This update helps automotive suppliers inform their legal and operational decisions to help address challenges and opportunities. Contact your Foley relationship partner, or Ann Marie Uetz, Vanessa L. Miller, or Nicholas J. Ellis, to follow up.
Key Developments
- Foley & Lardner LLP provided a recap of critical business and
legal issues discussed during its annual Automotive
Forum, including alternative powertrain technology,
planning for the EV transition, the potential impacts of labor
strikes, and more.
- Foley & Lardner partner Vanessa Miller
appeared on the SupplyChainBrain podcast episode, "Betting on Electric Vehicles: A Realistic
Appraisal," discussing the factors that will
influence the future of electric vehicles.
- On September 22, the United Auto Workers (UAW)
expanded its strike against the Detroit automakers to include
38 GM and Stellantis parts distribution
centers across 20 states. The Detroit Free Press
provided a list of the striking locations.
- Foley & Lardner partner Ann Marie Uetz
offered her insight across several publications on the UAW strike
against Detroit automakers, including the Corporate
Counsel article, "Auto Suppliers Aim to Avoid Legal, Financial
Mayhem as UAW Strike Looms." Her comments also appeared in
Automotive News and Crain's Detroit Business. In
addition, The Wall Street Journal included her
comments about weakness in parts of the supply chain that will be
negatively impacted if the strike is prolonged.
- Foley & Lardner partner Jeffrey Kopp is
quoted in the CNBC article, "Everything you need to know about UAW's
targeted strike plans – and possible lockouts,"
commenting on the targeted strikes against Detroit automakers and
the possibility of lockouts by the companies.
- Foley & Lardner partner Nicholas Ellis is
quoted in the Law360 article, "UAW Strike Roils Auto Industry Supply
Chain," explaining how the unpredictability of the
autoworkers' walkouts has made it difficult to measure the
potential impact to suppliers.
- Anderson Economic Group estimates the first week of the
UAW strike resulted in $1.6 billion in economic losses,
according to an update in Automotive News (subscription).
- Auto parts suppliers with significant exposure
to the Detroit Three automakers could have over $38 billion
of revenue at risk as UAW strikes expand, according to
analysis in
Bloomberg.
- Nearly 355,000 battery electric
vehicles (BEV) and plug-in hybrid electric
vehicles (PHEV) were sold in the U.S. in the second
quarter of 2023, representing a market share of 9% and an increase
of 58% from the same period in 2022, according to a report released on September 25 by the
Alliance for Automotive Innovation. Nine states and the District of
Columbia had an EV market share above 10% for the first half of
2023.
- The Society of Automotive Analysts (SAA) will
be hosting a webinar on October 3 from 9 – 10:30 AM
(ET) titled, "An Industry in
Transition," that will feature several of the
industry's leading analysts and Foley &
Lardner partner Ann Marie Uetz. Contact your Foley
relationship partner for more information.
- On September 24, Canadian autoworkers
narrowly ratified a three-year contract with
Ford that includes wage gains and pension
improvements. Unifor selected GM as its next bargaining target in Canada.
- President Biden is scheduled to visit Michigan on September 26 to "join the picket line and stand in solidarity" with the UAW. Former President Donald Trump plans to speak to autoworkers in the state on September 27.
OEMs/Suppliers
- The UAW strikes at parts distribution centers
have the potential to significantly impact dealership
service departments, according to a report in The Wall Street
Journal.
- GM indefinitely idled its Fairfax Assembly
plant in Kansas City, Kansas on September 20, due to a
parts shortage of stampings produced at a striking plant in
Wentzville, Missouri.
- Stellantis temporarily laid off nearly 70 employees at
its Toledo Machining plant in Perrysburg, Ohio, due to
"storage constraints" caused by the strike at the nearby
Jeep Gladiator and Wrangler assembly plant. The automaker indicated
similar layoffs could affect roughly 300 workers at its plants in
Kokomo, Indiana.
- Certain steelmakers could be vulnerable to production shutdowns in the wake of broader strikes by the UAW.
Electric Vehicles and Low Emissions Technology
-
Reuters reports Ford will pause
construction of its $3.5 billion EV battery plant in Marshall,
Michigan and a final decision has not been made about the planned
investment.
- Due to delays in obtaining battery modules, GM will halt production of BrightDrop electric
commercial vans at its CAMI Assembly
plant in Ontario from October until next spring.
- Ford plans to double production of gasoline-electric
hybrid F-150 pickups next year, in response to
factors that include slower-than-expected sales of its all-electric
vehicles.
- Government officials in India indicate
Tesla could source up to $1.9 billion worth of auto
components from the nation this year.
- Vitesco Technologies is reported to be considering Michigan for a new
electric vehicle parts factory.
- Japanese public and private entities
plan to develop supply chains in Canada to
support EV and battery production.
- BMW, Ford and Honda announced a joint venture called ChargeScape
to develop vehicle-to-grid technology and
services.
- Hyundai and Georgia Tech signed a memorandum of understanding to collaborate on research and development of hydrogen-fueled engines for large trucks and EV batteries.
Automated, Autonomous or Connected Vehicles Technologies
- California Gov. Gavin Newsom vetoed legislation that sought to prohibit
autonomous heavy-duty trucks in the state from
operating on public roads without a safety driver physically
present in the vehicle.
- On September 13, the U.S. House Transportation and Infrastructure Committee held a hearing to discuss automated commercial vehicles and their potential impact to the U.S. supply chain. Key themes included how to balance the potential productivity benefits of the technology with safety and regulatory concerns.
Market Trends and Regulatory
- A number of cases challenging the U.S. Environmental Protection
Agency's Renewable Fuel Standard (RFS) final rule were recently consolidated in the
D.C. Circuit, according to a report by
Bloomberg Law. The rule became effective on September
11, and it
establishes "biofuel volume requirements and associated
percentage standards for cellulosic biofuel, biomass-based diesel
(BBD), advanced biofuel, and total renewable fuel for
2023–2025."
- A new report by the EPA's Office of the
Inspector General concluded the agency must improve
oversight of the RFS program due to the potential for
fraud, and an absence of "reasonable assurance that the
program is achieving its goals of reducing greenhouse gas emissions
and expanding the nation's renewable fuels sector."
- The Biden administration will adopt categorial exclusions under the
National Environmental Policy Act for the purpose
of accelerating reviews of certain EV charging
projects.
- On September 14, the U.S. House passed the Preserving Choice in Vehicle Purchases Act (H.R. 1435), which would amend federal law to prohibit states from directly or indirectly limiting the sale of vehicles with internal combustion engines, according to a report in the Washington Examiner. The bill is expected to face significant opposition in the Senate, and President Biden has indicated he would veto the bill.
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