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Trump Commerce Secretary Ross Well-Versed in Mexico Auto Business

Ross holdings include auto supplier with plants in Mexico.

by on Nov.28, 2016

Wilbur Ross, left, is greeted by Donald Trump and Mike Pence. President-elect Trump named Ross the new Commerce Secretary.

Wilbur Ross, the New York financier and tycoon President-elect Donald Trump has tapped to become the Secretary of Commerce and the principal adviser on trade issues in a Trump administration, has a big a stake in a major automotive supplier holdings in Mexico.

As secretary of commerce, Ross, 78, who has stepped back from an active role in managing companies such as the International Automotive Components Group, one of his largest holdings, will have a major role in future trade deals under Trump.

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Throughout his career, Ross has made several fortunes with shrewd investments in distressed companies. Back in the early 2000s, he made a fortune out of the North American steel industry at a time when most investors, analysts and pundits said the steel business in the U.S. was dead. (more…)

Auto Suppliers Readying for Next Round of Consolidation

Interiors wrapping up as suppliers looking cost cuts.

by on Jun.21, 2016

Auto suppliers are looking to take the cast off pieces of other companies and turn them in to profits.

The next round of auto supplier roulette appears to be ready for a new set of players. The last round occurred in the 1990s as suppliers looked to acquire complementary parts to build modules or gain size to get economies of scale.

However, while the ferocity of the frenzy may feel the same as last time, the end goal is a little different. In the past suppliers were looking to be the sole source for modules, but this time around there seems to be a focus on shedding what each company deems to be unprofitable businesses.

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One area that seems to be seeing a shift is automotive interiors. Newer suppliers seem to be ready to make a go of a business that more established players are ready to escape. (more…)

Toyota Production Again Disrupted by Supplier Problems

Impact likely to be short-term this time.

by on Jun.03, 2016

Once again, Toyota vehicle production is hampered by an event beyond its control. An explosion at a brake supplier has left it scrambling for parts.

Toyota has suspended production on a trio of Japanese assembly plants due to an explosion at one of its key supplier’s factories.

The incident occurred on Monday at a facility operated by brake manufacturer Aisin Advics on a paint line. Four people were taken to the hospital, forcing both Aisin and Toyota to go scrambling to find alternative sources for key brake parts.

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The incident has impacted several manufacturers, including minicar maker Suzuki, but Toyota appears to have taken the biggest hit, and the temporary shutdown comes as the third time this year the Japanese giant’s domestic factories have been idled by various natural and man-made disasters. (more…)

Two Suppliers Paying $14.5 Mil in Price-Fixing Suit

Money being paid to new vehicle buyers, lessees.

by on Aug.28, 2015

Two more auto suppliers are paying millions of dollars in fines related to civil suits over price-fixing allegations in multiple countries.

The damages paid by auto suppliers involved in an international price-fixing scheme continue to rise as two more Japanese companies, Fujikura Ltd. and T.Rad Co. Ltd., have agreed to pay a total of more than $14.5 million to the plaintiffs in multi-district litigation against auto parts makers.

So far lawyers for the plaintiffs in the civil suits have now recovered nearly $200 million from the suppliers, most of whom are based in Japan.

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The civil litigation is independent of the criminal charges leveled against the suppliers by the U.S. Department of Justice and authorities in Japan and the European Union. Criminal fines and penalties leveled over the cartel-like behavior of the suppliers now total more than $2.5 billion. (more…)

Suppliers Expect to Continue Move to Emerging Markets

Automakers going to ask for big cost concessions, suppliers say.

by on Mar.05, 2015

Suppliers are moving facilities to emerging markets to keep up with demands from automakers.

Suppliers are going to continue moving their operations from North America to emerging markets while enduring never-ending demands for pricing concessions from automakers, according to a new study from Boston Consulting Group.

The consulting firm, also known as BCG, suggests suppliers will continue to migrate to emerging markets in Asia, Latin America and Africa during the next half decade at the insistence of their customers.

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Even though carmakers insist they want better and more cooperative relations with suppliers, they are putting more pressure on their suppliers for cost savings. The report indicates that a new financial squeeze is on the way as the world’s biggest automakers – are preparing to demand some of the deepest cost reductions in years. (more…)

NHTSA Fining Takata $14K a Day

Supplier fails to explain data in 2.4 million documents.

by on Feb.20, 2015

Takata's Hiroshi Shimizu testified before Congress, but the company hasn't been cooperative in a federal probe about its faulty airbags.

Takata’s refusal to fully cooperate in a federal investigation of its exploding airbags responsible for the recall of more than 18 million vehicles will now cost them more than bad publicity – the company’s going to pony up $14,000 a day.

“Safety is a shared responsibility, and Takata’s failure to fully cooperate with our investigation is unacceptable and will not be tolerated,” Transportation Secretary Anthony Foxx said in a statement.

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The faulty inflators can explode and spew shrapnel into passenger cabin. At least six people have been killed worldwide due to the problem. The inflators are in cars made by 10 auto companies, which have all issued recalls for the affected vehicles. (more…)

Former Takata Exec Indicted in Seatbelt Price-Fixing Scam

Honda using new airbag supplier for next-gen Accord in the US

by on Jan.26, 2015

More turmoil at Takata.

Takata Corp. just received two belts of bad news: one of its former executives will face criminal charges in the U.S. and its biggest customer is cutting back on its business with the supplier.

Federal prosecutors obtained one-count indictment against Hiromu Usuda, charging him with conspiring to rig bids and fix the prices of seatbelts that Takata sold to Honda Motor Co. Ltd., Toyota Motor Corp., Nissan Motor Co. Ltd. and Mazda Motor Corp., the U.S. Department of Justice said Thursday.

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The indictment is a result of a four-year probe conducted by the U.S. and Japanese governments as well as the European Union. Takata executives have also pled guilty to other charges and paid hefty fines in connection with the price fixing investigation, which has also involved several other suppler companies that feed part to American and Japanese auto parts manufacturers operating in the U.S. (more…)

Takata Claims No Need for National Recall Despite Rising Death Toll

Supplier ducks responsibility during Congressional hearing.

by on Nov.20, 2014

Hiroshi Shimizu, Takata's senior vice president of quality assurance, said the company doesn't think a national recall of its airbag inflators is needed despite evidence to the contrary.

Takata Corp. executives during a U.S. Senate subcommittee hearing today said there is no need to expand its recall of 7.8 million vehicles with faulty airbag inflators from a regional action to a national effort, despite a rising number of deaths and injuries due to the airbags.

Prior to the hearing, two senators, Richard Blumenthal (D-Conn.) and Edward Markey (D-Mass.), offered evidence that the airbag explosions can happen outside the regional recall area, suggesting that a woman was killed by the airbag in 2004 in Arizona while driving one of the affected vehicles. Arizona is not one of the states in the regional recall.

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After being roundly criticized by politicians and safety groups for its past handling of recalls as well as mounting evidence – including an investigative piece by TheDetroitBureau.com – that regional recalls are ineffective due to the transient nature of vehicles, the National Highway Traffic Safety Administration (NHTSA) acquiesced and recommended Takata and the 10 automakers involved expand the recall to national status. (more…)

Feds Demand Takata Push Airbag Recall Nationwide

NHTSA claims recent death outside recall area mandates enlarging action.

by on Nov.19, 2014

NHTSA Deputy Administrator David Friedman said the regional recall of vehicles with faulty Takata airbags is no longer enough.

Federal safety regulators called on Takata Corp. and the 10 automakers using the supplier’s faulty airbags, which have been attributed to four deaths in the U.S., to voluntarily expand the scope of the recall of the affected vehicles from a regional recall to a nationwide action … or else.

The National Highway Traffic Safety Administration (NHTSA) said the data shows that simply limiting the recall to just certain areas of the country is no longer a reasonable course of action.

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“We now know that millions of vehicles must be recalled to address defective Takata air bags and our aggressive investigation is far from over,” said NHTSA Deputy Administrator David Friedman. “We’re pushing Takata and all affected manufacturers to issue the recall and to ensure the recalls capture the full scope of the problems.” (more…)

Federal Regulators Turning up Heat on Takata

NHTSA pushes supplier to speed up replacement part production.

by on Oct.30, 2014

NHTSA Deputy Administrator David Friedman is pushing Takata to speed up production of replacement airbag components.

Takata is feeling the heat from federal safety regulators who are pushing the Japanese supplier to speed up the production of components necessary to repair the 7.8 million vehicles recalled due to their faulty airbags.

David Friedman, deputy administrator of the National Highway Traffic Safety Administration, sent a letter to the supplier telling it to expedite the production of replacement inflators as well as informing Takata that it is insisting automakers that used the airbags make every effort to get the repairs done as quickly as possible, including extending service hours at its dealerships.

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Letters were sent to Toyota, Honda, General Motors, Ford, Nissan, Mazda, Mitsubishi, Subaru, BMW and Chrysler Group. Additionally, the agency wants to meet weekly with Takata executives weekly, according to a separate letter, Bloomberg reported. (more…)