Automotive Supply Chain Risk Digest

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Elm Analytics - Automotive Supply Chain Risk Digest #280 - June 17 - 23, 2022

automotive-risk-digest.elmanalytics.com

Elm Analytics - Automotive Supply Chain Risk Digest #280 - June 17 - 23, 2022

Jun 24, 2022
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Elm Analytics - Automotive Supply Chain Risk Digest #280 - June 17 - 23, 2022

automotive-risk-digest.elmanalytics.com

CHANGE IN MANAGEMENT

Jim Rowan, Volvo's new CEO, has named Bjorn Annwall and Javier Varela deputy CEOs and moved four of eleven executives out of the highest management tier.

Mercedes-Benz named former McKinsey partner Paul Gao its chief strategy officer.

Stellantis named former GM exec Tobin Williams its senior VP for human resources in North America.

EXPANDING

BMW is spending $1B to expand its Steyr, Austria, plant to produce EV drivetrains (its second location).

HUMAN CAPITAL

The Uyghur Forced Labor Prevention Act goes into effect this week, barring products made in Xinjiang, China. NYT digs deeper into the forced labor issues surrounding the EV supply chain.

Meanwhile, VW is facing scrutiny about its operations and suppliers' human rights and labor practices in Xinjiang, China.

Elon Musk's statements about staffing have been confusing at best. This week, he clarified Tesla is cutting 10% of salaried employees while attempting to grow hourly. Overall, this equates to a 3.5% workforce reduction.

However, Tesla may face difficulty filling 12k jobs at its Gruenheide, Germany plant. The labor union, IG Metall, says the current 3k workers have wages that are 20% less than rivals.

LABOR DISPUTE

Workers from FCA Serbia's plant in Kragujevac protested layoff and relocation plans. Production will shut down until 2024, when the plant reopens to make EVs.

LITIGATION

Tesla faces a lawsuit from laid-off workers alleging the company failed to follow the WARN act. The legislation requires companies to provide 60-days notice for any mass layoff of 50 or more workers.

French Renault and Nissan owners are taking legal action over the performance of their 2012-18 1.2L, 4cyl gas engines.

OPENING

Ford has selected Valencia, Spain, as its new European EV manufacturing base. The Almussafes plant, built in 1976, will be restructured to support its new EV architecture.

PRODUCTION DECREASE

Toyota dropped 50k vehicles from its July production plan due to COVID-related and semiconductor parts disruptions.

Tesla CEO Elon Musk's two newest factories in Texas and Germany are struggling with producing new types of batteries and COVID shutdowns.

"Both Berlin and Austin factories are gigantic money furnaces right now. Okay? It's really like a giant roaring sound, which is the sound of money on fire."

PRODUCTION INCREASE

BMW's Lydia plant in Shenyang, China, has officially begun producing EVs.

REGULATION

The US Senate passed a rare bipartisan bill to subsidize US semiconductor production in June 2021. A year later, the bill is still stagnating in the House, and now chip manufacturers are looking to build overseas instead.

Germany is still deciding if it will join the 2035 EU ban on selling ICE vehicles.

RISK ANALYTICS

AlixPartners: 2022 Global Automotive Outlook Overview

SHUTDOWN

Stellantis has shut down its crucial Melfi plant in Italy again due to semiconductor shortages. In all, the plant has operated for only seven days in June.

The company will also close two French plants temporarily due to chip shortages - Citroen (Brittany) & Peugeot (Sochaux)

Tesla's Shanghai, China, plant will suspend production for the first two weeks of July. The plant will use that downtime to make updates to support a boost in production.

GM will pause production at its Factory Zero for four weeks to expand its capacity.

In 2025, Ford is shutting down production at its Saarlouis, Germany, assembly plant that produces the Focus.

SUPPLY CHAIN

Center for Automotive Research: Automotive Supply Chain Update

VW will leave the option to run its plants on coal due to potential natural gas disruptions from Russia.

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Elm Analytics - Automotive Supply Chain Risk Digest #280 - June 17 - 23, 2022

automotive-risk-digest.elmanalytics.com
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