Automotive Supply Chain Risk Digest #439
July 11 - 17, 2025, by Elm Analytics
Contents
BANKRUPTCY
Stellantis backs debt-hit steel supplier
Superior restructures under creditor control
Stellantis-GAC China venture declares bankruptcy
CHANGE IN MANAGEMENT
Renault CFO named interim CEO
CLOSING
VW to close Nanjing plant
HUMAN CAPITAL
JLR cuts UK jobs post-tariff
Volvo trims US staff, shifts focus
Webasto lays off, idles plant
INDUSTRY DIRECTIONS
Ford, Stellantis tighten supplier contracts
MERGERS, VENTURES, ACQUISITIONS
Angstrom acquires KSR International
OPENING
Panasonic opens Kansas battery facility
Kapec Valeo builds EV battery plant
SL Corporation opens Mexico lighting plant
REGULATION
Automakers brace for increased tariff impacts
Latest updates on Trump trade policies
Trump delays, threatens Canada
US sets 160% graphite tariffs
SHUTDOWN
GM idles Mexico truck plant
Bankruptcy
Stellantis is stepping in to support struggling steel supplier CLN, approving price hikes and considering plant acquisitions to avoid supply disruptions in Italy. The move reflects rising OEM efforts to shore up critical suppliers facing debt stress.
Superior Industries will hand majority ownership to term loan investors led by Oaktree Capital, cutting its debt by 90% after losing major contracts with Ford and GM. The action underscores growing pressure on struggling suppliers to restructure as automakers seek more stable, regionally based partners.
GAC-FCA, the Stellantis-GAC joint venture in China, has filed for bankruptcy after years of declining sales, inadequate capital support, and a failed equity deal. The case highlights the financial and strategic risks foreign automakers face in troubled China joint ventures.
Change In Management
Renault named CFO Duncan Minto as interim CEO following Luca de Meo's sudden resignation, amid deteriorating European sales and revised financial guidance for 2025.
Closing
Volkswagen will close its Nanjing plant in 2025 and reallocate Passat production as it adjusts to weakening ICE demand and shifts toward EVs in China.
Human Capital
JLR will cut 500 UK management roles after a 15.1% sales decline tied to Trump's 25% import tariff, despite partial relief under a new UK-US trade deal. North American sales fell 12.2% in Q2, and JLR lowered profit forecasts, citing tariff-driven uncertainty.
Volvo has reduced its US salaried staff by 15% and downsized its underutilized Ridgeville, South Carolina, plant as part of a global cost-cutting effort tied to weak demand and US tariffs.
The company is halting US sedan and wagon sales and expanding SUV production in South Carolina to counter US trade policy-driven losses and supply chain exposure.
Webasto will lay off 134 workers and idle its New Hudson, MI plant, consolidating operations amid declining vehicle volumes from key customers.
Industry Directions
Ford and Stellantis are ramping up contract enforcement with suppliers to reduce tariff exposure, with Ford incurring $2.5 billion and Stellantis potentially up to $1.8 billion.
Ford is removing suppliers' annual contract exit rights, while Stellantis is requiring all-in supply commitments and agreement to cost-cutting plans in exchange for tariff support or new business.
Supplier attorneys and executives warn that these tighter terms erode trust and threaten the viability of suppliers.
"With profit margins already rail-thin for most suppliers, absorbing any additional and unforeseen cost can have a huge negative impact on the business"
- Michael Brady, executive partner, Warner Norcross + Judd.
These shifting terms reflect growing OEM efforts to push financial risk down the chain, forcing cost-burdened suppliers into less flexible, potentially unsustainable agreements.
Mergers, Ventures, Acquisitions
Michigan's Angstrom Automotive Group has acquired KSR International, an Ontario, Canada-based company, strengthening its position in offering pedal modules and sensors.
Opening
Panasonic has opened a $4B EV battery plant in De Soto, Kansas, its second in the US, with a planned capacity of 73GWh of 2170 cylindrical cells. The site will strengthen domestic supply chains against tariffs and expand Panasonic's US presence beyond its partnership with Tesla.
Kapec Valeo is investing $116 million in Yeongcheon, South Korea, to build an EV battery system plant and boost domestic supply capacity. A subsidiary of PHC Group, the company was formed in 2017 as a joint venture between Korea Powertrain and France's Valeo.
South Korea's SL Corporation will invest $45M to open a new lighting plant in Villa de Reyes, Mexico, supplying customers such as Hyundai, Kia, and GM. The site will produce up to 1M headlights annually.
Regulation
US automakers and suppliers are preparing for increased tariff impacts in the second half of 2025, as their initial inventory buffers are depleted.
The cumulative duties, especially the 25% auto tariff, are expected to drive up costs.
These tariff-related burdens are estimated to add $2k per vehicle and could lead to price hikes, strain supplier liquidity, and push consumers toward lower-cost or used cars.
Automakers are reluctant to absorb these costs and are tightening contract terms, which increases the risk of supplier defaults.
In response, OEMs are also ramping up their supply chain visibility resources to proactively manage disruptions.
The escalating tariff burden threatens supplier solvency, squeezes OEM profit margins, and may trigger long-term changes in vehicle pricing and production strategies.
Automotive News: Auto industry awaits trade clarity after Trump delays reciprocal tariffs again, threatens Canada with 35% duty
The US Commerce Department has imposed preliminary anti-dumping duties of 93.5% on Chinese graphite, raising the total tariff rate to 160% when combined with existing levies.
The move follows a petition from US producers accusing Chinese firms of unfair subsidies and dumping. China dominates graphite processing, accounting for two-thirds of the US's imports.
Analysts warn that the tariff could add $7 per kWh to battery costs, squeezing profits for automakers and battery makers that rely on Chinese supply.
"[The tariff] basically wipes out profits for one or two entire quarters for the Korean battery makers"
- Sam Adham, Head of Battery Materials, CRU Group.
Shutdown
GM is pausing output at its Silao, Mexico, plant for several weeks this summer, affecting production of its top-selling Silverado and Sierra pickups.
The downtime highlights vulnerability in GM's most profitable supply chain segment amid trade-related disruptions.
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