Recent Automotive News – More cancellation and closures, GMs Solution Summit and more.

Great news the chip shortage is over and the automotive industry is pretty much back to normal…. PSYCH!  Nothing has gotten any better over the last week. Auto manufacturers are still struggling to get parts and cancelling even more orders, not to mention the world dealing with the tragic events in the Middle East still unfolding.

Chip manufacturing giant in Japan, Rohm Co, said their efforts to catch up to demand will last through 2022.  In an interview with Bloomberg last week, Rohm’s CEO Isao Matsumoto said,” All of our production facilities have been running at their full capacity since September last year, but orders from customers are overwhelming,”. He also stated “I don’t think we can fulfill all the backlog of orders next year”. Rohm’s customers include Ford, Toyota and Honda. Microchips on average are taking 20+ weeks to receive from manufacturers. This is by far the longest lead time since the data has been recorded. Rohm is planning on investing more than $500M in increasing their capacity this year but even with that huge investment it still looks like things may continue to be rocky until late next year or even out to 2023. 

GM held their solutions summit this week in Dallas. Most of the focus was on GM’s new zero, zero, zero initiative. This initiative is for a world with zero crashes, zero emissions, and zero congestion. This summit is mainly targeted at businesses and fleets. Many of which are finding it almost impossible to get the current inventory that they need from GM to keep their businesses going right now. GM seems to be pitching them some blue skies BS telling everyone to keep looking far into the future so they do not see the massive failure of production right now. Remember these manufacturers were talking earlier this year about getting production smoothed out by Q3 of this year. Here we are with only a few weeks of Q3 left and now they are talking about plans for 2030? It sure feels that GM right now is more interested in selling stock and an image instead of producing vehicles.

Ford is now delaying their return to work plans for employees that are currently working from home until early next year. This plan has been moved back several times already and with the rise in Covid-19 case it was very much expected to be pushed back again. Ford is also kicking around the idea of mandating vaccines for employees. They already require anyone that travels internationally to work to be vaccinated and they are assessing if broader mandates are appropriate. 

GM is requiring all 42,000 salaried employees to disclose vaccination status to the company.  They are claiming that this is so they can use the information to help make safety protocols.  Can a company require you to disclose medical information? It seems like this could be a hipaa violation but what do I know? I am definitely not a lawyer.

GM’s relationship with their battery manufacturer, LG, is being put to the test. GM is facing another recall on their electric car the Bolt for batteries catching fire. This is the third recall this year for this issue. This in total is expected to cost more than $1B and the two company’s relationship will be performing a joint investigation as to who will be left with the bill.  This has the potential to go trash this relationship and maybe will even wind up in court.