Toyota thinks it can rebound from the chip shortage, suppliers will take on over a billion in costs tied to GM’s big Bolt recall, and Tesla. All that and more in The Morning Shift for October 12, 2021.
1st Gear: Tesla Loves Risk
Tesla’s plant in Germany is almost up and running, but I can’t get over the brinkmanship that Tesla, a multinational corporation, is engaging with there. Local environmentalists say that the plant could pollute drinking water, which may or may not be true. (It is probably true.) That is the kind of thing that you might usually brush off, as corporations routinely steamroll environmentalists, because capitalism.
Except, in Germany, one potential consequence is that, if the environmentalists win, Tesla could be forced to tear down the plant they’ve spent all this time building. This probably won’t happen, but the fact that it’s even on the table is wild, from the perspective of me, an American, who saw a coal-rolling truck driven by a troglodyte this weekend.
From The Wall Street Journal:
People who have opposed the site—and in some cases, tried to derail Mr. Musk’s plans—have until Oct. 14 to voice any final objections to the planned factory. The state environment agency will then assess the complaints, with 814 already in hand. They include objections over clearing trees and concerns over the impact on wildlife and drinking water.
German officials say they expect the plant to be approved, maybe as early as this year. If it doesn’t pass muster, though, Tesla could be required to tear down all the buildings it has already erected and return the site to its natural state.
If approved, Tesla says it could build as many as 500,000 vehicles a year here, starting with its Model Y crossover vehicle.
An environmental impact study required the company to resettle endangered animals from the forest before felling trees. In December 2020, a German court forced Tesla to stop clearing forest on a small strip of land adjacent to the highway and railroad tracks, saying clearing the trees could harm hibernating sand lizards and wasn’t essential to the future operation of the plant. After environmentalists voiced concern about the plant’s impact on water levels, Tesla made several changes to try to address them, though opposition remains.
Some delays were self-inflicted. Tesla altered building applications, requiring state officials to restart the process that allows citizens to submit objections to the plant. Brandenburg officials say they are working as fast as possible and have given Tesla support by using fast-track legislation to expedite industrial investment like Tesla’s.
The cynical part of me says that Tesla probably knows it has this in the bag, and is, in fact, not taking a big risk at all. The optimistic side of me says that, even if that is the case, the activism wasn’t for nothing.
2nd Gear: GM Says Its Suppliers Will Pay Almost All Of The Costs Of The Bolt Recall
That amount is $1.9 billion, according to The Wall Street Journal. GM recalled every Bolt and Bolt EUV worldwide because of fire risk earlier this year.
GM said Tuesday that LG would reimburse the car maker because of manufacturing defects in battery modules supplied by the Korean company. GM in August expanded a previous recall to include all of the roughly 142,000 Bolts that the auto maker has produced since 2016, citing a likely manufacturing flaw that has been linked to at least 13 fires.
In its third-quarter earnings later this month, the Detroit auto maker said it expects to report a recovery from LG of about $1.9 billion of the $2 billion in charges related to the safety action, one of the costliest in its history.
LG didn’t immediately respond to a request for comment.
GM has said the defect involved a likely manufacturing problem at LG factories that resulted in two flaws in certain battery cells that could lead to a fire. The auto maker previously said it was in talks to have LG reimburse the company for some recall costs.
It seems like GM wants to place almost all the blame for this on LG, and it also seems like LG is willing to accept that blame, or at least willing to pay for it. I’m not sure GM is allowed to get off that easy, though, after all GM was the one who chose LG as a supplier in the first place.
3rd Gear: Toyota Wants To Make Up For Lost Time
Toyota has been hit by the chip shortage and the pandemic, just like everyone, yada, yada, yada. A little less so, but still. This winter, according to Reuters, Toyota is trying to turn the page.
Toyota last month cut its production target for the financial year to end-March by 300,000 vehicles to 9 million units because rising COVID-19 infections slowed work at parts factories in Malaysia and Vietnam, compounding a global chip shortage that has forced it and other big automakers to curtail output.
The Japanese carmaker has asked suppliers to make up for lost production so it can build an additional 97,000 vehicles between December and the end of March, with some considering additional weekend shifts to do so, said the sources, who asked not to be identified because they are not authorised to talk to the media.
“Nothing has yet been decided about production plans beyond November,” a Toyota spokesperson said.
“COVID infection rates in Southeast Asia are dropping dramatically and people’s concerns about production risk are easing,” said Takashi Miyao, a researcher at automotive industry consultant Carnorama. “It looks like the industry is emerging from a tunnel,” he added.
We have been here before, with people saying that there is light at the end of the pandemic and/or chip shortage tunnel. Still waiting for the real dawn.
4th Gear: A Stellantis Plant In Michigan Smells Bad
Stellantis has a Jeep plant in Detroit, formally called Detroit Assembly Complex - Mack. It apparently doesn’t smell great, and officials there are investigating.
From the Detroit Free Press:
Complaints about odors prompted visits to the plant by regulators with the Michigan Department of Environment, Great Lakes and Energy’s Air Quality Division, which issued a violation notice last month for moderate to strong odors. Investigators “observed persistent and objectionable paint/solvent odors” affecting residential areas downwind of the plant during three visits to the area in late August and early September.
The plant produces the newest versions of the Jeep Grand Cherokee SUV, including the three-row Grand Cherokee L.
The company had been given a Monday deadline to formally respond to the violation notice. Neighbors had complained about the odors. Robert Shobe, who lives on Beniteau near the plant’s paint shop, said the odors, which he described as “metallic” in nature, make it unpleasant to be outdoors much of the time.
“The quality of life around here is pretty much zero. I don’t get to enjoy the outside,” he told the Free Press.
In a letter Monday addressed to Dr. April Wendling of the Air Quality Division, Plant Manager Michael Brieda said the company “is committed to addressing any objectionable odors from the Mack facility operations.” Brieda’s letter said the company was first made aware that there was a concern in the community about odors when an Air Quality Division inspector visited on Sept. 7 and it “immediately initiated a review to identify any operations that could be a cause of odors.”
That quote about not getting to enjoy the outside makes me sad; fix this Stellantis.
5th Gear: Also Stellantis, But This Time In Italy
Stellantis owns Maserati, which is a car brand that, like Alfa Romeo, is hard to explain in today’s car market. Automotive News said Monday that Fiat’s plant in Turin will be retooled to make EVs, and Maserati EVs in particular.
Stellantis will assign Mirafiori a new electrified platform to build Maserati sedans between 2022 and 2024, making the factory, where the automaker already produces the Fiat New 500 battery-electric minicar, the group’s center for electrification in Italy.
The Mirafiori factory is the historic center of Fiat, employing some 50,000 workers in its heyday in the 1970s when it used to produce more than 600,000 cars a year.
The plant currently builds the Maserati Levante crossover as well as the Fiat New 500.
Italian newspaper La Repubblica on Saturday reported that Stellantis could increase production of the combustion-engine Fiat 500 at Mirafiori by moving some volumes there from Tychy, Poland.
At Mirafiori, Stellantis will have one manufacturing process to make combustion engines, hybrids, and electric powertrains.
No one can explain why Maserati still exists, it’s fine.
Reverse: Not The Best Way To Go Out
Neutral: How Are You?
I was in the middle lane of a three-lane highway on Saturday and the truck in front of me was going slow, so I pulled into the left lane and right as I did said truck slammed on its brakes. That wasn’t quick enough to avoid rear-ending the car in front of it. The car in the right lane hit the car in front of it as well in a similar sequence. I narrowly missed it all and kept driving and looked in the rear mirror and didn’t see anything worth braking for, perhaps a deer had already escaped.