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Feuding Korean Battery Suppliers Risk Disrupting EV Production – Transport – Canada


Nissan Canada President Steve Milette says a move away from
fleet sales is behind the brand’s deeper-than-average decline
in Canadian sales volume over the past few months. While light
vehicle sales are down 3.8 per cent year-over-year in Canada
through the end of October, Nissan is down 8.5 per cent in Canada
over the same period, according to the Automotive News Data Center.
The last few months have seen steeper declines: 13 per cent
year-over-year for the months of September and October, 7.6 for
August, and 12 in June and July. Milette says that while retail
sales could be stronger and Nissan dealers in the country
“would expect to do a little bit more [volume] at this point
in time … the vast majority of the decline would be from the
fleet business.” “Our strategy is one of quality of
sales, which means that we’re really interested in growing the
retail piece,” Milette told Automotive News Canada. “This
is the year, unfortunately, where we’re taking some volume out
of the rental channel.”

Milette said that while fleet business is still “a good
thing,” the brand sees this move as being important for the
brand’s status in Canada long-term. “We feel [fleet sales
are] not a good thing for residuals and a sustainable business
model, so we had to pare back,” said Milette, who was
appointed to the role of president in May 2019. “The total
sales over the last six years, they increased 82 per cent in
Canada, so retail, fleet, all channels grew quite significantly.
Now, we’re just course-correcting on the types of sales that
we’re willing to do, and then we’re going to go full speed
ahead on the pure retail business.”

Source: Automotive News Canada


The American automotive industry has been the target of
malicious cyber actors since at least late 2018, according to an
FBI report obtained by CNN. In the bulletin disseminated this week
to a select group of private companies, the FBI warned of efforts
by hackers to successfully compromise auto industry computer
systems using sophisticated techniques and by taking advantage of
network vulnerabilities. The cyber attacks “have resulted in
ransomware infections, data breaches leading to the exfiltration of
personally identifiable information, and unauthorized access to
enterprise networks,” the FBI said.

Source: CNN


Nobody likes it when a former colleague joins a rival. And
nobody will know what the late Fiat Chrysler CEO Sergio Marchionne
thought when his longtime labor chief, Alphons Iacobelli, landed at
General Motors in January 2016. Today, Iacobelli, 60, is inmate No.
55817-039 in a federal prison in Morgantown, W.Va., serving a
five-and-a-half-year term for his role in the FCA-UAW corruption
scandal. His sentence is scheduled to be complete Sept. 8, 2023.
Iacobelli was in charge of bribing top UAW officials and keeping
them “fat, dumb and happy,” according to federal
prosecutors in the yearslong investigation into union corruption.
He also kept plenty of the graft for himself, buying a $350,000
Ferrari and siphoning another $1 million in union workers’
training funds to pay off his personal credit card debts.

Come again?

GM’s massive lawsuit against Fiat Chrysler this past week
suggests more could be heard directly or indirectly from Iacobelli
if the case gets any legs during litigation. Iacobelli was GM’s
executive director for labor relations for more than a year and a
half, according to his LinkedIn page. He was dismissed after he was
charged for crimes committed when he was Fiat Chrysler’s vice
president of employee relations. He knew exactly what transpired
there; he played key roles in all of FCA’s dealings with the
UAW. So GM executives had several months when they could have
gotten a full download. Did he say anything to anyone at GM? What
do they know? Did any of that knowledge go into the lawsuit against
FCA?  Iacobelli, through his attorney, declined to comment or
answer questions about the GM suit against FCA and former
employees, including Iacobelli himself.

GM tenure

Reading into the details of the bombshell lawsuit, GM’s
lawyers did their homework. And it’s a good bet they used
information from their former employee, Iacobelli. The lawsuit
names Iacobelli 66 times in 95 pages. Curiously, when describing
Iacobelli‘s role at FCA, GM’s lawyers neglected to mention
that he worked for GM after his criminal activity took place.

Apparently, GM’s position is that his time at the company
has nothing to do with his role in the scheme at FCA or his current
residence in West Virginia. A GM spokesman declined to
comment.  Previous government indictments seem to dance around
Marchionne’s involvement in the bribery scandal that Iacobelli
helped orchestrate. But the GM suit paints him as the central

Sergio’s master plan

His motive, according to GM, was to bribe the UAW into making
sweetheart deals with FCA to pressure GM into merging with FCA.
Industry consolidation was Marchionne’s overriding mission
during his later years, and he had repeatedly failed in his pursuit
of a merger with GM. 

The GM lawsuit contains details about Marchionne’s mission
that few others would ever share, or want to share.  The suit
— citing evidence obtained through “information and
belief” — goes into great detail about FCA’s
advantages over GM that were purchased from UAW executives during
Iacobelli‘s tenure. For example, the lawsuit cites secret deals
related to lower-paid tier-two and temporary workers. The UAW
allowed FCA to use more of these workers than GM. The UAW also
looked the other way on potentially expensive worker grievances at
FCA because of these secret deals. 

The union and the company further had a secret “side
letter” in 2014 allowing FCA to get more favorable
prescription drug prices. Such a deal would have saved GM $20
million a year, the suit said, again citing “information and
belief.” A good source for such “information and
belief” could be the person who negotiated the deal. FCA
Chairman John Elkann and his lawyers can call this lawsuit nonsense
and might even have the guts to file some kind of counterclaim.
They might convince a judge to toss the whole thing out.

But they better be careful.

This litigation might take on the look of a football game where
one team plays against another team whose coach has a copy of their
playbook. GM could have all the evidence it ne to make FCA
— and their suitors at PSA Group — very
uncomfortable.  After all, someone with the ethics of Al
Iacobelli could tell GM an awful lot over several months. As the
old saying goes, he’s the bad penny that keeps turning up.

Source: Reuters and Automotive News


In October, seasonally adjusted U.S. auto sales topped 16.5
million, making the U.S., unsurprisingly, the second-biggest auto
market in the world after China. Big as that figure is, it’s
down by more than 2 million vehicles from two years ago and back to
levels seen in 2014, 2007 and 2002. There’s a major difference
between the auto market of the late 2000s and the late 2010s,
however: the age of buyers. Auto market researcher Michael Sivak
recently noted the distinct shift in new-car purchasers toward
older buyers. In 2007, nearly half of all light-duty vehicle buyers
in the U.S. were under the age of 44; in 2017, more than half were
over the age of 55.

Source: Bloomberg


If you own a vacation property in the USA this is good news for

The Internal Revenue Service announced today the official estate
and gift tax limits for 2020: The estate and gift tax exemption is
$11.58 million per individual, up from $11.4 million in 2019. That
means an individual can leave $11.58 million to heirs and pay no
federal estate or gift tax, while a married couple will be able to
shield $23.16 million. The annual gift exclusion amount remains the
same at $15,000. The IRS announced the new inflation-adjusted
numbers in Rev. Proc. 2019-44. Forbes contributor Kelly Phillips
Erb has all the details on 2020 tax brackets, standard deduction
amounts and more. We have all the details on the new higher 2020
retirement account limits too.

Source: Forbes


Millennials have transitioned from a group originally deemed as
uninterested in vehicle ownership to a generation that’s
expected to account for 40% of all new-vehicle purchases next year.
That includes luxury vehicles, pickup trucks and CUVs/SUVs.
Millennials buying vehicles in those three segments go about it in
markedly different ways, according to the 2019 CarGurus Buyer
Insights Report.

Source: WardsAuto


Volkswagen’s luxury car unit Audi on Tuesday said it would
cut one in ten jobs, freeing up billions of euros to fund its shift
toward electric vehicle production. Audi said it would cut up to
9,500 jobs, or 10.6% of its total staff by 2025, saving 6 billion
euros ($6.61 billion), but also create up to 2,000 new positions in
the areas of electric mobility and digitalization.

Source: Reuters


South Korea’s SK Innovation beat its larger rival LG Chem to
a multibillion dollar deal in 2018 to supply Volkswagen Group with
electric vehicle batteries in the United States. With great
fanfare, SK broke ground in March on a $1.7 billion factory in
Commerce, Ga., about 120 miles from VW’s Chattanooga plant,
which will be the automaker’s electric vehicle hub in the

LG Chem had other ideas.

Stung by missing out on the VW deal to SK Innovation and the
departure of 77 employees for its rival, LG Chem took SKI to court
in the U.S. in April accusing it of misappropriating trade secrets.
Fast forward seven months and the two companies have hit each other
with lawsuits for battery patent infringements in a dispute that
threatens to disrupt the launches of electric vehicles by some of
the world‘s biggest automakers.

U.S court filings reviewed by Reuters show the feuding suppliers
are trying to stop each other from importing and selling EV
batteries destined for vehicles VW will build in Tennessee as well
as General Motors’s Bolt, Ford Motor Co.’s pickups,
Jaguar’s I-Pace, Audi’s e-tron, and Kia’s Niro.

At stake is the Korean companies‘ ability to supply
automakers in the U.S with batteries just as the companies are
scrambling to lock in supplies with lucrative contracts ahead of an
expected surge in demand, according to court filings by the two
companies and several industry experts. “Whoever loses the
fight would suffer a fatal blow, unless the two reach a settlement.
This will also be a setback for automakers,” said Cho
Jae-phil, a professor at Ulsan National Institute of Science and
Technology who worked previously at another Korean rival, Samsung

The U.S. patent infringement lawsuits lodged by the companies
mean that if one, or both, lose they probably will not be able to
market products using the patents in question in the country, the
companies said in court filings. The two have taken their feud to
South Korean courts as well.

Source: Reuters

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