This update helps automotive suppliers inform their legal and operational decisions to help address challenges and opportunities. Contact your Foley relationship partner, or Ann Marie Uetz, Vanessa L. Miller, or Nicholas J. Ellis, to follow up.
Key Developments
- Foley & Lardner LLP partner Ann Marie Uetz
appeared on CNBC's ‘Power Lunch' to discuss the United Auto
Workers (UAW) strike as it enters its fourth week.
- Foley & Lardner shared a number of key impacts and strategies for
suppliers affected by the ongoing UAW
strike.
- The seasonally adjusted annualized rate (SAAR) for
total U.S. new-vehicle sales reached 15.7
million units in September, according to estimates from the National Automobile Dealers
Association (NADA).
- New light-vehicle inventory reached a 40
days' supply at the end of September, representing an
increase of approximately 25% compared to the same period last
year. Inventory levels in October could experience broader impact
if strike-related production shutdowns continue to mid-month.
- Consulting firm Anderson Economic Group estimates the
UAW strike has resulted in nearly $4
billion in losses, according to analysis released on October 2.
- In an October 6 update, UAW President Shawn
Fain did not announce additional walkouts for the first
time since the strike began on September 15, citing a “major
breakthrough” in negotiations over contract coverage for
GM's EV battery plants.GM did not comment directly on
Fain's update. An estimated 25,000 UAW
members are currently on strike across five automotive
assembly plants and 38 parts-distribution
centers spanning the Detroit Three in the
U.S.
- Over 4,000 autoworkers represented by Canadian union
Unifor launched a strike at three GM
sites in Ontario responsible for assembly, distribution
and powertrain production.
- The Detroit Free Press reports that
nearly 4,000 UAW members across three states began walkouts on
October 9 after rejecting a tentative contract agreement with
Mack Trucks.
- The Wall Street Journal indicates
that over 6,000 workers across the Detroit Three and their
suppliers are laid off as a result of
walkouts.
- Approximately 30% of suppliers have conducted layoffs
due to the UAW strike, according to survey data from
MEMA featured in The Washington Post (subscription).In
addition, more than 60% of MEMA members expect to begin
layoffs by mid-October if the strikes continue.
- LG Energy Solution announced plans to invest an additional $3 billion in its Michigan facility as part of a battery supply agreement with Toyota Motor North America.
OEMs/Suppliers
- CNBC and Bloomberg report GM
is taking steps to secure a $6 billion line of
credit in preparation for the potential of prolonged UAW
strikes. The automaker reported $200 million on
strike-related costs in the third quarter.
- Third-quarter 2023 U.S. vehicle sales
increased by 21% for GM and 7.7% for Ford when compared to the same period
last year.Stellantis reported its U.S. sales fell 1% year-over-year.
- Daimler Truck North America subsidiary Freightliner will offer the new Cummins X15N
natural gas engine in its heavy-duty Freightliner
Cascadia trucks in 2025.
- Schaeffler AG is offering to acquire Vitesco Technologies Group AG in a €3.64 billion ($3.8 billion) deal that is expected to increase capabilities in areas including electrification.
Electric Vehicles and Low Emissions Technology
- U.S. sales of hybrid-electric vehicles could
increase by up to 35% year-over-year in 2023, according to analysis
from GlobalData featured in Kelley Blue Book.
- Sales of Ford's F-150 Lightning battery electric
pickup dropped by 46% in the third quarter due to a
production shutdown for planned upgrades, as well as delayed
deliveries caused by unspecified quality checks. The automaker
reported a 41% increase in sales of hybrid models in the
third quarter.
- Tesla delivered over 435,000 vehicles worldwide in
the third quarter, representing a decline of over 6% from the preceding quarter. The company maintained its
full-year 2023 volume target of 1.8 million vehicles and noted its
Q3 2023 deliveries were impacted by factory downtime for planned
upgrades.
- Chinese automaker BYD sold over 431,000 fully-electric vehicles in
the third quarter, representing an increase of 23% from the second
quarter.
- The European Union launched an anti-subsidy investigation into
the imports of EVs manufactured in China. The
investigation will examine issues including whether to establish
tariffs on the imported vehicles to “remedy the effects of
unfair trade practices.”
- GM plans to begin deliveries of its battery-powered
Cadillac Lyriq crossover in
Switzerland in 2024.
- Honda will begin delivering its first all-electric
SUV, the 2024 Prologue, to U.S. customers early next year. The
midsize SUV was co-developed with GM and shares
the Ultium battery platform.
- New analysis from RMI and the Bezos Earth Fund
predicts EVs could represent at least 62% of global vehicle
sales by 2030. The report also indicates that most major
automakers are committing at least half of their capital
expenditures and research and development budgets to EV development
and digital technologies.
- Swedish lithium-ion battery producer Northvolt
announced plans to build its first factory
outside of Europe in an area roughly 20 miles east of Montreal,
Canada.
- Prices of lithium carbonate in
China recently fell to their lowest level in nearly two years, due to
factors that include restrained customer demand and cautious
restocking by vehicle and battery producers.
- Nikola expects to begin delivering its hydrogen fuel cell
electric trucks to customers in October.
- A group of U.S. Senators led by Deb Fischer, R-Neb., recently introduced the “Stop EV Freeloading Act” to ensure electric vehicles contribute to a federal highway funding account.
Automated, Autonomous or Connected Vehicles Technologies
- Consumer confidence in fully automated, self-driving
vehicles declined for a second consecutive year, according
to the J.D. Power 2023 U.S. Mobility Confidence Index
(MCI) Study.
- The trucking and logistics sectors indicate cyberthreats could expand as more operations become integrated with computers, according to views expressed in Transport Topics.
Market Trends and Regulatory
- A new bill from Sens. Jerry Moran, R-Kan., and
Joe Manchin, D-W.Va., would direct the U.S. Federal Trade
Commission to “redo” its proposed Motor Vehicle Dealers Trade Regulation Rule,
beginning with issuing an advanced notice of proposed rule-making
for public input. The Center for Automotive
Research estimated dealerships could face significant
compliance costs if the rule were enacted. In an October 4 statement, the NADA praised the introduction
of the “FTC REDO Act” and urged Congress to pass the
legislation as quickly as possible.
- The Detroit Three automakers could risk at least $10 billion in fines between 2027 and 2032 under stricter proposed Corporate Average Fuel Economy (CAFE) requirements, according to analysis featured in Bloomberg.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.