Supply Chain Matters readers are well aware that the looking glass for an organization’s overall supply chain performance is intense right now, especially when C-Suite executives feel the heat from investors and board rooms. This is especially the case among certain global automotive companies dealing with a host of supply chain disruption and ongoing semiconductor device shortages. In this posting we provide two recent examples of turnover among senior supply chain leadership that occurred n days of one another.
Last week both Bloomberg and The Wall Street Journal reported the departure of yet another senior manufacturing executive at Rivian Automotive as well as an overall reorganization.
Supply Chain Matters has featured prior commentaries on the Rivian’ s ongoing challenges, the latest being in mid-January. The start-up company has accumulated a backlog of 71,000 preorders for its two consumer focused vehicles, in addition to prior order from equity investor Amazon for 100,000 electrically powered parcel delivery vans.
Thus far, $13.7 billion has been raised from an initial public offering, with corporate strategy aiming to focus on acquiring adequate manufacturing capacity and demonstrating capability and actual delivery of designed vehicles to the market in order to garner a first-mover advantage in the EV market segment.
Rivian acquired the former Mitsubishi Motors automotive assembly production facility in Normal, Illinois which began production operations in September of 2021. This facility is being geared to produce upwards of 150,000 vehicles annually. After producing a reported 2,500 vehicles in the first quarter, the company continues to be challenged by termed supply chain challenges which in March required executives to trim the prior 2022-unit production forecast in half to upwards of 25,000 vehicles this year.
As noted in our January update, the manufacturer announced the news that the Chief Operating Officer had departed the company in December 2021. The company indicated to media outlets that the retirement was planned for months. Yet, we had noted that there did not appear that a transition or succession plan was in place. The company’s stock has since fallen by a reported 70 percent this year, and both Amazon, and now Ford Motor Company, both high profile original investors have now trimmed their equity investments in Rivian.
The latest news first published by Bloomberg indicates a reshuffling of the product management and manufacturing ranks.
The report cites an internal email viewed by Bloomberg which outlines the splitting of the company’s commercial business which includes production of electric delivery vans for Amazon, from that of the retail business that produces the RIT plug-in pickup and the RIS EV sport utility vehicle.
The reported moves include the departure of the existing Executive Vice President of Manufacturing Engineering, Charlie Mwangi, who came to Rivian from an engineering leadership role at rival Tesla two years ago.
Reportedly the start-up has hired former Magna International executive Frank Klein to be Rivian’ s new Chief Operations Officer. The Bloomberg report notes that many existing senior manufacturing engineering and supply chain management executives will report to Klein when he takes charge this week. The Wall Street Journal reported that Tim Fallon, the existing Vice President of Manufacturing will remain in that role.
Stellantis Senior Procurement Leadership Change
The Detroit Free Press reported last week that global auto maker Stellantis announced a senior supply chain North America leadership change after the automaker was dinged in an unflattering report regarding supplier relations in North America.
Marlo Vitous has been named Senior Vice President of Purchasing and Supply Chain for North America effective June 1. According to a Stellantis press release, Martin Hornneck, who headed procurement and supply chain for North America since 2020 “has announced his decision to retire.”
Ms. Vitous was most recently Vice President of Supply Chain Management and started with the company in 1998. Reportedly in her new role, Vitous will be responsible for the automaker’s Dare Forward 2030 business plan including delivering on electrification and software supply management commitments.
Stellantis and Samsung SDI jointly announced a plan to Invest over $2.5 billion in joint venture for a new lithium-ion battery production plant in United States. Plans call for the construction of an electric-vehicle battery plant in Kokomo, Indiana to support Stellantis’ North America electrification ambitions outlined in “Dare Forward 2030” strategic plan.
In announcing the senior executive move, Stellantis Chief Operating Officer for North America Mark Stewart noted that Vitous brings extensive experience to her new role and played a key role for the company during the global semiconductor chip shortage.
The recently released 22nd Annual North America Automotive OEM Supplier Working Relations Index Study had ranked the auto maker as having the lowest supplier relations score among six other major North America automakers. Reportedly issues stemmed from the two separate auto divisions, Fiat Chrysler and PSA Group that were brought together under Stellantis. The report further indicates that: “suppliers had been incensed by a change in the terms and conditions for the automaker’s purchasing organization in North America that the company implemented and then recently rescinded following pushback.”
The Free Press report further makes note of a recent senior global supply chain leadership change with the naming of Maxime Picat as Stellantis’s Global Chief Purchasing and Supply Chain Officer also effective on June 1. Picat’s prior role was COO for European Operations and replaces Michelle Wen in her new global leadership role.
The above are example of the good news, and not so good news aspects of supply chain challenges making daily business and general media headlines. The good news is the added recognition among senior management and the investor community that a company’s supply chain capabilities matter to supporting required business outcomes. The not so good news is similar, in that supply chain leadership capabilities are expected to overcome and rise above the myriad of disruption and challenges occurring and that leadership includes internal, external and industry influences.
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