BANKRUPTCY

The Detroit Bureau: Hertz Chapter 11 Filing Poses Challenge For Automakers - and Used Car Buyers

CHANGE IN MANAGEMENT

Suffering from deep losses, Aston Martin is shaking-up management. Tobias Moers, CEO of Mercedes-AMG, taking over Andy Palmer's position as Chief Executive in August. Palmer had reportedly not been informed of the announcement.

Likewise, Daimler has appointed Phillipp Schiemer as the CEO of its high-performance subsidiary AMG. Schiemer will move from his current position as the head of Mercedes-Benz Brazil on August 1.

EARNING DIP

Nissan is reporting a loss of $6.2B for 2019, its first full-year deficit in 11 years. While coronavirus accelerated the decline, the automaker was affected by product problems and internal conflicts following former head Carlos Ghosn's arrest last year.

HUMAN CAPITAL

ZF Friedrichshafen plans to slash 15k jobs by 2025. This 10% reduction is tied to decreased customer demand.

To save $2.2B in costs, Renault expects to cut 5k jobs by 2024. The automaker said they would prioritize "the non-replacement of employees planning to retire" before resorting to layoffs.

Supercar maker McLaren is cutting more than 25% of its staff due to a drop in demand during the coronavirus crisis. The vast majority of the nearly 1.2k job cuts will be in the UK.

INDUSTRY DIRECTIONS

After previously pushing back the New York auto show to August, organizers canceled the event. The venue, The Javits Convention Center, remains set-up as an active hospital.

LITIGATION

Automakers including Hyundai, Kia, BMW, Mercedes-Benz, FCA, Audi, and Volkswagen recalled nearly 550k vehicles across 126 models in South Korea over defects. The defects differ depending on the model, but most are safety or fire hazard-related.

Two separate coalitions consisting of 23 states and a dozen environmental groups sued the Trump administration this week over its March 2020 rollback of Obama-era fuel efficiency standards. The rollback brought requirements down from "55 mpg by 2025" to "40mpg by 2026".

MERGERS, VENTURES, ACQUISITIONS

The Renault-Nissan-Mitsubishi Alliance has announced a new deal that will see the three automakers increasing their sharing of platforms, technology, and production. Alliance chairman Jean-Dominique Senard says the agreement will cut the costs of developing new models by up to 40%.

UK Companies AMTE Power and Britishvolt have announced plans to invest up to $4.9B into building the country's first large scale EV battery cell factory by 2023. Initial yearly production capacity would be 10GWh, rising to 30GWh in the future.

PLANT CLOSING

As a result of a $6.2B reported loss for 2019, Nissan is closing its plants in Indonesia and Spain. The automaker will move its Indonesian production to Thailand, while the closure of its plant in Barcelona will result in a loss of around 3k jobs.

Brake line maker Flexitech is closing its plant in Bloomington, Illinois, next year. The closure will put 139 employees out of work.

PLANT SHUTDOWN

The Mexican state of Puebla said late last week that conditions "do not exist" for the automotive industry to restart production. The official decree said the state government would keep orders in place until sanitary and safety conditions permit a restart.

PRODUCTION INCREASE

GM's plans to double pickup output stalled due to shortages of Mexican parts this week. However, assembly will restart Monday at its Arlington and Fairfax facilities. These openings join the many US plants that are increasing shifts.

RAW MATERIALS

Researchers have developed a new magnesium alloy that they say has the potential to replace steel and aluminum alloys used in automobiles, while also making them more fuel-efficient.

REGULATION

France has announced $8.8B in stimulus efforts to help the country's automotive industry recover from massive losses during coronavirus lockdowns. Starting next week, car buyers can get up to €12k for purchasing an electric vehicle.

RISK ANALYTICS

Restructuring financing may become harder to come by for automotive suppliers. Scott Eisenberg, of restructuring advisory firm Amherst Partners, says, "If we have this second (coronavirus) wave in the fall, the access to capital that everyone had in March won't be the same in September and October."

SUPPLY CHAIN

An 85% drop in automotive volume this quarter has forced rail companies to slash capacity.