Discover more from Automotive Supply Chain Risk Digest
Elm Analytics - Supply Chain Risk Digest #7 - March 25 - 31, 2017
CHANGE IN MANAGEMENT
After 12 years as the head of American Honda's vehicle operations, John Mendel is retiring and being replaced by Jeff Conrad.
Nissan is making more job promotions moving US executives to global roles. Fred DePerez (division general manager for light commercial vehicles [LCV]), Rich Miller (program director for LCV), and Allyson Witherspoon (Nissan global brand management).
Ford will take a $295 million hit to its first quarter earnings due to two product recalls. One involves engines that could catch fire and the other is a persistent door latch problem.
With vehicle recalls at an all time high, parts supplies need to get their "houses in order" to avoid costly fees and lawsuits.
MERGERS, VENTURES, AQUISITIONS
Indian auto parts maker Motherson Sumi Systems has acquired Finland's PKC Group for $619 million. The deal will help Motherson expand its footprint significantly in American and European commercial vehicle market segments.
German supplier Bruss is for sale in a potential $645m deal. Bruss supplies sealing systems to Ford, VW and Daimler.
Everlight has opened a new automotive LED plant in Miaoli, Taiwan. The new plant is expected to reduce manpower and logistic processes while maximizing production efficiency to 200 thousand units per month.
Plans for a major new auto hub in Abu Dhabi have been unveiled. Stretching over 12 kilometers of land, the new city will have up to 1,800 plots available for use as car showrooms, service centers, workshops, warehouses, and for other light industrial purposes.
Hyundai is idling its factory in Cangzhou, China from March 24 to April 1 due to concerns over a political spat.
Tower Automotive will expand two plants in Kentucky (Sheperdsville and Bardstown).
Honda Manufacturing of Alabama will invest $85 million in their plant to improve vehicle manufacturing flexibility, strengthen the logistics efficiency for future models and prepare for future technologies.
Ford is investing $1.2 billion in three of their Michigan plants. $850 million will go to its Michigan Assembly plant to make the new Ford Ranger and Ford Bronco,
RAW MATERIAL DISRUPTION
A crackdown on illegal slaughterhouses in India and poor market conditions in Europe are driving up the price of leather.
California will move forward with vehicle pollution targets set forth by the Obama administration, despite President Trump's move to put those targets on hold.
Thailand has announced a package of tax incentives to promote local production of electric and electric hybrid vehicles.
Morgan Stanley warns that a third of the risky car loans bundled into bonds are considered "deep subprime." With consumers falling behind on car loans, risk is increasing.
Audi halted production at its Ingolstadt, Germany factory this week due to a parts shortage after a fire at a supplier that makes front wall cladding. Due to the halt, Audi will lose around 5,600 vehicles this week.
A new initiative from CSR Europe calls on automakers to ensure that their supply chains provide decent working conditions for employees while minimizing environmental impact. BMW and Volkswagen are acting as lead partners along with eight other participating automakers.
More fallout for Takata's faulty airbag inflators. Toyota recalled 2.9m vehicles in Japan, China and Europe this week, along with Subaru, Mitsubishi and Hino.