Elm Analytics - Automotive Supply Chain Risk Digest #33 - September 22 - 28, 2017
Vacuum cleaner manufacturer Dyson is investing $2.7B to launch a premium electric car by 2020. They believe their solid state batteries, which hold more power and charge more quickly than lithium-ion batteries, will give them an edge over their more established rivals.
Analysts predict the current production drops and excess inventory levels to be short lived.
As the strike at GM's CAMI plant in Ontario continues, the automaker and the Unifor labor union have started formal negotiations. Unifor is still holding strong in insisting on job security and that the plant be named lead producer of the Chevrolet Equinox.
FCA will hold settlement talks in October with lawyers representing owners of diesel vehicles who sued the auto maker over emissions that allegedly exceeded legal limits.
MERGERS, VENTURES, ACQUISITIONS
Delphi Automotive is splitting off into two companies: Delphi Technologies, and Aptiv. Delphi Technologies will be the new name of Delphi's existing Powertrain division, while Aptiv will focus on self-driving and connected vehicles.
EV Common Architecture Spirit Co Ltd is the new joint venture between Toyota(90%), Mazda(5%) and Denso(5%) to develop electric car technology.
Adient has acquired Oak Park, MI based seating supplier Futuris Group for $360m. The acquisition is expected to add $500m to Adient's annual revenue.
Could Hyundai be looking to buy FCA?
Auto cable manufacturer MD Electronics is closing its Jamestown, NY plant and laying off 87 workers by year's end.
Toyota is making investments in 5 existing US plants to support its North American hybrid powertrain.
Volvo is investing an additional $520m into their currently under construction manufacturing site in Ridgeville, South Carolina bringing the investment total to over $1b. The plant will employ around 4000 workers.
South Korean steelmaker POSCO has opened a new $21m, 80,000sf facility in Jeffersonville, Indiana that will produce automotive fasteners and employ 60 people.
Italian Magneti Marelli will build a car factory in Tangier, Morocco to open in 2019.
GM is laying off the third shift at its Spring Hill, TN plant in response to slow sales and rising inventories. Many may be surprised by the move considering GM had just hired 650 and added the third shift in January.
UK car production has fallen for a fourth month; down 5.3%. Lower domestic demand and a slow Brexit are being blamed.
Russian auto factories are returning to production after an economic recovery.
Peugeot started assembly of vehicles this week at Kenya Vehicle Manufacturers'(KVM) factory in Thika, Kenya.
As a part of their strategic shift into the EV market, Volkswagen is looking to secure long-term supplies of cobalt to be used in batteries. Cobalt industry sources that that VW is asking producers to submit proposals for supply for up to 10 years from 2019.
China's ambitious policies for zero / low emission vehicles now looks a little less ambitious. New policy updates allow automakers to obtain credits in a cap-and-trade program. Changes also limit the rules to automakers with sales over 30k units.
2017's US automotive factory investment is about half of its average despite the Trump Administration's pressure.
As NAFTA negotiations continue, watch for minor changes that could have a major impact on procurement and logistics. Proposed changes to content calculations around rules of origin could have a ripple effect on automotive supply chains.
Supply chain professionals disagree about the value of increased data collection.