Bankruptcy
Unique Fabricating, a plastic, rubber, and foam components supplier to Bosch, General Motors, Stellantis, Rivian, and Yanfeng, has filed for Chapter 7 bankruptcy ($).
Despite previous attempts to salvage the company, including price increases and a bailout by GM, Stellantis, and Yanfeng, the company could not regain its footing. Unique Fabricating has facilities in Georgia, Kentucky, Michigan, Mexico, and Ontario.
Cyber Security
This week, Nissan's North American operations grappled with a significant network outage affecting internal email, call centers, credit application processing, and loan services. The days-long outage also impacted parts ordering, rebate information, recall data, and warranty claims.
While the cause of the outage remains unclear, there is speculation about a possible cyberattack, though Nissan has not confirmed this. This incident recalls past network issues in the automotive industry, notably a ransomware attack on Kia and a previous attack on Nissan in 2017.
Human Capital
Chinese EV startup NIO plans to cut 10% of its workforce, focusing on eliminating duplicate roles and scaling back on unprofitable projects. The decision is driven by financial pressures, including a price war led by market leaders like BYD and Tesla, resulting in reduced deliveries, narrowed margins, and increased losses.
Industry Directions
At this week's MEMA Vehicle Supplier Conference, auto industry executives emphasized the need for greater collaboration ($) between automakers and suppliers in the context of the EV transition.
The shift to EVs, higher interest rates, and supply chain challenges have created uncertainty, especially as EV sales growth has slowed and launch dates have been pushed back. This environment puts pressure on suppliers who have invested heavily in EV parts programs.
Executives from companies like Vitesco Technologies and Stellantis highlighted the importance of partnership and open communication in adapting to the evolving EV market. Additionally, the industry faces challenges with labor availability and increased wage pressures following the UAW's agreements with the Detroit 3, further complicating the transition.
Labor
Unifor members voted to ratify a new agreement with Stellantis this week. The new deal covers 8.2k members at the Windsor Assembly Plant, Brampton Assembly Plant, Etobicoke Casting Plant, Red Deer, and parts distribution centers in Mississauga, Canada.
Separately, Unifor has resumed negotiations with Magna after workers at its Integram facility in Windsor, Canada, initiated a strike. The Integram plant produces seating for vehicles at Stellantis' nearby assembly plant and other facilities in the US operated by the Detroit 3 automakers.
UAW President Shawn Fain announced an aggressive initiative to organize non-union US auto plants. This push comes after the UAW secured significant pay and benefits increases in recent negotiations, which Fain believes influenced Toyota's decision to raise wages for its non-union US factory workers. The UAW's efforts have historically faced challenges in southern US states with "right to work" laws.
Metalworkers at GM plants in Brazil suspended their 17-day strike after reaching an agreement with the company. The Sindmetal union announced that workers approved the deal following GM's decision to cancel the 1.2k layoffs at the Sao Jose dos Campos, Sao Caetano do Sul, and Mogi das Cruzes factories.
Mergers, Ventures, Acquisitions
Renault has officially spun off Ampere, its EV division.
Reuters: What you need to know about Ampere, Renault's EV unit
Polestar's upcoming Polestar 4 EV will be built at a Renault Korea Motors factory in Busan, South Korea, marking a shift from previous manufacturing in China. The decision to manufacture in South Korea has implications for the brand due to ongoing US-China trade tensions and EV tax credit stipulations under the Inflation Reduction Act.
General Motors and Stellantis are investing in Niron Magnetics, a startup that develops EV magnets that do not require rare earth materials. This investment is part of a broader strategy to lessen dependency on China, which currently dominates about 90% of the rare-earth magnet supply. Niron aims to create permanent magnets for EVs using alternative materials. Niron's iron nitride magnet, known as a Clean Earth Magnet, is reported to be more magnetic than traditional permanent magnets made with neodymium and praseodymium.
In recent weeks, Hwashin, Hyundai Industrial, and Daechang Seat Corp have announced new projects near Hyundai's EV manufacturing campus in Georgia.
Opening
Thai Summit Corp is set to open a 297k sq ft metal stamping parts plant at the redeveloped site of the former Eastland Center Mall in Harper Woods, Michigan.
China's BYD reportedly plans to establish its first European car factory in Hungary.
Hong Kong-based Time Interconnect Technology Limited is investing $40M in a new plant in Reynosa, Tamaulipas, Mexico, to produce cables and accessories for the automotive industry. The plant is set to begin operations in December.
JIOS Aerogel opened a new manufacturing plant in Pioneer, Singapore, that produces thermal and electrical insulation for EV batteries.
Production Decrease
California's Lucid reported a significant financial loss in Q3-2023, losing approximately $430k on every car sold. The company's revenue was $137M, a decline from $195M in the same period last year, with net losses totaling nearly $630M.
Lucid delivered 1,456 vehicles in Q3 but manufactured only 1,550 EVs, a substantial decrease from its peak production in the previous year. Consequently, Lucid has lowered its production guidance for the year to 8k-8.5k units, down from an initial target of 10k-14k vehicles. Despite these challenges, Lucid ended the quarter with $5.4B in liquidity, which it plans to use to launch its upcoming Gravity SUV.
Energywire: An EV slowdown? Battery makers are cool with that.
Supply Chain
The recent UAW strike, though resolved, is expected to leave lasting financial strains ($) on smaller automotive suppliers.
"The longer-term implication for suppliers is that this, unfortunately, is probably going to mean some suppliers probably aren't going to make it through... Even though we ended the strike, there is tremendous vulnerability in the supply chain."
- Laurie Harbour, CEO of Harbour Results Inc.
About 40% of suppliers had to lay off workers during the strike, and around 11k automaker and supplier workers were laid off beyond the 45.6k who went on strike. The strike led to an estimated $3.3B loss in supplier wages and earnings.
Smaller suppliers, already under stress due to the pandemic, face heightened financial vulnerability with rising costs and reduced vehicle production. Higher interest rates make it more difficult for these suppliers to secure funding, with about 29% of manufacturers in the supply chain considered "questionably bankable."
Suppliers are now looking to ramp up production quickly, but challenges in recalling workers and securing materials could complicate this process.
Maersk, a major global container trade player, is cutting at least 10k jobs amidst reduced demand, overcapacity issues, rising costs, and weaker prices to reduce costs by $600M next year.
Hapag-Lloyd, another significant container line, has dropped key routes to manage costs, specifically from Southeast Asia to North Europe and the Eastern US, but is not planning staff reductions, unlike its competitor Maersk at this time.