Elm Analytics - Automotive Supply Chain Risk Digest #90 - October 26 - November 2, 2018
CHANGE IN MANAGEMENT
Hyundai Motor America has named William Lee as its interim president and CEO, replacing Kenny Lee who resigned after just over a year on the job. Former CEO Lee is returning to South Korea in an advisory role for the automaker.
Faraday Future co-founder and SVP of Product R&D Nick Sampson is stepping down from the automaker. The decision follows recently announced layoffs, wage cuts and a move to ask some employees to take unpaid leave.
Volkswagen has reported a 19% drop in third-quarter profits due to weaker vehicle sales and more stringent emissions rules in Europe. Despite the drop, the automaker has reiterated their goals for the year and is not changing their forecasts.
As part of a cost-saving effort, General Motors is offering buyouts to 18,000 of its salaried workers in North America with 12 or more years of experience. Employees have until Nov. 19 to opt into the voluntary severance program.
A lawsuit filed by a Florida driver alleges that Tesla is overstating the safety of the Autopilot system built into its vehicles. The driver, who was injured in a crash, claims that the system poses "an inordinately high risk of high-speed collisions.".
MERGERS, VENTURES, ACQUISITIONS
Volkswagen and Microsoft are collaborating to build the "Volkswagen Automotive Cloud" which will house all future Volkswagen digital services and mobility offerings.
Chinese luxury car-brand Hongqi (Red Flag) is launching a fully autonomous passenger car in partnership with Baidu next year. The cars will be produced in limited numbers for a pilot program in 2019 before a wider release in 2020.
Baidu is also teaming up with Volvo to mass produce Level 4 autonomous vehicles.
Toyoda Gosei is buying a 60% stake in Hubei Rock Rubber and Seal Technology Co. Hubei Rock supplies weatherstrips to Dongfeng Motor Corp.
Ride control and emissions systems supplier Tenneco is closing its plants in Ontario, Canada and Hartwell, Georgia as part of the restructuring of its North American ride control operations. The company plans to start transferring work to its Kettering, Ohio facility this year and expects complete closure or the two Georgia plants near the end of Q2 2020.
800 cars were destroyed at the Italian port of Savona after storm flooding triggered EV lithium-ion batteries to catch fire.
Ford Edge interiors supplier, NYX, is expanding its facility in Livonia, Michigan.
Canada's Pounds of Plastic Inc will open a manufacturing operation in Frankfort, Kentucky. The plant will produce custom polymers and thermoplastics.
German connectors supplier, Kostal Kontakt Systeme, will build a new 130k sf facility in Rochester Hills, Michigan.
Chinese automaker King Long is building a bus and truck assembly plant in Lahore, Pakistan. The plant will be a JV with Pakistan's Shine Autos and attract an investment of $200m.
Fuel Total Systems is opening a new $60.9m plant in Mt. Pleasant, Tennessee. The 110,000sf facility will make plastic fuel tank systems and other parts and will create 150 jobs.
Honda has formed a JV with Chinese automaker GAC Group to build a new-energy vehicle production plant in China. The $430m plant will have a production capacity of 170,000 new-energy vehicles a year, including all battery EV's and plug-in hybrids.
FCA is idling production at its minivan plant in Windsor, Ontario, Canada for one week starting on October 29. The automaker says the stoppage is to help "adjust inventories".
FCA has extended production shutdowns at its transmission plants in Kokomo and Tipton, Indiana through the week of Nov. 5. The plants have already been shutdown for over two weeks this month.
The auto industry is pushing back on the Trump administration's tariffs on imported steel and aluminum saying that they need more time to develop new sources for affordable domestic production. Shiloh Industries' CEO Ramzi Hermiz says "It's difficult, if not impossible, to fund the cost of those tariffs as well as...to localize that production".
According to the Wall Street Journal, the FBI is looking into whether Tesla gave misleading information about their Model 3 production forecasts.
Volkswagen may purchase a stake in Russia's Gaz Group to help the automaker to avoid US sanctions related to billionaire Oleg Deripaska.
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