Bottlenecks are bad things to experience. Around 70,000 years ago, the Toba supervolcano eruption reduced humanity to anywhere from 1,000 to 10,000 breeding pairs — thus creating a genetic bottleneck — alongside a global cooling event concurrent with the Last Glacial Period.
For automakers in the United States and their North American supply chain, their Toba event is coming.
For the third consecutive year, consumers around the world prefer to paint their world in white when they shop for their chariot of choice.
Be afraid. Be very afraid. If the aspirations of one automotive supplier come to pass, your child’s first car will not have a steering wheel come 2025, rendering her or him nothing more than a mere passenger inside a tiny commuter pod.
Source: United States Department of Justice
Nine Japanese auto suppliers and two executives have agreed to plead guilty and pay more than $740 million in fines for participating in a price fixing conspiracy, the U.S. Department of Justice said yesterday. The two executives, one an American citizen, the other Japanese, will have to serve prison terms. According to the DoJ, thirty different components were involved and they were sold to all three domestic automakers as well as the U.S. operations of Honda, Mazda, Mitsubishi, Toyota and Fuji Heavy Industries, which owns the Subaru brand. The automakers have cooperated with the investigation. More than 25 million vehicles sold in the U.S. were affected by the conspiracy, raising costs to automakers and consumers alike, U.S. Attorney General Eric holder told a press conference in Washington yesterday. Read More >
Denso, the automotive electronics supplier with close ties to Toyota, has signed an agreement to buy $25.4 million worth of stock in the Sharp consumer electronics company. According to Automotive News, Denso says that the goal is to create new technologies that “improve the comfort, safety and convenience of vehicles by integrating vehicle technologies with home electronic technologies.”
Visteon, the large automotive supplier, continues to reshape itself from a vendor of interior trim to one that focuses on electronics. Visteon announced that it is selling its half of Yanfeng Visteon Automotive Trim Systems to it’s Chinese joint venture partner Huayu Automotive Systems, for ~$1.2 billion. At the same time, Visteon will be buying majority ownership of the JV’s electronics unit, Yanfeng Visteon Automotive Electronics Co., for $68 million. Read More >
Carmaking is a cyclical business. In crisis times, it’s “we are all in this together.” When business improves, relations between automakers and their suppliers revert to the old arrogance, to hurry up, make more for less. It’s that time again. Read More >
Ford and GM co-signed a $6.5 million loan in an effort to pull a key Australian parts supplier from the brink, Reuters says. Read More >
The demise of a large Australian auto parts supplier threatens to bring Australian units of Ford and GM to their knees as early as next week. Management is working feverishly on keeping the doors open, while complaining about “lack of support from key players in the industry,” Reuters says. Read More >
Selling overpriced “Original” parts can be like printing money. I know carmakers that generate 30 percent of their profits out of parts sales. How do you drive parts sales? By forcing customers to stay as long as possible with your dealer, a money pit the customer tries to flee as early and as quickly as possible. The golden fleece in the business are repairs only an authorized dealer can perform, using overpriced parts only the authorized dealer has. Countless attempts have been made to break this monopoly. Another attempt is on the way. Read More >
At the beginning of this year, the United Auto Workers pledged that it would launch a campaign to organize the foreign-owned, non-union “transplant” factories in the US, threatening to tar uncooperative automakers as “human right abusers.” The campaign initially lost steam, but the UAW stuck to its pledge, re-iterating on several occasions that it would organize “at least one” transplant factory by the end of 2011. With one month left to accomplish that goal and no signs of progress in sight, the UAW has officially called off that goal. In fact, the UAW now hopes to simply pick an automaker to target by the end of 2011. Spokeswoman Michelle Martin tells Bloomberg
At this point, our hope is to make a decision about who we’re going to target by the end of the year. But obviously, we won’t have the organizing campaign completed by the end of the year.
This is not too surprising, considering the UAW announced last week that it would be focusing on dealership pickets initially rather than factory organizing. And sure enough, the first dealership picket has begun, targeting Hyundai dealerships. And yet, says Martin
This has nothing to do with the domestic organizing campaign. Hyundai is not the target.
Huh? If the UAW is not committing to organizing Hyundai’s assembly workers, why picket Hyundai dealerships?
Germany’s Autobild continues to bang the drum about HFO-1234yf, an air-conditioning coolant sold by US supplier Honeywell as an “environmentally-friendly” alternative to other refrigerants. Problem is, C02 seems to be not only more environmentally safe, but safer for humans (notably rescue workers) as well…
Read More >
Crains Cleveland reports that NASA will be offering some 38 technologies developed for its space program to the auto industry at a trade show next week at the Glenn Research Center. With 100 OEMs and suppliers attending, the event will bring materials and technologies chosen for their usefulness in automotive applications to an industry that is anxious to develop solutions for upcoming fuel economy standards. And hopefully bring some licensing fees to an agency that is anxious to find private sources of income. In the words of NASA’s Paul Bartolotta
NASA is open for business. We’re opening our safe, so to speak
So, what’s on offer?
Bloomberg [via the Financial Post] reports that “one of the five biggest European banks” is “close” to loaning Saab $157m so that it may pay workers and suppliers, in order to move towards restarting production. According to DI.se, the deal is predicated on Saab securitizing the loan with shares of Saab Great Britain or other “alternative assets.” But apparently whatever the banks ask for, Saab will try to give, as Theodoor Gilissen Bankiers analyst Tom Muller explains
They need the money immediately. I hope they solve it this week, otherwise I think it’s over for Saab. It’s a very dire situation.
He’s not kidding…
Saab has already warned its workers that paychecks due tomorrow could be delayed until “committed” funds from investors arrive, but Bloomberg reports that the warning may not be enough. According to the report
Any delay in the August payments will prompt the unions immediately to start a process aimed at ensuring state coverage of wages in the event of the carmaker’s failure, officials from the IF Metall and Unionen labor groups said. The unions, after gaining employees’ backing, would first file payment requests with Saab. If salaries remain unpaid in seven days, the unions may then ask a district court to declare Saab bankrupt.
That could put Saab into bankruptcy in as little as two weeks. Saab’s long nightmare seems to be drawing to a close.
Read More >
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