Welcome to the Daily 5 report for Friday, Oct. 24. TGIF!
You can count on the auto industry grappling with at least one crisis at any given time. This includes supply chain disruptions, natural disasters, regulatory changes, labor strife, safety recalls, corporate bankruptcies and executive scandals.
But these days, this industry faces numerous crises on multiple fronts and the conflicts aren't going away anytime soon. It's all piling up and it's a good bet C-suite executives are losing sleep.
The most immediate challenge is the fallout from the Novelis aluminum plant fire last month disrupting production at Ford Motor Co., Stellantis and now Nissan. This could cost Ford up to $2 billion with the automaker hoping to make up at least half of those losses with increased production next year. The disruptions are likely to spread.
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Then we have the emerging potential for more production difficulties as global automakers and suppliers warn of possibly "serious" semiconductor shortages triggered by embattled Dutch chipmaker Nexperia.
"We are currently doing everything we can to serve our customers and avoid or minimize production restrictions," a spokesperson for Bosch, the world's largest auto supplier, said in an emailed statement today to Reuters.
Beyond events the industry can't control, there are plenty of other problems caused by management miscalculations. Most of the industry is now paying the price of pivoting back to internal combustion vehicles after betting too heavily on rosy forecasts for electric vehicle growth.
General Motors and other automakers must now cut costs to pay for that pivot. As a result, about 200 GM salaried workers started their days today with pink slips.
Hundreds more new jobs at a Gestamp plant expected to supply GM with EV components near Detroit are also at risk because of the pivot away from EVs, as reported by Kurt Nagl of Automotive News affiliate Crain's Detroit Business.
Let's not forget the ongoing tariff uncertainty still hanging over much of the global auto industry, especially in Canada, where trade talks with the U.S. were terminated last night by President Donald Trump.
Finally, the UAW's latest drama is going down at the Volkswagen plant in Chattanooga. The union is planning to take a strike vote next week after several months of contract negotiations failed to result in a tentative deal.
That's it for this week. Have a great weekend.
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— Philip Nussel, online editor
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