation into a short seller's claim.
Disaster
A worker was killed just after midnight last Saturday at the Forvia plant in Franklin, Ohio, that produces emissions control systems. The worker climbed underneath a machine for a job-related task when the machine was activated.
An explosion at Chuo Spring's factory in the city of Toyota, Aichi Prefecture, Japan, on Monday injured two workers.
Toyota Motor Corp was forced to halt ten production lines across six factories in central Japan due to related suspension parts shortages. On Tuesday, Toyota extended the partial production shutdown through Wednesday.
Chuo Spring reported that the cause of the incident at the factory's drying furnace, responsible for cooling hot steel, is still under investigation.
Labor
Unifor members at GM Canada ratified a new 3Y agreement, concluding a brief strike. The deal, approved by 80% of voters, promises significant wage increases and other benefits for workers at locations in Oshawa, St. Catharines, and Woodstock, Ontario. This agreement follows a similar pattern set by the union's recent negotiations with Ford.
UAW workers at ZF Group's axle factory in Tuscaloosa, Alabama, approved a new four-year contract ($), concluding a strike that began on September 20 and involved about 190 employees. The agreement removes the tiered wage system by its end in 2027, a significant union goal, and includes wage increases and new health plan options.
The strike had potential implications for the nearby Mercedes-Benz assembly plant in Vance, Alabama. However, ZF maintained production during the strike, and no discernible impact on Mercedes' operations was reported.
On Thursday, the Detroit 3 announced layoffs ($) of an additional 270 workers with jobs in component supply chains and production facilities affected by the ongoing UAW strike.
Stellantis has pulled out of CES, citing financial strain due to the ongoing UAW strikes.
Mergers, Ventures, Acquisitions
Two Chinese companies supplying Tesla will invest nearly $1B in Nuevo Leon, Mexico, where Tesla is building its new manufacturing plant. Ningbo Tuopu Group plans to invest $700M, adding 10k jobs to produce shock absorption products. Hesai Technology makes lidar sensors and will invest $260M, creating 4k positions.
Stellantis has created a new commercial vehicle division, Stellantis Pro One, intending to double its commercial revenue by 2030. The expansion plan involves significant electrification efforts, with models like the electric Ram 1500 REV, electric vans, and an undisclosed hydrogen solution being part of their future lineup.
Dongfeng will consolidate its in-house NEV businesses by acquiring land-use rights and buildings in Wuhan and Xiangyang owned by its JV with Stellantis, DPCA.
Hyundai and Kia have established a strategic partnership with Infineon to ensure a stable supply of power semiconductors through 2030.
Opening
Ground Effects Ltd, based in Windsor, Canada, will build a new 108k sq ft factory in Orion Township ($), Michigan, specifically to produce spray-on bedliners for GM's upcoming electric trucks. (The information was released hours prior to GM announcing delayed production at its Orion Assembly Plant; below.)
Production Decrease
General Motors announced the postponement of its electric pickup production launch at the Orion Assembly plant near Detroit to late 2025. The delay affects the Chevrolet Silverado EV and GMC Sierra EV.
GM attributed it to the need for engineering enhancements and a strategy to align with the evolving demand for EVs, not the ongoing UAW strike. Around 1k employees from Orion will have the option to transfer to other Michigan plants, with a promise of potential return post-retooling.
The Orion plant, facing nearly two years of downtime, will undergo a significant transformation after the Chevy Bolt EV and EUV production ceases, with a substantial $4B investment planned for its reconfiguration to produce the new EVs.
Tesla's third-quarter earnings report and subsequent call stirred significant concern among investors and analysts, with the company missing financial targets and CEO Elon Musk adopting an unusually cautious stance.
"In a nutshell we would characterize last night's conference call as a 'mini disaster'..."
- Wedbush Securities analyst Dan Ives.
Key issues revolved around the potential continuation of vehicle price reductions, challenges in Cybertruck production, and the impact of high-interest rates on consumer demand.
Musk's emphasis on cost and affordability, without concrete assurances against further price cuts, has analysts apprehensive about the company's near-term financial health.
Raw Materials
Starting December 1, China will mandate export permits for certain graphite products, including high-purity synthetic and natural flake graphite, to safeguard national security amid global challenges to its manufacturing dominance.
As the leading producer, exporter, and refiner of graphite—crucial for EV battery anodes—China's new regulation comes as international scrutiny over its industrial practices intensifies.
Recalls
Ford is issuing a recall for 35k Mustang Mach-E EVs in the US due to a potential overheating issue in the high-voltage battery contactor, which could result in a loss of power.
Despite software updates and technical service bulletins issued after the first recall in June, there have been 107 reported instances of contactors overheating post-repair, prompting this new recall.
According to data from NHTSA, over 4.9M Ford vehicles have been affected by 46 recalls, the most of any automaker this year.
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