Change In Management
Volkswagen's passenger car brands have promoted Susanne Franz, a company insider, to Chief Marketing Officer. Franz takes over from Nelly Kennedy, a former Google executive who resigned after just one year for personal reasons.
Disaster
Subaru's assembly plants in Japan have halted operations for over a week following the death of a 60-year-old veteran employee $, leading to a significant loss of production, including key export models like the Forester and Crosstrek.
The incident, which occurred on February 13 at the Yajima plant in Gunma prefecture when a 25-ton mold crushed the worker, has prompted a review of safety protocols.
Despite Subaru's strong financial performance, with a recent 79% surge in operating profit, the company faces a potential production shortfall of approximately 15k vehicles. A full production ramp-up is anticipated by February 26, after a temporary shutdown to honor the victim and assess safety measures.
An accident at a Stellantis engine factory in Pratola Serra, southern Italy, resulted in the death of a 52-year-old maintenance worker from a contractor company.
The incident occurred while the worker was servicing machinery and was crushed, prompting immediate strike action by metalworker unions over safety concerns.
Expanding
Volkswagen will expand its Puebla, Mexico campus, spending an additional $1B to increase manufacturing capabilities. The move follows a prior $763M investment to expand production capabilities, including a new paint plant and production line.
Jing-Jin Electric North America plans to add to its existing location in Farmington Hills, Michigan, tacking on a new 40k sq ft plant onto its existing 87k sq ft facility. The company produces power electronics and electric drivetrains.
The US Department of Energy has conditionally agreed to extend a $544M loan to SK Siltron CSS, a South Korea's SK Group subsidiary, to expand its silicon carbide semiconductor wafer facility in Bay City $, Michigan. This move aims to support the growing demand for silicon carbide semiconductors, crucial for EV battery ranges and charging times.
Human Capital
France's Forvia plans to reduce up to 10k jobs in Europe (13% of the workforce) over the next five years, primarily through attrition.
The company's job reduction plan underlines the broader challenges facing the European automotive sector, including overcapacity and intensified competition from Chinese EV makers, signifying a pivotal moment for traditional auto suppliers to adapt to changing market dynamics.
Rivian recently announced that it will be laying off 10% of its workforce due to the slowdown of the EV market and macroeconomic challenges. This decision comes after previous layoffs in July 2022 and May 2023 and will affect its team of 16.7k employees, mainly in salaried and some non-manufacturing hourly positions.
Despite producing 57k vehicles in 2023, Rivian expects a similar production volume for 2024, citing economic and geopolitical uncertainties.
RJ Scaringe, the CEO of Rivian, has emphasized the importance of cost reduction and the development of the second-generation R2 vehicle, a more affordable compact SUV, as strategic responses to the current market dynamics.
Industry Directions
According to the Association for Advancing Automation, automotive industrial robot sales in North America declined by 34% while other industries collectively experienced a 25% reduction.
The downturn is attributed to economic slowdowns, higher interest rates, and a correction from previous over-purchasing driven by pandemic-related supply chain disruptions.
Despite the overall decline, Q4 showed a 20% increase in sales quarter over quarter, suggesting a potential rebound in orders.
Labor
The nearly month-long strike of union workers at Audi's Puebla plant in Mexico has ended with a 7% salary hike and benefits increase for 2024. The vote was passed, with 66% of 5k employees supporting the raise.
Ford and the UAW have reached a tentative agreement $ on a local contract at the Kentucky Truck Plant, preempting a potential strike that was set to begin today. The agreement, still pending ratification by 8.7k UAW Local 862 members, covers various worker concerns, including skilled trades, health and safety, and ergonomics.
This development follows over five months of negotiations without a contract. It comes at a critical time for Ford, as the plant, known for producing Super Duty pickups and other large SUVs, is considered its most profitable, generating about $25B annually.
The ratification vote is scheduled for February 28 to March 1.
Mergers, Ventures, Acquisitions
Volkswagen has entered into a supply agreement with Mahindra to equip a specific range of its EV platform with electric components of VW's MEB and unified cells.
Opening
Sumitomo Electric Wiring Systems opened a 58k sq ft plant in Tabasco, Mexico, attributed to nearshoring efforts.
This coming week, VinFast is set to break ground on its integrated EV manufacturing facility in Thoothukudi City, Tamil Nadu, India. The facility has a planned capacity of 150k vehicles annually.
Production Increase
Tesla is intensifying its Cybertruck production, as evidenced by increased deliveries and a large fleet observed by drone at Gigafactory Texas. The company aims to reach a production target of 250k Cybertrucks annually by mid-2025.
Regulation
The Biden administration reportedly plans to relax its ambitious tailpipe emissions limits, delaying a significant push for EV sales until after 2030, in response to concerns from auto manufacturers and labor unions.
This adjustment highlights the difficulty in balancing climate goals with economic and political realities amidst fears that a rapid transition could impact jobs and the auto industry's readiness to shift to EVs.
Shutdown
HiPhi, a premium EV brand under China's Human Horizons, has announced a six-month production halt starting February 18 amid financial strains reflected in delayed salaries and across-the-board pay cuts.
The company, which launched its first model in May 2021, has also faced rumors of significant layoffs affecting up to 50% in some departments, despite denials of such measures as normal staff turnover.
Supply Chain
Toyota announced plans to increase payments to around 400 Japanese suppliers $, leveraging its record profits to improve labor conditions amidst unprecedented sales and production levels.
This move aims to help suppliers hire more workers and enhance factory environments, reflecting a shift to a more supportive stance in light of recent challenges like the semiconductor shortage.
Still, it marks a significant effort by Toyota to ensure a sustainable growth pace by addressing overwork, labor shortages, and the need for better working conditions within its supply chain.
Additionally, Toyota is considering similar adjustments for overseas suppliers based on market conditions.
Toyota's decision to invest in its suppliers' workforce and environment underscores a broader industry recognition of the importance of sustainable production practices and the well-being of the supply chain workforce, setting a precedent for how major automakers might support their networks in the future.
The very last section about Toyota is hugely interesting. The rest of the article, as ever, is too.