Good morning! It’s Wednesday, March 6, 2024, and this is The Morning Shift, your daily roundup of the top automotive headlines from around the world, in one place. Here are the important stories you need to know.
1st Gear: Rivian Cuts 100 Production Jobs
After slashing its workforce in February when it laid off more than 800 employees, electric vehicle maker Rivian is once again hoping to cut costs by laying off a further 100 workers at its factory in Normal, Illinois.
Amazon-backed Rivian announced this week that it had laid off “about 100” workers at its production facility, which accounts for just over one percent of the employees at its site. The layoffs, first reported by Crain’s Chicago Business, come amid extensive cost-cutting measures for the EV maker as it tries to turn a profit on its $70,000 cars. Crain’s reports:
Rivian said Feb. 21 that it would eliminate 10% of its salaried jobs to cut costs and get to profitability more quickly. The company lost $1.52 billion on $1.32 billion in revenue in the fourth quarter.
The company faces two challenges as it ramps up production to high enough volumes to make money. The company’s stock is down and interest rates are high, limiting its ability to absorb losses by raising more capital, forcing it to pay closer attention to costs.
More broadly, demand for EVs beyond early adopters isn’t proving as strong as the industry expected, creating another headwind.
The layoffs come as the R1T maker faces uncertainty in the EV market. So far this year, the company’s stock price has tumbled to just $11 per share, which is more than seven times less than its debut price of $78 in November 2021.
With layoffs sweeping the automaker and it projecting a pretty lousy 2024, Rivian will have all its hopes on its latest model turning things around. The automaker will add a more affordable electric SUV to its range in the coming weeks. The R2 is predicted to break cover later this week, but specs of the new car appeared online just yesterday.
2nd Gear: Boeing Missed Quality Control Requirements On 737 Max
Things don’t appear to be looking good for American plane manufacturer Boeing, either. After a spate of high-profile failings on its all-new 737 Max aircraft, the Seattle-based company has now been accused of missing certain quality control targets in its production.
The Federal Aviation Administration opened an audit into Boeing and one of its suppliers, Spirit AeroSystems, earlier this year. Now, Reuters reports that the probe has identified shortcomings in the plane maker’s quality control systems that must be addressed. Reuters reports:
The FAA also said it found “non-compliance issues in Boeing’s manufacturing process control, parts handling and storage, and product control.” The FAA has not detailed the specific corrective actions Boeing and Spirit must take but sent summary of its findings to the companies in its completed audit.
Spirit AeroSystems, which makes the fuselage for the MAX, said it is “in communication with Boeing and the FAA on appropriate corrective actions.”
Boeing said in response “by virtue of our quality stand-downs, the FAA audit findings and the recent expert review panel report, we have a clear picture of what needs to be done.”
So far, Boeing’s efforts to expand production of the 737 Max have been barred while the FAA’s probe was ongoing. Now, the company will be expected to address the issues highlighted in the report in order to restore people’s faith in the troubled plane and its wider fleet of aircraft.
Reuters reports that FAA administrator Mike Whitaker has given Boeing 90 days to develop a “comprehensive plan” that addresses the “systemic quality-control issues” highlighted by the agency’s report.
3rd Gear: UAW Wins Vote At Tesla, GM Supplier
After it won raises across the board at General Motors, Stellantis and Ford last year, the United Auto Workers union pledged that it was coming for the rest of the industry. Now, it appears to be making good on that promise.
While the union has been making strides in plants operated by companies such as Hyundai, the union is now targeting suppliers. Now, Automotive News reports that the union has won an organizing vote at a parts supplier for GM, Tesla and Stellantis. According to the site:
The UAW said in a statement Tuesday that the workers at GNS North America in Canton, Mich., voted Feb. 20 to become part of UAW Local 900, Region 1A.
The 110 workers at GNS create structural parts, roof enforcements, bumper components, B-pillars and door beams. GNS North America has additional plants in Holland, Mich., and Mexico.
The union won the vote 42 to 37 to join the UAW, reports Automotive News. The victory came despite a raft of anti-union sentiment access the company, as the site explains:
Ralph Morris, organizing coordinator for UAW Region 1A, said management used intimidating tactics to oppose the union drive.
“The company hired what they call union busters, or direct persuaders, and they held captive audience meetings, forced the workers to attend these meetings,” he told Automotive News on Tuesday. “And we’re on the line and calling them into the office one on one, and anti-union rhetoric you know about union dues, about losing things in the contract, talking about layoffs, plant closings, strikes, and stuff like that.”
Now, the UAW just needs to find a way to organize workers at Tesla, which the supplier sends its parts to.
4th Gear: EU Could Enforce Retroactive Tariffs On Chinese EVs
Countries like the U.S. and many in the European Union are increasingly worried about the threat posed by cheap EVs offered by Chinese automakers. Here in America, lawmakers have warned about the risks they pose without even offering them for sale, while over in Europe they have slowly been increasing market share despite warnings from some pretty powerful people.
Now, the EU has said that it could impose retroactive tariffs on cheap Chinese EVs that have already been shipped and sold across Europe as it strives to help level the playing field for homegrown models. As Reuters explains:
The Commission is carrying out an anti-subsidy investigation into Chinese battery EVs to determine whether to impose tariffs to protect EU producers. The probe is due to conclude by November, although the EU could impose provisional duties in July.
In a document published on Tuesday, the Commission said it had sufficient evidence tending to show Chinese EVs were being subsidised [sic] and that imports had increased by 14% year-on-year since the investigation was formally launched in October.
It said EU producers could suffer harm, which would be difficult to repair, if Chinese imports continued at this accelerated rate before the conclusion of the investigation.
Unsurprisingly, the inquiry hasn’t pleased China. Reuters reports that the China Chamber of Commerce to the EU said it was “disappointed by the move” and added that increased imports of Chinese EVs to the bloc “reflected increasing European demand for electric vehicles.”