Automotive Supply Chain Risk Digest #355
November 24 - 30, 2023, by Elm Analytics
Bankruptcy
P&THE Manufacturing will spend $2.6M to add capacity and update casting technology at TCI Aluminum, a BorgWarner supplier in West Michigan.
In September, P&THE acquired the Spring Lake Township, Michigan company.
TCI Aluminum, previously Turbo Components Inc., filed for bankruptcy last May.
Change In Management
William Peffer, previously CEO of Maserati North America, will replace Jim Morrison as the head of Jeep in North America.
Morrison will now head the newly formed Jeep Performance Parts business.
Kelly MacDonald, previously the chief marketing officer for Maserati Americas, will take over Peffer's role as CEO at Maserati.
Closing
Michelin will close three production sites in Germany by the end of 2025. The affected sites are in Karlsruhe, Trier, and Homburg, impacting 1.5k jobs.
This follows the company's recent announcement of 1.4k job cuts in the US.
Expanding
ZF Group is investing $500M to expand its Gray Court, South Carolina, transmission facility, adding 400 jobs and undergoing facility upgrades to produce e-mobility solutions.
Human Capital
Volkswagen plans to save $10.9B by improving efficiency in the transition to EVs, which will include staff reductions.
Thomas Schaefer, its CEO, communicated this to staff during a meeting at Wolfsburg's company headquarters.
Schaefer cited high costs and low productivity as factors affecting Volkswagen's competitiveness.
The company had previously pledged not to carry out dismissals until 2029, but will begin with targeting early retirements.
EV battery startup Our Next Energy has cut nearly 25% of its workforce due to "market conditions" such as high borrowing costs and an uncertain economy.
The company says it is still focusing on establishing a gigafactory in Michigan and developing a North American battery supply chain.
Industry Directions
The Verge: GM wants you to know that it's also unhappy with the slow pace of its EV business
NYTimes: Electric Vehicle Push Returns North Carolina to Its Lithium Mining Roots
Labor
The UAW is embarking on a significant effort to organize auto plants operated by over a dozen nonunion automakers, including Tesla, Lucid, Rivian, and several foreign companies like Toyota, Honda, and BMW.
The union's drive targets nearly 150k workers across 13 states. This move could significantly shift the American auto industry, especially in nonunion manufacturing regions like the South.
Tesla's German production faces potential disruption due to a labor dispute in Sweden. The conflict escalated when Hydro Extrusions, a subsidiary of Hydro that supplies specialized aluminum components for Tesla, joined a sympathy strike.
This action, initiated by IF Metall, Sweden's most prominent manufacturing union, aims to compel Tesla to sign a collective bargaining agreement for its Swedish workers. Around 50 workers at Hydro Extrusions have ceased producing these components ($), which are crucial for Tesla's factory in Berlin.
The Swedish unions are adamant about securing a collective bargaining agreement, citing its importance to the Swedish labor market model.
Mergers, Ventures, Acquisitions
General Motors is reducing its investment in the Cruise automated driving division due to safety concerns and accidents involving its self-driving taxis in San Francisco.
The company is now focusing on improving fleet operations in a single city to rebuild trust with regulators and communities.
Toyota plans to sell shares in Denso ($), its top supplier, to generate a $2B fund for investment in new technologies like batteries, hydrogen, and software.
This sale will reduce Toyota's stake in Denso from 24.2% to 20%. Other Toyota Group suppliers, including Aisin and Toyota Industries, are also reducing their holdings in Denso.
Schaeffler increased its offer price for shares in Vitesco Technologies, but Vitesco's management still considers it "inadequate from a financial point of view."
The proposal aims to merge the two companies and strengthen their position in the EV segment as part of a strategy to consolidate the Schaeffler family's holdings and simplify their business structure. The offer period ends on December 15.
Volkswagen has reportedly chosen Magna Steyr, an Austrian contract manufacturer, to develop its first wave of Scout EVs, a deal worth nearly $500M.
The development of Scout's two EV models, an SUV, and a pickup truck, is already underway in Austria and the US.
Scout plans to start production in South Carolina in 2027 with a target of 150k EVs in the first year.
Renault is reportedly in talks with AESC, a Chinese battery cell firm, to supply battery cells for its vehicle plants in Valladolid and Palencia, Spain.
AESC plans to open a factory in Navalmoral de la Mata, Cáceres, in 2025 with a capacity of up to 50 GWh.
Opening
Nissan will invest nearly $1.4B to make three new electric models at its Sunderland plant in northeast England, including an additional battery plant.
The initiative appears to secure the future of the British auto manufacturing industry, which had faced an existential crisis due to Brexit and the global shift to electric cars, causing a 50% reduction in car output over the last six years.
Australian carbon fiber wheel maker Carbon Revolution plans to build a North American factory that could produce several hundred thousand sets of wheels per year. The company's current factory in Australia can produce 70k wheels annually and supplies wheels to GM for certain Corvette variants.
Japan's Toyoda Gosei launched a new 581k sq ft airbag and integrated steering wheel production plant in Foshan City, Guangdong Province, China.
GAC Aion, an EV subsidiary of China's GAC Group, is building a new $65.9M manufacturing plant in Rayong province, Thailand, with an annual capacity of 50k vehicles. The plant's first phase is to be completed by July 2024.
Japan's Kurabe formally inaugurated its new plant in Aguascalientes, Mexico, that produces steering wheel and seat heaters. The plant will employ 400 workers in its first phase.
Gotion and InoBat have finalized plans to build a 20 GWh battery cell factory in Å urany, Slovakia. Construction will begin in 2024, with production expected to start in Q2-2026 and full-scale production in 2027.
Recalls
Honda recalled over 300k 2023 and 2024 HR-V and Accord models due to a missing rivet in the seatbelt pre-tensioner. The rivet was skipped during the initial assembly.