Welcome to the Daily 5 report for Tuesday, April 29.
As if tariff chaos wasn't enough. The slowdown in the adoption and production of electric vehicles in North America continues to trigger acrimony and litigation between suppliers and automakers.
Kurt Nagl of our affiliate Crain's Detroit Business unearthed some nasty litigation between two major global suppliers: Valeo and American Axle. Valeo is suing Axle for breach of contract in a Michigan court in the wake of Stellantis terminating plans last year for a little-known electric heavy-duty Ram truck program.
The decision to terminate took place about a year ago — before the departure of Stellantis CEO Carlos Tavares. But the suppliers already were executing the program. Valeo spent tens of millions of dollars to develop electric motors and inverters for American Axle e-beams that were to go into 2027 heavy-duty Ram trucks, Valeo said in the lawsuit. Negotiations between the two suppliers started in 2022, well before Stellantis ended the program, Nagl wrote.
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American Axle argues that the suppliers never had an enforceable contract and therefore no breach of contract occurred.
It's rare that such a dispute went public in court. Suppliers avoid tipping their hands or revealing information that their customers don't want in the public domain. It's a good bet the lawyers will make this go away with a privately negotiated settlement.
Speaking of which, Nagl last year wrote about another contentious case in which Bosch, the world's largest supplier, sued its EV customer Rivian Automotive Inc. over a payment dispute. Rivian refused to reimburse Bosch $204 million after it ceased using the supplier's e-motors and brought the work in-house, according to the lawsuit. Rivian countersued, accusing Bosch of "reckless failures" in performing the contract.
As expected, the case has been settled, Nagl's story says. Could there be a better time to be a lawyer representing auto suppliers in contract disputes?
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In other news today, General Motors' first-quarter report was caught up in the breaking news of President Donald Trump's plan to ease up on auto industry tariffs. GM withdrew its current financial guidance for the year but is expected to issue new guidance on Thursday.
Meanwhile, Volvo Cars is shaking up its North American leadership amid a $1.8 billion cost-cutting drive and regional restructuring, Urvaksh Karkaria reports today. The reorganization will streamline Volvo into three regions: the Americas, Greater China, and Europe & Rest of the World.
Volvo Cars U.S. and Canada President Michael Cottone is leaving. The Americas will be led by Luis Rezende, president of the company's Latin Americas operation. The Brazilian rising star has worked at Volvo for more than 15 years.
Speaking of Volvo, there was an interesting transaction last year involving one of its dealerships in suburban Atlanta. Sonic Automotive Inc. on Oct. 21 purchased the remaining 50 percent stake in North Point Volvo Cars in Alpharetta, Ga., from partner Neil Christman in a deal that was formed more than two decades earlier.
"It was actually our only joint venture like that," Sonic Automotive CEO David Smith told Automotive News. "This was a one-off situation from 20 years ago."
Looking ahead, stay tuned to autonews.com this evening and tomorrow for coverage of Trump's latest tariff announcements for the auto industry. As always, our live blog will bring it all together.
That's it for now. Have a great rest of your day.
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— Philip Nussel, online editor
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