Automotive Supply Chain Risk Digest #419
February 7 - 13, 2025, by Elm Analytics
Contents
BANKRUPTCY
Accuride exits bankruptcy, refocuses on wheels
CLOSING
GM funds supplier closure, avoids disruption
DISASTER
Explosion injures 13 at Parker Lord
EXPANDING
Mazda invests $150M in Thai EV hub
BMTS expands Mexico plant for turbochargers
HUMAN CAPITAL
Porsche cutting 1.9k jobs in Germany
GM lays off 79 at CAMI Assembly
MERGERS, VENTURES, ACQUISITIONS
Honda, Nissan cancel $50B merger talks
Renault, Geely expand partnership in Brazil
Carlyle acquires Highway, Roop Automotives
OPENING
Verne building Croatia's first robotaxi plant
Great Wall Motor opening two Tianjin factories
REGULATION
US automakers push for phased EV tax credit repeal
Ford warns of Trump policies' impact
Bankruptcy
Michigan-based wheel manufacturer Accuride is set to exit bankruptcy $ after securing court approval for a restructuring plan that eliminates over $400M in debt.
The company, which filed for Chapter 11 in October due to unprofitable contracts and weak freight truck demand, will refocus on its North American wheels business. Accuride is divesting its unprofitable Gunite operations in Illinois and exiting a supply contract for GM's BrightDrop electric vans in Ontario as part of the plan.
Closing
General Motors is financially supporting Michigan Spring & Stamping to prevent supply chain disruptions as the 79-year-old supplier winds down operations. The company, a key provider of engineered metal components for GM and other automakers, is closing after failing to secure a buyer.
Under an agreement filed in Michigan, GM will fund operations through June, allowing time for suppliers and OEMs to re-source production. All 116 employees will be laid off, though retention bonuses are being offered. The move reflects GM's ongoing efforts to stabilize critical suppliers and avoid production delays. GM's intervention highlights the continued financial strain on small auto suppliers and the risk of supply chain disruptions as legacy automakers navigate production shifts.
Disaster
At least 13 people were injured after a massive industrial fire caused an explosion at the Parker Lord Corporation in Saegertown, Pennsylvania, on Sunday morning. This location manufactures and develops adhesives, coatings, and thermal management materials.
Expanding
Mazda will invest $150M to establish Thailand as the production hub for its electrified compact SUVs, supporting hybrid and EV technologies. The investment will increase production at Mazda's AAT and MPMT plants, targeting an annual capacity of 100k vehicles.
BMTS Technology announced a $25M expansion of its plant in Ramos Arizpe, Coahuila, Mexico, increasing production capacity by 40%. The investment will allow the company to assemble over 2M turbochargers annually. The plant supplies General Motors and Ford turbochargers and will soon begin production for the Jeep Grand Cherokee hybrid from Stellantis.
Human Capital
Porsche plans to cut 1.9k jobs at its Zuffenhausen and Weissach plants in Germany by 2029 due to weakening EV sales and rising development costs. The job reductions, expected to be voluntary, come as Porsche refocuses on internal combustion and plug-in hybrid models.
General Motors has laid off 79 workers at its CAMI Assembly plant in Ingersoll, Ontario, citing overstaffing. The layoffs come just a week after the plant resumed two-shift production of Chevy BrightDrop electric work vans.
The plant employs 1.3k workers under a Unifor-negotiated collective agreement and has faced fluctuating demand for BrightDrop vans, previously operating under a rotating two-week work cycle. GM maintains that the layoffs are part of ongoing workforce adjustments initiated in 2024.
Mergers, Ventures, Acquisitions
Honda and Nissan abandoned their $50B merger talks due to disagreements over control and strategic direction. Honda proposed making Nissan a wholly owned subsidiary, which Nissan rejected, arguing it would undermine its autonomy and undervalue the company.
Honda, in turn, feared that a shared leadership structure would slow decision-making at a critical time. Both Honda and Nissan now face the challenge of catching up in EVs and AV tech without the benefits of scale a merger could have provided.
Renault and Geely are in advanced talks to expand their partnership to Brazil, with a deal expected to be announced later this month. Under the agreement, Geely would use Renault's retail network to sell Geely-branded vehicles imported from China and take a minority stake in Renault Brazil. Additionally, Geely plans to assemble cars at Renault's Curitiba plant, potentially leveraging a multi-energy platform for gasoline, hybrid, and EV production. The move would increase Renault's plant utilization while giving Geely a foothold in Brazil amid trade tensions affecting its exports to Europe and North America.
Global investment firm Carlyle has acquired a controlling stake in Highway Industries and Roop Automotive, combining two manufacturers of forged and precision-machined components for electric, hybrid, and internal combustion vehicles. The merged entity will operate 12 manufacturing plants and 14 international warehouses, supplying 1.5k products to 55 customers across 17 countries. The founders will retain stakes, with Mohit Oswal serving as Non-Executive Chairperson. Carlyle aims to leverage synergies to enhance manufacturing capabilities and expand in India's growing auto components sector.
Opening
Verne has begun constructing a 306k sq ft autonomous vehicle production plant near Zagreb, Croatia, which will manufacture the country's first robotaxi.
Great Wall Motor will establish two new factories in Tianjin, China, as part of its MIND Project. The factories will produce advanced lighting and thermal management components, including air conditioning assemblies, cooling modules, and vehicle lighting systems.
Regulation
US Automakers, including Ford and GM, are lobbying to delay repealing EV tax credits under the Inflation Reduction Act if the Trump administration moves to eliminate them.
They propose a three-year phase-out to allow manufacturers to adjust. They cite billions already invested in EV and battery plants, many of which are located in Republican-led states.
Industry leaders warn that abruptly ending subsidies could threaten thousands of jobs and leave investments stranded. While some companies advocate preserving consumer and manufacturing incentives, Tesla CEO Elon Musk continues to push for eliminating EV subsidies altogether.
Ford CEO Jim Farley warned that potential policy changes under a Trump administration, such as repealing EV subsidies and imposing tariffs on Mexican and Canadian imports, could lead to job cuts.
Speaking at a New York conference, he also criticized the proposed 25% tariffs on Mexican and Canadian auto imports, arguing that they would severely disrupt the US auto industry while benefiting Asian and European automakers.
While acknowledging Trump's push for more US-based manufacturing, Farley cautioned, "So far what we're seeing is a lot of costs and a lot of chaos."
