Elm Analytics - Automotive Supply Chain Risk Digest #157 🎂- February 7 - 13, 2020
CHANGE IN MANAGEMENT
Ford president of global automotive, Joe Hinrichs, abruptly retired in a management shakeup.
Daimler reported a staggering 64% drop in full-year profits for 2019 to $2.9b, down from $7.8b in 2019. Much of the decline can be attributed to the $4.2b in charges the automaker took due to diesel-related investigations and the associated legal costs.
Daimler is reportedly planning to cut up to 15k jobs by the end of 2022. The cuts would reduce staff costs by around $1.5b.
Karma Automotive will layoff 60 people at its headquarters in Irvine, California, and an unspecified number of workers at its manufacturing plant in Moreno Valley, California. The jobs will be eliminated by Apr 7.
The US Justice Dept. is abandoning its antitrust probe of four automakers that signed a deal with California to voluntarily meet the state's emissions targets. The automakers that signed the agreement were Ford, Honda, BMW, and Volkswagen.
Tesla recalled 15k Model X SUVs over an issue that can lead to a loss of power steering assist.
Two articles of interest from the Michigan Bar:
The first is an article that covers Best Practices to Avoid Liability for Your Supplier's Freight Costs.
The second is a brief that discusses contractual language when indefinite quantities contracts are binding requirements contracts.
MERGERS, VENTURES, ACQUISITIONS
Chinese automaker Geely is considering merging with its parent company's subsidiary Volvo to boost scale and create "a strong global group."
Canoo and Hyundai announced they would co-develop an electric vehicle platform. The platform is based on Canoo's skateboard technology and will be used in Hyundai and Kia EVs.
California's HAAH Automotive is forming a joint venture with China's Chery Automobiles. The new company, Vantas, will build, distribute, and sell new vehicles in the US.
Chinese PSA Group steering systems supplier Huida Manufacturing has obtained a "force majeure" certificate to avoid penalties for breaching contractual obligations due to the Coronavirus.
BASF announced it would produce cathode material for 400k EVs at a new plant at Schwarzheide in Brandenburg, Germany.
Magna Steyr will halt production of the Jaguar I-Pace at its plant in Graz, Austria, next week due to a shortage of EV batteries made by LG Chem in Poland. LG Chem produces cells for several automakers, including Mercedes, Jaguar, and Audi.
Nissan is halting production at its Kyusuhu plant in Japan because of a shortage of Chinese parts due to the coronavirus outbreak. The work stoppage could affect the output of around 3k vehicles.
Renault subsidiary RSM will suspend production at its plant in Busan, South Korea, from Feb 11-15 due to supply chain disruptions in China stemming from the coronavirus outbreak.
White House economic adviser Larry Kudlow said late last week that any US decision to impose tariffs on cars and auto parts imported from the EU is on hold amid attempts to reach a new US-EU trade deal.
Honda is planning to restart vehicle and component production at its plants in China on Feb 17, following the extended Lunar New Year holiday due to the Coronavirus outbreak. The automaker says some employees have returned at five of its plants and that they are taking steps to ensure the safety of its employees before resuming production.