Elm Analytics - Automotive Supply Chain Risk Digest #87 - October 5 - 11, 2018

CHANGE IN MANAGEMENT

Delphi CEO Liam Butterworth is stepping down after only 10 months in the position to "pursue other interests". The company has appointed one of its directors, Hari Nair, as interim CEO.

After being passed over for the job of CEO, Daimler CFO Bodo Uebber has decided to leave his position with the automaker once his contract expires in December 2019. 

After just a month on the job, Axalta Coating Systems CEO Terrence Hahn is being ousted over conduct that the company says was "inconsistent with its policies.". CFO Robert Bryant has been name interim CEO.

Audi's North American president Scott Keogh has been chosen as the new CEO of Volkswagen's North American operations, starting on Nov. 1. Keogh will succeed Hinrich Woebcken and will be the first American to hold the job in 25 years.

LITIGATION

General Motors has filed a federal lawsuit against Johnson Controls claiming they owe the automaker over $28m. They say that the supplier failed to cover costs linked to warranty claims on their batteries for GM model year 2015-16 vehicles.

Subaru of America is recalling 27,000 of its Outback and Legacy models in the U.S. over a faulty parking brake. The recall covers 2010-2014 model year vehicles equipped with manual transmissions.

MERGERS, VENTURES, ACQUISITIONS

Bloomberg: Daimler is in talks with Geely to form a ride-hailing / carsharing joint venture. The strategic move may help position Daimler for a Chinese-European alliance with reduced knowledge sharing risk.

BMW is paying $4.2b to take a 75% stake in its Chinese JV Brilliance China Automotive Holdings Ltd. This move makes them the first automaker to take majority ownership of a JV as Beijing starts to relax ownership rules.

Volvo is expanding their partnership with chipmaker Nvidia by including their Drive AGX Xavier technology in its next-gen cars to make them capable of Level 4 autonomous driving. Level 4 still includes a steering wheel and pedals for the driver to take control when needed.

PLANT DISASTER

An employee at Ford's Dearborn, Michigan Engine Plant sustained a head injury after becoming trapped in machinery.

PLANT OPENING

Mercedes-Benz has started building a new battery plant near their assembly plant in Tuscaloosa, Alabama. The plant is expected to be operational next year.

Flex-N-Gate has officially started production at its new $160m plant in Detroit, Michigan with half of the workforce being Detroiters. The plant will build vehicle front-end parts for cars such as the Ford Ranger.

BMW's Chinese JV BMW Brilliance will build a third plant in Shenyang, China. The new plant was discussed in a recent meeting between Chinese Premier Li Keqiang and BMW chief executive Harald Kruger.

Magna International has opened a new seating systems plant in Chomutov, Czech Republic. The plant is around 64,500sf and has an annual production capacity of over 360,000 seat sets per year.

PLANT SHUTDOWN

Jaguar Land Rover is shutting down its Solihull, England plant for two weeks starting October 22 following a 46% drop in sales in China. Sales in China accounted for a quarter of the automaker's sales last year.

Spectrum Decorative Finishes Inc., a subsidiary of Spectrum Industries, is relocating its Grand Rapids and Kentwood, Michigan facilities to Kentucky. The supplier produces plastic components and will close the facilities by December 31, 2018.

RAW MATERIALS

France's automotive plastic parts supplier association, GPA, is warning of an impending shortage of materials key to producing nylon. They say the problem is mainly due to low supply of adiponitrile, a chemical that is used in nylon production.

A 2015 plant explosion may now be at the root cause of the nylon 6,6 shortage. The majority of Nylon 6,6 is used in automotive applications - molded into intake manifolds, electrical components and oil pans.

REGULATION

Automotive News: China trade war: Assessing the casualties 

The National Highway Traffic Safety Administration is proposing to permit adaptive driving beam headlights on new cars. The advanced lights essentially operate as high-beams at all times, but automatically dim portions of the beam when its sensors detect oncoming vehicles.