#SupplierNews

Stellantis CEO Carlos Tavares’ pay increase has annoyed a subset of shareholders as the automaker positions itself for more layoffs and attempts to shift the production of electric vehicles to countries where labor is cheaper. Meanwhile, the automaker's unwillingness to renegotiate contracts with suppliers had created additional tension with its business partners.

On Monday, Japan's Nippon Steel expressed its intention to purchase the United States Steel Corporation. The iconic American business supplies numerous industries, with the automotive sector being one of the largest.

Nippon Steel is reportedly offering a deal worth $14.9 billion and the assumption of any debt. However, the United Steel Workers don’t seem pleased with the arrangement and were said to have backed an earlier offer from domestic rival Cleveland-Cliffs Inc. totaling $7.25 billion.

You’ve no doubt heard about the chip shortage sweeping the automotive industry. But have you heard of the foam shortage? That’s right, there’s a dazzling new deficit of supplies in the manufacturing sector and it’s affecting your seats. The semiconductor crisis is so winter. Next season’s hottest supply trend involves those lovely little petrochemicals necessary for foam production.

Texas storms that left millions without power last month, during one of the coldest winters in the region, could have reportedly shorted oil refinery output to a worrying degree. There is now an underabundance of refinery byproducts used to make propylene oxide, which is required to produce polyurethane foam, which is used to manufacture car seats.

Toyota Motor Corp. says it had reached an agreement to consolidate all of its core electronics component operations within Denso. The move should allow Toyota to free up resources to compete more effectively in the new vehicle technology field.

Japan’s largest automaker noted it still has to discuss the logistics of transferring production of parts produced at its Hirose plant, near Toyota’s global headquarters, before the end of next year. But Denso, the company’s largest supplier, has already agreed to the core concept of the deal. By 2022, Denso will have taken over the mass production of all electronics components used in Toyota’s vehicles.

After spinning off from Ford in 2000, Visteon has set a corporate goal of expanding its supplier business to other companies. However, it hasn’t been smooth sailing. Granted Chapter 11 bankruptcy protection in 2009, Visteon emerged intact from its reorganization the following year. By 2013, the automotive supplier announced it would pare down its operations to focus primarily on vehicle electronics and HVAC systems.

Now, CEO Sachin Lawande says the company’s future hinges on autonomous vehicles. At this week’s Consumer Electronics Show in Las Vegas, Visteon will unveil its new DriveCore platform, a central control unit for electronics and software in autonomous cars known as a “domain controller.”

Fiat Chrysler is trying to work some financial magic to make itself look more appetizing to prospective investors. However, few buyers are likely to be interested in the whole of FCA. Its North American half has proven adept at assembling sport utility vehicles and Jeep would be a tasty morsel for any company hoping to expand its portfolio. But the Italian arm’s focus on smaller automobiles could get in the way of a potential deal — especially if the buyer already has their own.

CEO Sergio Marchionne wants the company to be purchased by an established automaker, but there are precious few that would want everything it has to offer. One possible solution is to separate subsidiaries from the core group. Marchionne says that might be the best solution for dealing with component supplier Magneti Marelli.

FCA has been of the mind that streamlining the business is the best way to attract investors without harming subsidiaries. After all, it worked well enough for Ferrari. The brand was spun off from FCA in late 2015, and its stock valuation embarked upon a rocket ride to the moon the following month.

Volkswagen will hold an emergency supervisory board meeting on Wednesday to discuss recent allegations that Germany’s automakers have been operating as an automotive cartel since the 1990s. Meanwhile, Daimler’s workers council is demanding answers from management as the automaker reels from a one-two-punch of collusion and emissions cheating accusations.

“I advise the car industry to clear the air now, to say what has happened, and then we can look to the future together again,” parliamentary group leader Volker Kauder, said Monday on German television. “If the antitrust violations prove true, and there’s a lot to suggest that, then one must really say the clear sentence: the rule of law also applies to the car industry.”

However, claiming there is sufficient proof to prosecute is a little premature. With the exception of a somewhat damning letter intercepted from VW, no hard evidence of collusion has been made public. Investigators are still in the early stages of the antitrust probe and have given few details as to its progress.

Takata, the parts supplier that furnished automakers with millions of extremely dangerous airbag inflators, was forced to issue another recall last week. Considering the hundreds of millions of units already recalled by the company, another 2.7 million is a drop in the bucket. But there’s a slight problem, as these newly recalled inflators are devices that have already been replaced.

In 2015, regulators specified Takata had until the end of 2019 to ensure its replacement airbag inflators were safe. With the “fixed” units now under scrutiny, automakers may be liable for the supplier’s wrongdoing as the millions upon millions of recalled inflators would need to be replaced for a second time. The current recall was prompted after the U.S. National Highway Traffic Safety Administration found the drying agent added specifically to combat the moisture that degrades the ammonium nitrate compound wasn’t effective.

“Absent proof that the other desiccated inflators are safe, they will also be subject to recall,” the NHTSA said in a statement last week.