WASHINGTON (Reuters) –General Motors Co said on Thursday it will extend a shutdown of a Michigan assembly plant to mid-October following a new recall of its Chevrolet Bolt electric vehicles over battery issues after 12 reported fires.
The largest U.S. automaker said the extension of the production halt at its Orion Assembly plant will go through at least Oct. 15. GM also said it was cutting production at six other North American assembly plants because of the ongoing semiconductor chips shortage.
GM said it will not resume Bolt production or sales until it is satisfied that the recall remedy will address the fire risk issue. It said Thursday it had reports of 12 fires and three injuries.
GM shares were largely unchanged in late trading.
GM in August widened its recall of the Bolt to more than 140,000 vehicles to replace battery modules, at a cost now estimated at $1.8 billion. The automaker said it would seek reimbursement from battery supplier LG.
It is not clear how long it will take GM to obtain replacement battery modules for recalled vehicles and whether it will have diagnostic software that will allow it to certify some modules do not need replacing.
GM said the additional three-week production halt at its Bolt plant comes as it continues “to work with our supplier to update manufacturing processes.”
Earlier this month GM was forced to halt production at most North American assembly plants temporarily because of the chips shortage.
The new production cuts include a Lansing, Michigan, plant that builds the Chevrolet Traverse and the Buick Enclave.
GM is also cutting production of SUVs like the Chevrolet Equinox, Blazer and GMC Terrain at plants in Mexico and Canada. It will also make further production cuts at Michigan and Kansas plants that make Chevrolet Camaro and Malibu cars.
The Commerce Department said on Wednesday it plans a Sept. 23 White House meeting with automakers and others “to discuss the ongoing global chip shortage, the impact the Delta variant has had on global semiconductor supply chains and the industry’s progress toward improving transparency.”
(Reporting by David Shepardson; Editing by Dan Grebler)
Canada competition watchdog may have to rely more on litigation – top official
Competition Bureau Canada watchdog may have to rely more on litigation after its proposed veto of a takeover was overturned, and this could make life harder for companies seeking to merge, the agency head said on Wednesday.
Matthew Boswell, commissioner of competition, noted his bureau had tried this year to block western Canadian oil and gas waste firm Secure Energy Services Inc from buying rival Tervita Corp.
Secure then turned to the independent Competition Tribunal, which denied the bureau’s injunction and underscored “the high bar that needs to be met to prevent mergers … that we allege are anti-competitive,” he said.
The tribunal, he said, had acted so quickly that the bureau had not had time to present all its evidence, raising valid questions about the state of competition laws in Canada.
“This decision has significant implications for how we conduct future merger reviews, particularly in cases where there are competition concerns,” Boswell said in a speech to the Canadian Bar Association.
“This may mean that we must pursue a litigation-focused approach that is costly and less predictable for merging parties,” he added.
Secure relied on the so-called efficiencies defense, which is unique to Canada. Boswell said this procedure allowed the tribunal to allow an anti-competitive merger to proceed if the transaction was deemed to produce efficiency gains that were greater than its anti-competitive effects.
“The efficiencies defense raises significant practical
challenges for the Bureau to estimate and measure anti-competitive harm,” he said. “(We should) ask ourselves whether our competition laws are really working in the best interest of all Canadians.”
The bureau is an independent law enforcement agency set up to ensure fair competition. It investigates price fixing, bid-rigging and mergers, among other matters.
(Reporting by David Ljunggren; Editing by Cynthia Osterman)
Canadian home price growth slows to near standstill in September
Canadian home prices barely rose in September from August as a recent slowdown in housing sales weighed, data showed on Wednesday.
The Teranet-National Bank Composite House Price Index, which tracks repeat sales of single-family homes in 11 major Canadian markets, rose 0.1% in September from August, marking the fourth consecutive month in which the monthly price increase was lower than the previous month.
“The slowdown in price growth can be linked to the slowdown in housing sales reported in recent months by the Canadian Real Estate Association,” Daren King, an economist at National Bank of Canada, said in a statement.
Eight of the 11 major markets rose, led by a 1% gain for Winnipeg, while prices were stable in Montreal and fell in Vancouver as well as in Ottawa-Gatineau. It was the first time in seven months that gains were not seen in all 11 regions.
On an annual basis, the index was up 17.3%, decelerating after it notched record annual growth in August. It was paced by a 31.7% gain in Halifax and a 28.0% gain in Hamilton.
(Reporting by Fergal Smith; Editing by Steve Orlofsky)
Oil rallies as U.S. crude stocks decline in tight market
Oil prices rallied on Wednesday after U.S. Crude Inventories at the nation’s largest storage site hit their lowest level in three years and nationwide fuel stocks fell sharply, a signal of rising demand.
Brent crude futures settled at $85.82 a barrel, a gain of 0.9% or 74 cents and the highest since October 2018.
November U.S. West Texas Intermediate (WTI) crude, which expires on Wednesday, settled at $83.87, up 91 cents, or 1.1%. The more active WTI contract for December settled up 98 cents to $83.42 a barrel.
Crude prices have risen as supply has tightened, with the Organization of the Petroleum Exporting Countries maintaining a slow increase in supply rather than intervening to add more barrels to the market, and as U.S. demand has ramped up.
Globally, refiners have been boosting output thanks to high margins, one that can only be restrained by maintenance. U.S. refining capacity use dropped in the most recent week, but analysts noted that supply may continue to tighten if U.S. refiners also pick up processing again.
“Stronger demand and concerns about a drop in inventories when refiners were already running a low rate during maintenance season is making people concerned about what will happen when refiners have to ramp up production to meet what is very strong demand for gasoline and distillate,” said Phil Flynn, senior energy analyst at Price Futures Group in Chicago.
U.S. crude stocks fell by 431,000 barrels in the most recent week, the U.S. Energy Information Administration said, against expectations for an increase, and gasoline stocks plunged by more than 5 million barrels as refiners cut processing due to maintenance. [EIA/S]
U.S. stocks at the Cushing, Oklahoma delivery hub hit their lowest level since October 2018. Gasoline stocks are now at their lowest since November 2019, the EIA said, while distillate stocks fell to levels not seen since early 2020.
Oil prices have also been swept up in surging natural gas and coal prices worldwide in anticipation that power generators may switch to oil to provide electricity.
Saudi Arabia’s minister of energy said users switching from gas to oil could account for demand of 500,000-600,000 barrels per day, depending on winter weather and prices of other sources of energy.
(Additional reporting by Sonali Paul in Melbourne and Koustav Samanta in Singapore; Editing by Andrea Ricci, Kirsten Donovan and David Gregorio)
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