Welcome to the Daily 5 report for Friday, Oct. 31. Happy Halloween.
If you want to feel scared on this Halloween Friday, feel free to update yourself on the emerging crisis from automotive microchip supplier Nexperia — with no sign yet of a business or political solution.
As expected, the resulting chip shortage is being felt first in the supply chain by Tier 1 companies such as Germany's Bosch Group and ZF Friedrichshafen.
At the same time, the North American aluminum disruption from a September fire at the Novelis plant in Oswego, N.Y., is impacting production at automakers such as Ford Motor Co. and Stellantis.
The messes at Nexperia and Novelis surfaced in earnings reports yesterday from suppliers BorgWarner Inc. and Aptiv. We can expect more of these warnings as more automakers and suppliers report quarterly results.
We'll no doubt hear about the companies that lose production and profits, but it'll be far more difficult to find out who successfully managed through these troubles. Few companies are willing to share their problem-solving practices with the public — and their competitors.
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Automotive purchasing departments are unsung heroes. With thousands of suppliers providing just-in-time parts delivery to assembly plants every day, it's a small miracle that mass production ever takes place.
But as we see in Plante Moran's annual survey of automaker-supplier relationships, some companies run their purchasing departments better than others. And by this measurement, Toyota Motor Corp. traditionally sets the gold standard.
So it should come as no surprise that Toyota isn't sounding any immediate alarm bells about its exposure to the Nexperia or Novelis problems.
Is there a risk from Nexperia? Yes, Toyota CEO Koji Sato told our Hans Greimel on Wednesday. Does Toyota face a looming shutdown? No, he said.
"Currently, we don't see any big damage for Toyota," Sato said on the sidelines of the Japan Mobility Show, adding that the company is closely monitoring the situation.
Supply chain diversification is a fundamental practice for automakers and it isn't easy, as our editorial this week eloquently explains.
Meanwhile, the auto retail world never stops making news. AutoNation Inc.'s board gave shareholders a big kiss today, announcing a $1 billion stock buyback program. And here is our latest dealership buy-sell report.
That's it for now. Have a scary fun evening! If you want to view this story in your browser, click here.
— Philip Nussel, online editor
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