Elm Analytics - Automotive Supply Chain Risk Digest #27 - August 12-18, 2017

​CHANGE IN MANAGEMENT

Goodyear has named former NA commercial and global off-highway technology Director Christopher Helsel as their new CTO.

INDUSTRY DIRECTIONS

As automakers push to make ever lighter vehicles, some Japanese suppliers are looking to make parts from plastics infused with wood pulp. Japanese researchers and suppliers say that the new material weights just one fifth of steel and can be five times stronger.Researchers have discovered an unpatachable security flaw that probably affects all new vehicles. The flaw would allow hackers to turn off safety features, but can only be done if the hacker has physical access to the vehicle.Porsche will be the first automaker to debut a new carbon fiber reinforced plastic wheel in 2018. The wheel is 20% lighter than an equivalent aluminum alloy wheel and, according to Porsche, are also 20% stronger.

LITIGATION

A judge has approved Takata's request to halt the prosecution of lawsuits filed by Hawaii, New Mexico, and the US Virgin Islands for 90 days while the company works on a reorganization plan.

GM has reached an agreement with its bankruptcy trust so they will continue fighting lawsuits relating to faulty ignition switches on an individual basis. The new deal saves them from having to hand over $1B in stock.More names and gifts have been uncovered in the ongoing probe into the UAW over allegations of corruption between union and FCA executives.

MERGERS, VENTURES, ACQUISITIONS

Multiple Chinese automakers may be vying to acquire FCA.

FCA is joining Intel, BMW and Mobileye to develop a platform for self-driving cars. China's Guangzhou Automobile Group, Geely Automobile Holdings and Dongfeng Motor Group have all announced that they have no plans to acquire FCA.Delphi has partnered with Israel-based laser sensor maker Innoviz Technologies to improve vehicle safety for self-driving cars.

PLANT CLOSING

dlhBowles is closing their Carrollton, Ohio plant by March 31, 2018. The plant makes components for handling automotive fluids.

PLANT OPENING

Drivetrain supplier U.S. Tsubaki is putting $38.5M into expanding their Portland, Tennessee plant. Their current Portland plant will be merged with the new 250,000sf facility upon its completion in 2018.

Stratus Plastics is opening a new $4M plant in Morgantown, Kentucky. The 165,000sf facility will house 29 full-time employees.

RAW MATERIAL COSTS

Acrylic sheet prices have risen up to 27% over the past year due to a shortage of methyl metacrylate. The shortage has led to up to 25% of global PMMA plastic production going offline this year.

REGULATION

With negotiations beginning this week, auto industry groups are looking to be an integral part in the re-negotiation of NAFTA. Key points are being able to ship parts over the border with less red tape and fighting changes to "country of origin" rules that decide tariff-free trade.

German chancellor Angela Merkel says that she doesn't want to "name an exact year" but says that Britain and France's plans to phase out gasoline and diesel vehicles by 2040 "were the right approach".Vehicle LCD displays are likely to be at the center of NAFTA re-negotiations. Currently, the screens do not contribute towards the current 62.5% country of origin requirements.At this week's NAFTA talks, automakers and parts groups from the US, Canada and Mexico are pushing back against the Trump administration's demand for higher US automotive content.

SUPPLY CHAIN

Toyota's abrupt change of plans in Mexico, where they will now build a new plant to assemble the Tacoma instead of the Corolla, has left around 70 suppliers that were planning to locate nearby needing to adjust their plans.International shipping on the Great Lakes is up 18% this year due to increase in demands for raw materials needed in the construction, manufacturing and automotive industries.