Automakers Face 'Weeks Of Disruption' As They Divert Cars From Baltimore’s Blocked Port

Good morning! It’s Thursday, March 28, 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.

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Contents

1st Gear: Bridge Collapse Takes Hold Of Auto Industry

Early Tuesday morning, the Francis Scott Key Bridge collapsed after it was hit by a container ship leaving the Port of Baltimore. The bridge crumbled into the water below, killing six people and cutting off access to one of America’s busiest ports. Now, the impact of the bridge’s collapse is starting to take hold, as automakers begin diverting imported cars to other ports across the U.S.

Experts have now warned that automakers are facing “weeks of disruption” as a result of the bridge collapse, reports Politico. According to the site, some will be forced to re-route shipments to other ports in America, while others may have to delay some deliveries. As Politico reports:

“It would be a challenge to reschedule that much incoming flow to a different place,” Golara said. He expects companies will redirect imports to ports in New York and Georgia during the disruption, but they could still face constraints in the availability of certain models.

Golara noted that the automotive supply chain is more resilient than it was before the pandemic, and dealers have more inventory available, especially for electric vehicles. “Electric cars are in still better position than the average car,” he said.

As a result of the collapsed bridge, automakers such as Ford and General Motors have already confirmed that they will need to divert vehicle shipments to other ports in America. Toyota also expects to feel some impact of the bridge collapse, while Volkswagen, Volvo and Nissan said the impacts would be minor, reports Politico.

President Biden has also weighed in on the issues facing the auto industry in America. The certified Corvette guy said the White House would “move heaven and earth” to reopen the bridge and get the port up and running once again. To read more about the impact of the Francis Scott Key Bridge collapse on the auto industry, head here.

2nd Gear: Ford And Stellantis Announce Layoffs

Automakers around the world are searching for ways to make their cars cheaper in the hope that one day it will mean electric vehicles are actually affordable for everyday people. Whether that means pivoting to designing smaller electric cars or massively reducing their headcount, they all have their methods.

Ford and Stellantis are two companies that have opted for the latter, planning to cut more than 3,500 jobs at their facilities in the U.S. and Italy, according to reports. Ford will reportedly cut shifts at the Michigan plant that currently builds the F-150 Lightning pickup truck, with the Detroit Free Press reporting that 700 employees are being offered redundancy packages. As the site explains:

Ford Motor Co. is dramatically cutting the hourly workforce at the factory that builds the Ford F-150 Lightning starting next week, as the automaker slashes product targets of its all-electric pickup.

Of the 2,100 workers who make up three work crews at the Rouge Electric Vehicle Center in Dearborn, one third will remain on-site after April 1, Ford spokeswoman Jessica Enoch told the Detroit Free Press on Wednesday. A crew of 700 will be transferred to the Michigan Assembly Plant in Wayne to build the Bronco and Ranger while the remaining 700 or so will either take the $50,000 retirement package negotiated during the 2023 contract talks or accept reassignment in southeast Michigan. Ford is adding a third crew at Michigan Assembly.

Meanwhile the cuts at Stellantis are much more significant. At its Italian plants, Stellantis has negotiated layoffs of up to 3,000 employees, reports Reuters. The cuts come as the automaker pivots to new energy vehicles, as Reuters explains:

New deals were reached on Wednesday for over 1,000 lay-offs at facilities in Italy, including Melfi, Pomigliano d’Arco and Termoli, both for line workers and other functions, the FIOM union said in a statement, although it has not itself signed the agreements.

They add to similar deals announced on Tuesday for Stellantis operations in the city of Turin, with as many as over 1,500 voluntary layoffs, and for the engine making facility in Pratola Serra, with 100 additional jobs involved.

Reuters reports that the layoffs in Italy are predominantly on a voluntary basis, with Stellantis targeting older workers or those who may be looking to move to a new position already.

3rd Gear: Toyota Sales Drop As China Shipments Plummet

Toyota has faced a troublesome start to 2024, getting caught up in a safety test scandal and even allegations of emission test cheating at one of its subsidiaries. Now, the Japanese automaker has reported declining sales, which were hit by a massive 36 percent drop in sales across China.

The Japanese car maker saw its sales for February fall seven percent, report Reuters. The company claims the drop came as a result of reduced selling days due to the Lunar New Year, as well as “fierce competition” as a result of car pricing wars in China. Reuters reports:

For January and February combined, however, the sales decline in China was a much milder 0.7%, although that was still less than a 6.4% rise in passenger vehicle sales sector-wide, according to data from an auto industry association.

While Toyota’s U.S. sales for February surged 16% and those in Europe gained 14%, Japan sales tumbled by a third. Domestic sales were hit by production stoppages at Daihatsu which also makes some Toyota brand cars and due to the reputational fallout from the scandal even though Daihatsu brand vehicles are not included in Toyota’s global sales count.

Toyota’s February sales did see strong demand for the company’s hybrid models. According to Reuters, gas-hybrid cars accounted for almost 40 percent of the vehicles Toyota sold in February.

As well as sales dipping for Toyota in February 2024, the company’s output was also down. Global output for the brand shrank by 2.6 percent to 737,178 vehicles for the month.

4th Gear: Subaru Is Latest Automaker Hit With A Massive Airbag Recall

Airbag recalls are sweeping the auto industry these days, with BMW issuing recalls for faulty airbags in some of its older models and Ford issuing a recall for its recall of cars fitted with Takata airbag inflators. Now, Subraru has become the latest automaker to recall cars over faulty airbags.

The Japanese automaker will recall more than 100,000 midsize crossovers and sedans that are fitted with defective airbag sensors, reports Automotive News. According to the site, the recall affects 2020-22 Outback and Legacy models. Automotive News reports:

It is the third recall stemming from the same issues from parts produced by the same supplier. Toyota in December recalled 1.12 million vehicles while Honda called back 750,000 in February.

“A capacitor in the sensors for the Occupant Detection System (ODS) may crack and short circuit, which can prevent the front passenger air bag from deploying in a crash,” according to a recall report submitted March 22 to NHTSA.

On recalled vehicles, dealers will replace the ODS sensors on the front passenger seat free of charge, which Automotive News reports will fix the issue.

If you think your car has been impacted by a recall, there are a few simple things you can do to check. First, the NHTSA has a handy app you can use to check if your vehicle is affected, or you can head to the regulator’s website and plug your VIN into its recall search tool.