As much as I am charmed by the Chevy Bolt, I would not want to be an owner right now, caught up in the middle of an argument between my car’s manufacturer and its battery supplier. All that and more in The Morning Shift for August 23, 2021.
1st Gear: Things Change After You Get A Massive Bill
Bloomberg has a new report on how the optimistic relationship between GM and LG (which supplies GM with its batteries for the Bolt and also did the Volt batteries for it) has soured amid a rash of Bolt fires. GM is trying to get LG to pay for a fix, as Bloomberg explains:
Four years later, the long-distance relationship between GM and its battery partner, LG Energy Solution, is being tested like never before. At issue: who will pick up a roughly $US1 ($1) billion tab.
GM last week recalled Bolt EVs for the third time in nine months because of risk their batteries could catch fire. The Detroit-based company will replace modules in more than 73,000 additional vehicles and said it’s trying to get LG to pay for the fix. LG, headquartered some 10,622 km away in Seoul, said the expense will be divvied up depending on the results from a joint investigation into the root cause of the problem.
Things changed, perhaps unsurprisingly, when GM took a very public $US800 ($1,110) million hit on the recall:
Early this month, GM took an $US800 ($1,110) million charge related to the recall, which contributed to quarterly profit missing estimates and its shares plunging the most in more than a year. Barra said cells for the 2020 and later model-year Bolts were built using improved manufacturing processes, so the recall didn’t affect the newer vehicles.
Two weeks later, GM changed its tune. In a statement issued after the close on Aug. 20, the carmaker said that in rare circumstances, batteries supplied for newer Bolts may have two manufacturing defects — a torn anode tab and folded separator — in the same cell that increases fire risk. The additional cost: $US1 ($1) billion.
Reuters used somewhat more polite language, saying that GM will pay the $US1 ($1) billion but wants “reimbursement” from LG. Good luck!
2nd Gear: LG Has Lost $US6 ($8) Billion In Value Over The Affair
LG shares are down, as Reuters reports:
SEOUL, Aug 23 (Reuters) – LG Chem Ltd (051910.KS) shares closed down 11.1% on Monday after General Motors Co (GM.N) said it would recall an extra 73,000 Chevrolet Bolt cars that use the South Korean firm’s batteries, months after a similar recall by Hyundai Motor Co (005380.KS).
LG Chem, which is preparing an initial public offering (IPO) for battery unit LG Energy Solution (LGES), lost more than$US6 ($8) billion in market value, marking its biggest intraday percentage loss since March 2020.
“The market expected that LGES would launch its IPO in September, but with GM’s expanded recall, LGES IPO is likely to be delayed for a month or two, because the company needs to reflect the recall cost before finalising the IPO paperwork,” said Samsung Securities analyst Cho Hyun-ryul.
3rd Gear: Here Are Some Bolt Complaints
While we’re here, we should read some very dramatic consumer complaints about the Bolt, catalogued by Automotive News:
Numerous Bolt owners have filed public complaints with NHTSA, expressing safety concerns and griping about poor communication from GM.
A customer from Wakefield, Mass., asked GM to buy back the Bolts unless it had a sure solution, calling the vehicle a “ticking time bomb that can potentially burn down my house, with my family’s dead bodies in it.”
Other customers who live in multifamily homes with central or underground parking said they worry about their neighbours’ safety.
GM has advised customers with recalled Bolts to park them outside to protect their homes from a potential fire.
“Shall I just chance burning down the local farmer’s field or forest that I’m forced to park it in, then?” a customer from Oregon City, Ore., wrote to NHTSA. “I’ve requested a buy back by Chevrolet and was refused. This is a preposterous situation that puts me, my passengers, and others around me in danger.”
Bloomberg also spoke with a Bolt owner living in the dry hills in the Bay Area, who was concerned their Bolt would start a wildfire. The owner wanted GM to take the car the hell back.
4th Gear: Mercedes Is Pretty Much Out Of V8s
As we’ve seen throughout the chip shortage, car companies always find a way to keep their most profitable cars rolling through assembly lines, typically pickup trucks. Here are how things are looking for Mercedes-Benz, as Automotive News reports:
The microchip shortage is forcing Mercedes-Benz’s U.S. dealers to start the 2022 model year without many of their most profitable vehicles.
Except for S580 and S580 Maybach sedans, no 2022 models will be available with a V-8 engine — for now.
Dealers learned of the cancellation on Aug. 13. No V-8 availability wipes out the heart of Mercedes’ high-performance AMG line, 13 vehicles often favoured by athletes, musicians and other entertainers. A total of 17 V-8 models are affected.
5th Gear: Volvo Idling Again
Volvo’s Gothenburg plant will be idled over the chip shortage just two weeks after a previous stoppage, as Reuters reports:
Volvo Cars, owned by China’s Geely Holding (GEELY.UL), will halt production at its Swedish plant in Torslanda, on the outskirts of Gothenburg, during next week due to the shortage of semiconductor chips, it said on Monday.
“Production is planned to resume on Sunday, Sep 5,” the Swedish firm, which had a similar interruption of output at its Gothenburg plant only two weeks ago, added.
Reverse: Salad Bowl Strike Begins
The historic strike came after the Teamsters drivers struck and the Teamsters tried to poach union representation of farm workers from the UFW. From Farm Workers Forum:
Agricultural historians recall that the boycotts, work stoppages and marches, later dubbed the “Salad Bowl” strike, took place in waves between Aug. 23, 1970, and March 25, 1971.
The strike consisted of repeated pickets, protests, and walk-outs and ultimately involved nearly 10,000 farm laborers — making it one of the largest labour actions in the country’s history up to that point.
At its crux, the unrest pitted the UFW, led by the charismatic farmworker-turned-activist Cesar Chavez, against the Teamsters in a contest to see which group would organise and represent farmhands in the Salinas Valley, and indeed, across the vast agricultural breadbasket that is California.
Three people were shot in the confrontation, the UFW’s Watsonville office was bombed, and hundreds of people were hurt or arrested. A delegation of religious leaders from around the country, including the recently retired Bishop of Los Angeles, Roger Mahoney, was dispatched to mediate between the Teamsters and the UFW.
Neutral: Do You Like Driving?
I’ve done about 1,609 km this past week and in some moments I had my doubts.