GM wants LG to pay $ 1 billion in battery repair after $ 800 million recall

As much as I am charmed by the Chevy Bolt, I would hate to own it right now, caught in the middle of an argument between my car manufacturer and their battery supplier. All this and more in The morning shift by August 23, 2021.

1st gear: things change after getting a huge Invoice

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 made the Volt batteries for it) has deteriorated amid a flare-up of fires from Bolt. GM is trying to make LG pay for a fix because Bloomberg Explain :

Four years later, the long-distance relationship between GM and its battery partner, LG energy solution, is tested like never before. In question: which will receive a note of approximately 1 billion dollars.

Last week, GM recalled the Bolt EVs for the third time in nine months due to the risk of their batteries catching fire. The Detroit-based company will replace modules in more than 73,000 additional vehicles and said it was trying to charge LG for the fix. LG, which is headquartered some 10,600 kilometers in Seoul, said spending would be split based on the results of a joint investigation into the root cause of the problem.

Things changed, perhaps unsurprisingly, when GM took a very public hit of $ 800 million on the recall:

Earlier this month, GM took an $ 800 million charge related to the recall, which contributed to the missing quarterly profit estimates and its shares. plunging the most for over a year. Barra said airframes for Bolts 2020 and later model years were built using improved manufacturing processes, so the recall did not affect newer vehicles.

Two weeks later, GM changed its mind. In a declaration released after the close on August 20, the automaker said that under rare circumstances the batteries supplied for the new bolts may have two manufacturing defects – a torn anode tab and a bent separator – in the same cell, this which increases the risk of fire. The additional cost: $ 1 billion.

Reuters used a little more polite language, saying that GM will pay the billion dollars but wants a “refund” from LG. Good luck!

2nd Gear: LG lost $ 6 billion in value because of the deal

LG shares are down as Reuters reports:

SEOUL, Aug 23 (Reuters) – LG Chem Ltd (051910.KS) shares closed 11.1% lower on Monday after General Motors Co (GM.N) said it would recall 73,000 more Chevrolet Bolt cars that use the South Korean company’s batteries, months after a similar recall by Hyundai Motor Co (005380.KS).

[…]

LG Chem, which is preparing an initial public offering (IPO) for the LG Energy Solution (LGES) battery unit, has lost more than $ 6 billion in market value, marking its biggest intraday percentage loss since March 2020.

“The market expected LGES to launch its IPO in September, but with GM’s expanded recall, LGES’s IPO is expected to be delayed by a month or two as the company needs to reflect the cost. of the recall before finalizing the IPO documents, “said Samsung Securities analyst Cho Hyun-ryul.

3rd gear: here are some complaints about the bolts

While we’re here, we should be reading some very dramatic consumer complaints about the Bolt, listed by Automotive News:

Many Bolt owners have filed public complaints with the NHTSA, expressing safety concerns and complaining about GM’s miscommunication.

A customer in Wakefield, Mass., Asked GM to buy back the Bolts unless he had a safe solution, calling the vehicle “a time bomb that can potentially set my house on fire, along with the corpses of my family.” inside”.

Other customers who live in multi-family homes with central or underground parking have said they are concerned for the safety of their neighbors.

GM has advised customers with recalled bolts to park them outside to protect their homes from a potential fire.

“Do I just have to burn the local farmer’s field or forest I’m forced to park him in, then?” A customer from Oregon City, Oregon, wrote to NHTSA. “I asked for a buyout by Chevrolet and I was refused. It is an absurd situation that puts me, my passengers and others around me at risk.

Bloomberg also spoke with a Bolt owner living in the dry hills of the Bay Area who was concerned their Bolt could start a wildfire. The owner wanted GM to take the car back.

4th gear: Mercedes is pretty much out of V8

As we’ve seen throughout the chip shortage, automakers always find a way to get their most profitable cars to the assembly lines, usually pickup trucks. Here’s how things go for Mercedes-Benz, like Automotive News reports:

The shortage of microchips is forcing U.S. Mercedes-Benz dealers to start the 2022 model year without many of their most profitable vehicles.

With the exception of the S580 and S580 Maybach sedans, no 2022 models will be available with a V-8 engine – yet.

[…]

Dealers learned of the cancellation on August 13. No availability of the V-8 erases the heart of Mercedes’ high-performance AMG lineup, 13 vehicles often preferred by athletes, musicians and other artists. A total of 17 V-8 models are affected.

5th gear: Volvo idling again

Volvo’s Gothenburg plant will be inactive due to the chip shortage just two weeks after a previous shutdown because Reuters reports:

Volvo Cars, owned by Chinese company Geely Holding (GEELY.UL), will stop production at its Swedish plant in Torslanda, a suburb of Gothenburg, over the next week due to the shortage of semiconductor chips, a he announced Monday.

[…]

“Production is expected to resume on Sunday, September 5,” added the Swedish company, which experienced a similar production disruption at its Gothenburg plant just two weeks ago.

Reverse: Beginning of the salad bowls strike

The historic strike came after the Teamsters drivers strike and the Teamsters attempt to poach union representation from UFW farm workers. Of Agricultural Workers Forum:

Agricultural historians point out that boycotts, work stoppages and marches, later dubbed the “Salad Bowl” strike, took place in waves between August 23, 1970 and March 25, 1971.

The strike consisted of repeated pickets, protests and walkouts and ultimately involved nearly 10,000 farm workers, making it one of the largest union actions in the country’s history to this point .

At its crux, the unrest pitted the UFW, led by charismatic farm worker-turned-activist Cesar Chavez, against the Teamsters in a contest to see which group would organize and represent the Salinas Valley farmworkers, and indeed, to through the vast agricultural granary. this is California.

Three people were shot dead in the confrontation, the UFW office in Watsonville was bombed, and hundreds were injured or arrested. A delegation of religious leaders from across the country, including the recently retired Bishop of Los Angeles, Roger Mahoney, was sent to mediate between the Teamsters and the UFW.

Neutral: do you like to drive?

I did about 1000 miles last week and at times I had my doubts.