Elm Analytics - Automotive Supply Chain Risk Digest #173 - May 29 - June 4, 2020
Pace Industries has emerged from bankruptcy. The die casting supplier filed for Chapter 11 protection in April 2020 to restructure debt.
Despite reopening showrooms, new car sales in Italy fell by 50% in May.
New car sales in Britain dropped by an annual 89% in May, marking the weakest May for sales since 1952.
It has been a big week for Renault, which will cut 15k jobs worldwide as part of its $2b cost-cutting plan. The company also finalized a $5.6b loan from the French government.
Mexico is attempting to balance a growing number of Covid-19 infections with its economic impact.
Analysts at AlixPartners predict it could take the automotive industry five years to recover from three months of coronavirus damage.
A new study from the Institute for Highway Safety found that self-driving cars could only prevent a third of crashes in the U.S. The remaining 2/3 of crashes were caused by mistakes that autonomous systems do not handle better than human drivers.
Startup Electreon Wireless piloting a project to electrify roads that charge EVs while driving.
UAW Local 249, which represents workers at Ford's Kansas City assembly plant, took to Facebook this week to say that the automaker is "...backsliding on its public commitment to put people over production and profits during the ongoing COVID-19 crisis". There have been multiple confirmed positive cases at the plant since it restarted production late last month.
A U.S. appeals court ruled this week that VW cannot escape potential fines from two counties in Florida and Utah regarding the automaker's diesel emissions scandal. The court found that nothing in the Clean Air Act is "...intended to place manufacturers beyond the reach of state and local governments".
Honda recalled 1.4m vehicles due to faulty fuel pumps that could cause engines to stall or lose power. The recall affects 136k vehicles in the U.S., which are part of a more extensive recall of fuel pumps made by Denso.
Former UAW President Gary Jones pled guilty to charges of racketeering and embezzlement as part of a plea deal with federal prosecutors. Jones faces up to five years in prison and up to $250k in fines.
MERGERS, VENTURES, ACQUISITIONS
VW is betting big on the Chinese EV market with a $1.1b investment in JAC Motors and another $1.1b investment into battery maker Guoxuan High-Tech Co. The automaker will have a 75% stake in JAC and a 26% stake in Guoxuan.
Volkswagen also finalized a $2.6b investment into Pittsburgh self-driving startup Argo AI.
Renault is hoping to reinvigorate its partnership with Daimler. No new projects have been announced since the partnership ground to a halt in 2016.
Ford has restarted its facilities in Mexico this week.
Seat shortages temporarily shut down F-150 production at Ford's Dearborn, Michigan truck plant.
As part of a stimulus package to boost car sales, Germany will provide $6.7k of subsidies for new EVs buyers. Buyers will also benefit from a temporary 3% sales tax reduction.
The EU is warning automakers to make significant cuts to emissions to meet new requirements. The average emissions of new vehicles were 120.8g of CO2 per km - much higher than this year's target of 95g.
Center for Automotive Research: June Update: Restarting Automotive Manufacturing After the Coronavirus Pandemic