October 25, 2021

Volume XI, Number 298

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October 25, 2021

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Foley Weekly Automotive Report: August 31, 2021

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

Key Developments

  • U.S. new light-vehicle sales in August are forecast to reach a SAAR of 13.1 million to 14.3 million units, according to estimates from J.D. Power and LMC Automotive and Cox Automotive, respectively.

  • Semiconductor factories in Malaysia are expected to face volatility into next year due to the high rate of COVID-19 cases in the nation, resulting in potential supply chain disruptions for automakers.

  • Due to semiconductor-related parts shortages, Ford has production downtime at three North American light truck plants the week of August 30, and Stellantis has production downtime of one to two weeks at four North American plants beginning August 30.Affected models include Ford’s F-150 and Stellantis’ Ram 1500.

  • Mexico cautioned that the region’s automotive sector could be negatively impacted by what it views as a stricter interpretation for content requirements by the U.S. under the rules of origin in the USMCA trade pact.

  • Ford announced its nonsite-dependent salaried workforce will not return to the office until January 2022, instead of October, due to the increasing COVID-19 caseload in many regions.

  • GM has required its U.S. salaried workforce to confidentially attest to their COVID-19 vaccination status; the requirement does not apply to the automaker’s hourly workforce.

  • Goodyear Tire & Rubber Company announced an agreement to collaborate with Cupertino, California-based Plus on autonomous long-haul trucking solutions.

  • Waymo will expand its driver-supported autonomous ride-hailing service to San Francisco; riders can participate in the test program by downloading the Waymo One app.

  • Electric vehicles and low emissions technology:

    • Electric truck maker Bollinger Motors will expand its vehicle portfolio to offer Class 4 and Class 5 commercial trucks, in an effort to provide broader options to customers.

    • Magna CEO Swamy Kotagiri predicts that after 2025, 50% of its sales will be from electrified powertrains for hybrids, plug-in hybrids and fully electric vehicles.

    • Rivian announced a confidential submission with the Securities and Exchange Commission for a proposed public listing.

    • GM will stop production of Chevrolet Bolt EVs at its Orion Assembly plant for two weeks beginning August 30 because of a battery pack shortage that resulted from an expanded recall of those vehicles due to fire risk.

Market Trends and Regulatory

  • In a recent interview with CNN, Ford CEO Jim Farley said that absentee rates at some of its factories can exceed 20%, with the return to a mask requirement at its U.S. plants cited as a contributing factor.

  • new analysis from IHS Markit found that brand loyalty for new vehicles among U.S. consumers is at its lowest rate since August 2015, with the drop attributed to declines in dealer inventory resulting from the global microchip shortage.

  • The U.S. House of Representatives agreed to vote by September 27 on the Senate’s $1 trillion bipartisan infrastructure bill.

OEMs/Suppliers

  • Nissan will extend a production shutdown at its Smyrna, Tennessee, plant by two weeks as a result of COVID-19 cases at a microchip supplier in Malaysia.

  • Bosch, in a recent interview with CNBC, emphasized the importance of developing new models for semiconductor supply chains, including longer lead times and an increased stock of certain components.

  • Toyota will raise the price of steel materials sold to suppliers by the largest amount in over a decade, according to Nikkei Asia (subscription).

  • BorgWarner invested $10 million in Series A funding in Tennessee-based renewable energy company Enexor BioEnergy LLC; Enexor converts plastic waste into thermal energy.

  • According to ACT Research, raw material and labor shortages are reducing manufacturing rates for Class 5-8 trucks, in spite of high demand, with Class 8 production particularly impacted.

  • Huawei received U.S. approval for license applications to buy chips for its automotive component business, according to unnamed sources in Reuters. The telecommunications equipment maker is subject to U.S. trade restrictions on the sale of chips and components for use in smartphones and other network devices.

  • GM confirmed a layoff at its Toledo Transmission plant that will affect 16 permanent workers and 106 temporary workers; the action intends to “align production with demand” for six-speed rear wheel drive transmissions.

Connected/Autonomous Vehicles and Mobility Services

  • Autonomous delivery vehicle startup Nuro will invest $40 million to build a manufacturing factory and a closed-course test track at the Las Vegas Motor Speedway.Companies, including Walmart, FedEx and Kroger, have tested Nuro’s robotic delivery vehicles.

  • Waymo has ended a two-year initiative to sell its lidar sensors to nonautomotive companies. The company stated that it plans to focus on developing and launching its Waymo Driver technology across its Waymo One ride-hailing unit and Waymo Via delivery unit.

  • Tesla Model 3 crashed into a parked Florida Highway Patrol car while the Autopilot advanced driver-assistance system was reported to be engaged; an investigation of the incident has not yet concluded.

Electric Vehicles and Low Emissions Technology

  • Toyota plans to manufacture “integrated dual fuel cell modules” for hydrogen-powered Class 8 trucks from a new manufacturing line beginning in 2023 at its Georgetown, Kentucky, plant.

Julie Dautermann contributed to this article.

© 2021 Foley & Lardner LLPNational Law Review, Volume XI, Number 243
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About this Author

John R. Trentacosta, Foley Lardner, Automotive Industry Attorney, Supply Chain Lawyer
Partner

John R. Trentacosta is a partner and transactional lawyer with Foley & Lardner LLP. Mr. Trentacosta is actively involved in drafting contracts commonly used in the automotive industry. He frequently represents clients in supply chain disputes, particularly automotive and supplier-manufacturer disputes. He is the chair of the firm’s Complex Supply Chain Litigation Group, former chair of the Detroit Litigation Department and founder and member of the firm’s Automotive and Manufacturing Industry Teams. He also is a member of the Commercial Transactions & Business...

313-234-7124
Ann Marie Uetz Foley Lardner Debtor Representation Bankruptcy Lawyer Foley Lardner Detroit
Partner

Ann Marie Uetz is a partner and trial attorney with Foley & Lardner LLP, where she represents clients in a variety of industries in all aspects of their contracts and business disputes. She also represents debtors, creditors and secured and unsecured lenders in all facets of restructuring. Ms. Uetz focuses her practice on business litigation and bankruptcy, two of Foley’s practice areas recently ranked by U.S. News—Best Lawyers® as “national First-Tier” practices in recognition of excellence in client service.

Ann Marie heads Foley’s Coronavirus Task Force and...

313-234-7114
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