Welcome to today's edition of the Daily 5.
It's always a good thing when automaker purchasing executives are willing to speak in public with their supply chain constituency. It probably doesn't happen often enough.
On Tuesday, top purchasing executives from General Motors, Toyota Motor North America and Nissan took the stage in suburban Detroit to discuss challenges meeting electric vehicle production forecasts for their supply chains. It hasn't been easy. The overriding buzzword at this event, as we've heard in similar sessions, was "transparency."
This is a core value for automakers with good supplier relationships, but it's often a missing value for manufacturers with troubled supply chains. Lack of transparency yields angry suppliers and potential litigation — and the threat of production interruptions and job losses.
Why so much anger? Stranded costs. Suppliers invest for certain levels of production, then find out after the fact that the forecasts were wrong. Then they want to recoup at least some of those stranded costs.
Magna International CEO Swamy Kotagiri, in John Irwin's story today, said he has "no choice" but to seek those recoveries especially after inflation and post-pandemic supply chain challenges ate into profits.
"We have to address all the headwinds that we've been facing, and in the spirit of partnership, [automakers] do realize that," Kotagiri said during a recent call with analysts. "It's good for the industry."
In other news today, GM issued a major recall for nearly 462,000 U.S. vehicles with faulty diesel engine triggers. Our story by Georgia Hall says GM reported 11 incidents related to this issue, and in some cases, vehicles veered off the road and caused minor property damage. Three minor injuries were reported.
In another notable recall, Tesla Inc. issued a U.S. callback for 2,431 of its new Cybertrucks because of a drive defect that could lead to a loss of power. This was the sixth recall of the vehicle since it hit the roads a year ago.
Meanwhile, EV maker Rivian's shares got a big boost today following Tuesday's launch of its $5.8 billion joint venture with Volkswagen Group. Shares in Rivian surged nearly 14 percent to close at $12.03 after rising as much as 20 percent in earlier trading. Notably, VW agreed to increase its investments by $800 million.
The investment "is a vote of confidence in the EV maker's prospects, as support for EVs in the U.S. faces a more uncertain future, given Trump is returning to the White House," Susannah Streeter, head of money and markets at Hargreaves Lansdown, told Reuters in a story today.
Speaking of electric vehicles, we'll have the latest U.S. registration figures in a story tomorrow morning. This valuable data is a key indicator for actual EV sales.
That's it for today. Have a great rest of your afternoon.
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— Philip Nussel, online editor
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