Foley Automotive Report – May 2022 – 2 | Foley & Lardner LLP – JDSupra – JD Supra

May 20, 2022 by No Comments

Analysis by Julie Dautermann, Competitive Intelligence Analyst

This report helps automotive suppliers inform their legal and operational decisions to help address challenges and opportunities.

Key Developments

  • A Supplier Alert from Foley & Lardner shared key points involving the decision by Stellantis to rescind unpopular new purchase order terms and conditions.
  • LMC Automotive estimates U.S. new light-vehicle sales reached 4.55 million units in the first four months of 2022, representing a decline of 16% from the same period in 2021, but up by 8% from 2020.
  • The semiconductor shortage has resulted in the loss of nearly 1.7 million units of global production this year, according to AutoForecast Solutions quoted in The Detroit News.
  • Toyota indicated high raw material costs and ongoing semiconductor shortages could reduce its next full-year profit by roughly 20%, while noting ongoing economic uncertainty made it difficult to provide a forecast.
  • Crain’s Detroit (subscription) reports recent earnings results from several major automotive suppliers reflect the continued impact from inflation and production volatility.
  • U.S. heavy-duty truck and trailer orders were down by double digits in April, resulting from manufacturers maintaining tight control over orders amid parts shortages and supply chain uncertainty.
  • Ford, GM and Stellantis plan to reinstate mask mandates at facilities in Michigan counties with high risk for COVID-19 transmission.
  • According to a recent blog post by Foley & Lardner, Mexico’s antitrust commission (“COFECE”) has recently fined “companies in the auto parts industry more than 9 million Mexican pesos for failing to notify two concentrations on time.”
  • Bloomberg reports GM will raise wages by 8.5% at its truck plant in Silao, Guanajuato as part of a new labor agreement with union SINTTIA. 
  • Electric vehicles and low emissions technology:
    • The CEOs of automakers including Stellantis, Tesla and Volvo have warned component shortages and higher raw material prices could present significant risk to EV supply chains.
    • The U.S. Department of Energy announced a $45 million program to support domestic production of advanced EV batteries. The Electric Vehicles for American Low-Carbon Living program includes investments to create batteries with faster charging times, and improved resilience and energy efficiency.
    • Bollinger Motors will partner with Roush Industries to manufacture all-electric commercial platforms and chassis cabs.
    • The Alliance for Automotive Innovation released a policy framework to address the reuse, repurpose and recycling of EV battery components.

Market Trends and Regulatory

  • Passenger car sales in China fell by 35.7% in April compared to the same period one year ago, according to estimates from the China Passenger Car Association.
  • The Wall Street Journal reports record-high diesel prices are straining operational costs for trucking companies and exacerbating high transportation costs throughout supply chains.

OEMs/Suppliers

  • Due to the semiconductor shortage, Stellantis and Ford temporarily idled production last week at plants in Illinois, Kentucky and Ontario.  Affected models included the Jeep Cherokee, Ford Escape, Ford Edge, Lincoln Corsair and Lincoln Nautilus.
  • Stellantis temporarily halted production at its …….

    Source: https://www.jdsupra.com/legalnews/foley-automotive-report-may-2022-2-7895944/

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