Editor’s note
Elm Analytics will be at the 2026 MEMA OE Annual Conference & Expo in Novi, Michigan, on Nov. 18 and 19. If you’re going, come find us in the presentation hall, just inside the entrance. We’d like to meet as many Risk Digest readers in person as we can. Now, on to the week. -nick
Contents
CLOSING
Dakkota closing Detroit instrument panel plant
DISASTER
Chemical release halts Toledo Wrangler production
EXPANDING
Toyota adds hybrid Lexus NX production
Musashi expands Mexican hybrid parts production
LABOR DISPUTE
Unifor authorizes strike against Stellantis Canada
Volkswagen reaches tentative Puebla labor deal
MERGERS, VENTURES, ACQUISITIONS
General Motors cancels e-VAC magnet supply deal
Bosch plans separate Mobility legal entity
Foxconn buying half Mitsubishi Electric Mobility
OPENING
SA Automotive plans Ramos Arizpe plant
INFAC opens Auburn auto parts plant
PRODUCTION DECREASE
Toyota RAV4 output falls amid changeover
RAW MATERIAL COSTS
GM expects $2B cost inflation bill
REGULATION
Mexico restricts duty-free vehicle kit eligibility
INA seeks safeguards for Mexican suppliers
Canada, Ontario pledge $6.2B industry support
France, Germany propose softer emissions rules
EU lawmakers negotiate weaker emissions targets
SUPPLY CHAIN
Tesla says batteries constrain vehicle sales
Closing
Dakkota Integrated Systems will close its Detroit plant in two stages and cut 397 jobs after losing Stellantis instrument panel contracts. The plant builds panels for the Jeep Grand Cherokee and Dodge Durango, both assembled at the nearby Detroit Assembly Complex. The first line shuts Dec. 31, cutting 205 jobs, and the second closes March 31, 2027, cutting 192 more. A separate WARN notice filed Sept. 9 covers a Dakkota site in Watertown Township, near Lansing, Michigan, where 67 jobs end Dec. 31 while General Motors halts its Lansing Grand River Assembly plant to retool. Dakkota, a joint venture of Rush Group and Magna, handles module assembly and sequencing at 14 sites in the US and Canada.
Disaster
Stellantis halted Jeep Wrangler production at the north plant of its Toledo Assembly Complex after a chemical release at the MC Tank Transport terminal, about a mile away. Workers were sent home Tuesday night, and both Wednesday shifts were canceled. The south plant, which builds the Gladiator, was not scheduled to run this week. The release involved glycidyl methacrylate, an irritant, and officials had shrunk the evacuation zone to half a mile and lifted the shelter-in-place order by 5 pm Wednesday. The city had reported no injuries, but the county health department says at least 60 people were treated for symptoms possibly linked to the release.
Expanding
Toyota will start building the updated, hybrid-only Lexus NX in December at its Cambridge, Ontario, complex, which also builds the RAV4 and Lexus RX. A second plant in Woodstock also builds the RAV4. Together, the two sites built 538k vehicles last year, making Toyota Canada's largest producer, and about 85% of output is exported, mostly to the US. Toyota invested $1.1B in the latest RAV4 and says its Canadian plants run two full shifts plus regular overtime, at or near full capacity. The Detroit Three are moving in the opposite direction:
GM cut a shift at Oshawa and ended output at Ingersoll
Stellantis idled Brampton and dropped the Pacifica hybrid in Windsor
Ford refocused Oakville on Super Duty trucks
Honda scrapped a $10.7B EV battery supply chain plan in Ontario. The White House has threatened to raise auto tariffs to 50% if no trade deal is reached by Jan. 1, possibly leaving 457k Toyota vehicles a year exposed.
Musashi Auto Parts Mexico has spent more than $50M to expand its San Luis Potosí plant for new hybrid vehicle programs. The project adds about 86k ft², three lines, and 63 machines. The site forges and machines precision parts for differentials, suspension, steering, and engines. It needs about 300 more workers, which would raise headcount from more than 650 to about 1k. Honda holds about 25% of parent Musashi Seimitsu and accounts for about half its sales.
Labor
Unifor members at Stellantis in Canada have voted 97.3% to authorize a strike. The union is not yet in a legal strike position because neither side has requested a “no board” report (a formal document issued by the government that signals the failure of collective bargaining negotiations). Unifor represents more than 9k Stellantis workers, and its contract expired Sept. 20. Talks stalled Sept. 11, when Stellantis signed a memorandum of understanding to sell the idle Brampton, Ontario, plant to defense contractor Roshel; job security and Brampton's future remain the main issues. Unifor has asked Industry Minister Mélanie Joly to block the sale. Windsor Assembly, which builds the Pacifica and Charger, is the plant a strike would stop. Once either side requests a “no board” report, Ontario law starts a 17-day countdown to a legal strike, so Windsor suppliers will get about two and a half weeks' warning.
Volkswagen avoided a walkout in Mexico. The automaker and the union at its Puebla plant, one of its largest and a major export base for North America, reached a tentative 12-month deal that called off a strike set for Oct. 22. The package totals 8.24%, including a 4.4% direct wage increase, a one-time payment and a savings fund, and goes to a member vote on Oct. 29. Workers had earlier rejected a 13.16% across-the-board increase spread over two years. Puebla builds the Jetta, Taos, and Tiguan.
Mergers, Ventures, Acquisitions
General Motors has canceled its long-term magnet supply deal with e-VAC Magnetics, the US unit of Germany’s Vacuumschmelze, and the two sides are in arbitration, according to SEC filings and a person familiar with the matter. The $500M plant in Sumter, South Carolina, opened late last year with capacity for just under 2k metric tons of rare earth magnets a year. About 90% of that was meant for GM’s EV traction motors, with the rest going to the US government. GM ended the deal July 1 without giving a reason, after a dispute that began in April, and e-VAC is seeking damages for wrongful termination. Energy Fuels, which agreed in June to buy e-VAC for $1.9B, says the price may change depending on the outcome. China makes about 90% of the world’s permanent magnets.
Robert Bosch will legally separate its automotive parts business, moving Bosch Mobility into its own limited liability company that stays wholly owned by the group. Its digital, business services and real estate units will be split out too, leaving the parent mainly a holding company. Mobility had 2025 sales of $62.5B, more than 60% of the group total, but its operating margin fell to 1.8% from 3.8%. Bosch needs to close an annual cost gap of about $2.8B, on top of the roughly 13k job cuts it announced last year, mostly in Mobility. While Chinese suppliers such as CATL and Huawei are resetting benchmarks for price and speed, Bosch says it has no plans to sell Mobility or merge it with another supplier. A future partner or buyer would need this separate legal entity, regardless of what Bosch says now. Customers should expect supply contracts to move to the new Mobility company.
Foxconn will pay $728M for half of Mitsubishi Electric Mobility, the automotive parts unit of Mitsubishi Electric. The two will run it as an equal joint venture, with closing set for Oct. 1, 2027. The pitch is EV platforms built in Japan, but the unit is mostly a traditional Tier 1. It makes alternators, starters, ignition coils, engine controls, steering motors, radar and cameras, along with motors, inverters and chargers for EVs. Sales fell to $5.5B last fiscal year at a 6.2% margin and are expected to drop to $5.2B this year. The deal leaves out Mitsubishi Electric's SiC and IGBT power modules and values the unit at about $2B, low enough that the seller expects a $630M write-down.
Opening
Tier 1 supplier SA Automotive, based in Webberville, Michigan, will build a 250k ft² plant in Ramos Arizpe, Coahuila, with sister division SACO AEI. The first 125k ft² will open in the first quarter of 2027, with molding presses ranging from 660 to 3.5k tons. It will make headliners, door panels, seatback covers, trunk floors, cargo systems, and honeycomb load floors. The site has direct rail access and silos for raw material. SA Automotive has plants in Michigan and Puebla and supplies Ford, GM, Volkswagen, Stellantis, Honda, and Nissan, but it gave no figures for cost, staff, or volume. (Ramos Arizpe is also where GM will assemble the Groove and Aveo from kits, as covered below.)
South Korean supplier INFAC North America has opened a plant in Auburn, Alabama, in an existing 160k ft² building. It is investing more than $30M and needs 120 workers for the first phase. INFAC makes control cables, horns, antennas, and feeder cables for Hyundai, Kia, General Motors, and Chrysler, among others. Auburn is within about an hour of both Hyundai's Montgomery plant and Kia's West Point, Georgia, plant.
Production Decrease
Toyota's choice to keep building the outgoing RAV4 well into last year's fourth quarter has cut North American output of the SUV by 30% through September, according to AutoForecast Solutions. The Ontario plants covered above built few RAV4s in January and February while they retooled for the hybrid-only sixth generation. Kentucky started late after Toyota dropped a plan to phase the model out there. US dealers hold about four days of supply against an industry average of 51. The plants have run at capacity since April, averaging more than 30k RAV4s a month.
Raw Material Costs
General Motors expects commodity inflation, logistics, and memory chip prices to cost it about $2B in 2026, with commodities alone adding about $400M in incremental cost this year, according to CFO Paul Jacobson. GM says copper is at record levels and spot steel prices have climbed as much as 50% from 2025. Tariff costs should land near the low end of a $2.5B to $3.5B range. The redesigned Silverado 1500 and Sierra 1500 are already in production in Silao, with Fort Wayne following in the first quarter after four weeks of downtime in December and Orion in the second. GM expects light-duty pickup output to stay flat in 2027 during the changeover. Memory chips now sit next to steel and copper in GM's inflation bill, and AI data center demand, not automotive volume, is setting that price.
Regulation
Mexico has determined who can use its new five-year waiver of the 10% duty on car kits. Only the 11 automakers with light-vehicle plants in Mexico qualify. Each needs a bonded warehouse permit and advance import approval from the Ministry of Economy. Kit quotas grow with how many complete cars each automaker builds, and customs will track every kit-built car by VIN to keep parts out of the aftermarket. Because quotas scale with full-production volume, kits cannot outgrow an automaker's real Mexican footprint. Separately, Economy Minister Marcelo Ebrard told lawmakers he expects US tariffs on Mexican cars and steel to come down within weeks or months. He wants a 15% rate, with discounts for Mexican content.
Mexico's auto parts group, INA, says the decree needs rules to protect the parts Mexican plants already supply. Without them, it warns, the shift of suppliers from Asia to Mexico could slow. The Ministry of Economy says rules will follow. Eric Ramírez of Urban Science says the lack of any local content rule undercuts a supplier base built over more than 60 years, since automakers need not buy from Mexican plants. Olinia, the government's own EV brand, will use Asian parts until Mexico's chip and electronics supply chain matures.
Prime Minister Mark Carney and Ontario Premier Doug Ford have pledged about $6.2B for the province's auto, steel and critical minerals sectors as they absorb US tariffs. About $1.8B goes to autos, to help automakers shift to EVs. A new steel fund of about $3.7B over five years will help mills sell beyond autos, their main market today, backed by tougher action on dumping. Another $710M in federal money will build roads to the Ring of Fire minerals region in northern Ontario. The plan comes as Stelco plans up to 500 layoffs at Hamilton and Lake Erie. Industry Minister Mélanie Joly has pressed owner Cleveland-Cliffs to keep the job pledges it made when it bought the company in 2024. Stelco's Hamilton and Lake Erie operations make flat-rolled steel, much of it sold into the automotive sector.
France and Germany have agreed to a joint position that would soften the EU's 2035 car CO2 rules and widen who counts as European. The 2035 target would stay at a 90% cut from 2021 levels, but without the offsets the European Commission proposed, such as low-carbon steel and alternative fuels. For automotive, "Made in EU" would cover the 27 members plus partners in the internal market on Jan. 1, 2020, including the UK. That would depend on full reciprocity and alignment with EU trade protections, which could mean UK limits on Chinese EVs and hybrids. The definition would include the UK but still exclude Turkey and Morocco, the supplier bases Issue #504 flagged alongside it. The plan also proposes multi-year compliance periods and zero-emission status for cars running on renewable fuels.
The European Parliament's three main groups have struck a different deal, setting an 87.5% cut for cars in 2035 plus a 7.5% top-up from production using low-carbon EU steel, and an 80% cut for vans. For 2030, the car target stays at 55%, averaged over 2029 to 2031, and the van target falls to 35% from 40%. Small, affordable EVs could earn super-credits. The groups still have to sign off, and Parliament and member states must then agree on a common text. The steel top-up turns low-carbon EU steel into a compliance credit, which gives automakers a reason to pay for it and suppliers a reason to document it.
Supply Chain
Tesla says battery supply held back its car sales in the third quarter, and claims its biggest backlog in four years. Its own numbers are mixed:
Deliveries fell 2% to 487k
Production was 464k
Model 3 and Model Y lines ran at about 81% of capacity
Average selling prices fell.
Tesla is also sending cells to energy storage, with Megafactory Texas starting up with 50 GWh of planned capacity, and to 4680 cells for Cybercab and Semi. Its outlook ties deliveries to how it splits cars between buyers and its own fleet. Whether the limit is supply or allocation, Tesla's cells are going to storage, Cybercab, and Semi ahead of cars.
