Ford is the car company in this story. They’re telling parts suppliers to improve quality and lower costs, and some suppliers can lose the chance to sell parts to Ford.
Stellantis is the car company in this part of the news. Their CEO is saying working with other companies will be important to help the business turn around.
BYD is an electric-vehicle company. In this segment, they’re talking about partnering with European automakers and possibly running factories that aren’t being used fully.
APMA is a group that represents companies that make car parts. In this episode, they’re discussing what parts suppliers in Canada want from the trade talks.
“American content” means how much of a car is made with parts from North America. The hosts say that since USMCA, Canadian vehicles have used more North American-made components.
A “no bid list” means a supplier isn’t allowed to compete for new business. In this case, Ford is using it to pressure suppliers that have quality issues.
These are multi-year plans where suppliers promise to cut costs. Ford is saying suppliers have to agree to that for the next few years or risk losing future orders.
Underutilized factories are factories that aren’t being used enough. The idea here is that BYD could take over and run plants that aren’t producing at full capacity.
Maserati is an Italian automotive brand known for luxury and performance vehicles. The segment mentions it as a possible acquisition target, highlighting how EV makers may pursue established legacy brands to gain technology, distribution, or brand equity.
“Cost downs” means trying to make cars and parts cheaper to produce. The hosts say pushing that too hard can cause problems, including quality issues and strained relationships.
A recall is when a car company has to bring cars back to fix a problem. The segment suggests Ford has had recall-related problems and is trying to address them.
“Warranty woes” means the company has been dealing with more repairs than expected under its warranty. That usually happens when a lot of cars have issues that need fixing.
The Automotive Parts Manufacturers Association is a group that represents auto parts companies. In this interview, they’re sharing what parts makers want from the trade talks.
A supplier perspective means thinking about the companies that make the parts for cars. Trade rules can change their costs and how easy it is to get parts to the factories.
Section 232 tariffs are extra taxes the U.S. can put on certain imported goods. Here, they’re talking about tariffs on Canadian cars and why removing them could lower costs.
Tariffs on Canadian vehicles are extra taxes on cars imported into the U.S. Those taxes can make the cars cost more and can hurt sales and business for companies involved.
NAFTA was the previous trade agreement between the U.S., Mexico, and Canada. It was later replaced by USMCA, but it’s still referenced when people talk about how trade rules for cars and parts changed.
The Jeep Grand Cherokee is a popular SUV. The speaker mentions it to show that trade rules and tariffs can affect normal cars people drive, not just big industrial suppliers.
The Dodge Demon is a very high-performance Dodge muscle car. The speaker brings it up to question why trade restrictions are being justified in the first place.
Section 301 investigations are U.S. efforts to look into whether another country is trading unfairly. If the U.S. decides against that country, it can add tariffs that make imported car parts cost more.
Rules of origin are the rules that decide whether a car or its parts count as being made in a certain region. In practice, they affect whether the parts qualify under the trade deal so companies can avoid extra tariffs.
“Higher parts content” means requiring more of a car’s parts to be made locally (within the trade region). If the requirement gets too strict, it can be hard for suppliers to meet without major changes.
Concept
hybrid or plug-in hybrid
A hybrid uses gas and an electric motor together. A plug-in hybrid can also be charged by plugging it in, like a small EV.
Non-compliant vehicles are cars that don’t meet the agreement’s sourcing rules. That can mean they don’t qualify for the best tariff treatment, making them more expensive to sell.
The agreement can require that a certain amount of steel and aluminum used in products comes from approved sources. Since cars use lots of steel and aluminum, that can change where factories buy materials from.
Quotas are caps on how many cars or parts can be imported. The idea being discussed is that the limits could be lifted later if investment and production conditions are satisfied.
Concept
third country in North America
A “third country” is an extra stop in the supply chain. The concern is that products can still get into the region through another country even if the original trade route is restricted.
LIVE
Welcome to Daily Drive. For Wednesday, May 13, 2026, I'm Kellan Walker in Las Vegas.
Today on the show, Ford cracks down on suppliers over quality and cost.
Stellantis CEO says partnerships will be key to the company's turnaround, and BYD
eyes European automakers underutilize factories. Plus Flavio Volpe of the Automotive Parts
Manufacturers Association talks about what Canadian suppliers want from USMCA negotiations.
American content in Canadian vehicles has gone up 12% since the signing of the USMCA,
so we may be able to demonstrate that what you're hoping to achieve is already in place.
Let's run through all the news you need to know to keep up in the auto industry.
Ford is getting tough with its suppliers. It's putting some on a no bid list if they've got
quality problems. The automakers telling many parts makers they need to sign up for three-year
cost-saving plans or risk losing out on new business altogether. Five supplier executives
told our sibling publication Crane's Detroit Business they've been asked to cut costs by a
part of Ford's push to save $1 billion in material and warranty costs this year. That's
what CFO Sherry House said on the company's April 29th earnings call. We'll have more
on this story in a minute with Crane's reporter Kurt Nagel.
Stellantis CEO Antonio Filosa is betting big on partnerships to turn the company around.
He said at the Financial Times Future of the Car conference that teaming up with other
automakers will be a key part of Stellantis' strategy going forward. Case in point the
company's deepening its relationship with China's Leap Motor with two Spanish factories now set to
produce Leap Motor EVs. Filosa says these partnerships can help keep people employed while
still churning out compelling cars for brands like Fiat and he's not ruling out similar deals in
the US market either. Stellantis unveils its full business review May 21st.
And speaking of Stellantis, BYD is in talks with it and other European automakers about taking
over their underutilized factories. That's according to the company's executive vice president,
Stella Lee. Italy's on the shortlist for potential plant acquisitions and BYD would rather run them
instead of through joint ventures. Lee told Bloomberg News the Chinese EV maker is hunting
for any available plant in Europe to put spare capacity to use. And BYD's also eyeing legacy
brands like Maserati as possible acquisition targets. And those are today's headlines. You
can find more details on all those stories at AutoNews.com. Supplier executives aren't happy
with Ford's crackdown on their cost and quality. Kurt Nagel of our sibling publication Crane's
Detroit Business broke the story and he spoke with our own Jake Nier about it.
Kurt Nagel, welcome back to Daily Drive. Thanks for having me, Jake.
Yeah, becoming a bit of a regular here on the podcast. So you talked to five supplier executives
for this story. I'm curious how they're reacting to this crackdown by Ford.
Yeah, I mean, as you can imagine, they're not too pleased, right? Every company wants to preserve
its margins to the fullest extent possible. And this certainly runs counter to that. I think
suppliers understand that they're in the business of delivering low cost parts and high quality
parts. And so, you know, this is to be expected. But at the same time, when automakers push too
hard, press too hard for cost downs, there are going to be ramifications.
Yeah. And the relationships with suppliers have been a little tense to say the least in recent
years. I got to imagine this doesn't help that in any way.
No, that's exactly right. And for Ford in particular, it's a bit of an awkward time
to ask suppliers to eat more cost just considering the novellas aluminum plant fire,
creating shortages of the F-150. That's created a financial headache, not just for Ford, but for
suppliers, which rely on those volumes to sustain their business. So there's definitely
a pinch going on. That's for sure. Would you say that this is about cutting costs primarily
versus trying to fix quality problems? Is it all of the above? Like, what's the real driving reason
for this? Yeah, I would say it's all of the above. It's no secret that Ford has had some
pretty big warranty woes and some recall issues that they are trying to fix. And there's just
an arms race among automakers for affordable vehicles. The cost of a new car has just grown
out of control and automakers that can contain those costs are going to be the ones that are
going to have the advantage. And with 70% of a vehicle being composed of independent parts
and components, getting those for lower costs is going to create a lower cost product for consumers.
Curt Nagel, thank you so much for joining us today on Daily Drive and great reporting.
Hey, thank you, Jake. I appreciate it. We're continuing our coverage of the state of trade
and USMCA renegotiations this week. Yesterday, we heard from Uniform President Lana Payne about
what Canadian auto workers want from the trade talks. Today, we're looking at the supplier
perspective. Flavio Volpe is president of the Automotive Parts Manufacturers Association.
He joins David Kennedy of Automotive News Canada to discuss what Canadian suppliers are hoping for
in USMCA negotiations, including the removal of Section 232 tariffs on Canadian vehicles.
Just to get us started, give me what the APMA's position on going into this review is. What's
your wish list for what gets done? Look, I think it's very clear that we need tariffs on Canadian
cars going into the US removed. I know that sounds like what everybody else is asking for,
but I think there's a lot of people who have started to say, well, I guess we can start
planning otherwise or conceding that there's some tariff level that works. There isn't.
We got an exemption on the parts. I think that we can work together with Washington to understand
that they're really hurting Detroit. You're hurting Canada for sure, and you're hurting
Mexico, but you're really hurting Detroit. Let's find a way. Absolutely. Tell me how
realistic that is looking where we stand today. It's difficult to give you a
realism number with this White House, but I will say that not doing it and going into the midterms
where the Republican majority needs to be defended in automotive states,
would be really hard to tell people why that wasn't a good idea. I think there is some expectation
that the White House is going to want to see some accretive moves for American manufacturing
interests in a review or renegotiation. I think everybody's fertile for those conversations
without conceding anything up front, but I think everybody, anybody making cars in the U.S. or
Canada, knows that they need to see an end to these tariffs. The President, after potentially
losing the House, still being on the wrong side of American automotive manufacturing,
I don't know that that's a tenable position. Yeah, fair enough. When it comes to Ottawa's
position on this, the federal government's been pretty tight-lipped about what its
actual priorities are going into this review. Give me a little bit on your position, what you've
seen out of Ottawa, what they're actually looking to achieve here. Well, look, our public position
is the same one that I've articulated to the automotive news for the last year or so. It's
what we just talked about, removal of those tariffs. Ottawa is in this, let's call it renegotiation,
even though it's a review, versus the NAFTA USMCA one in 2017-2018 is really playing it
quietly, publicly. Where we had a lot of discussions and try to leverage the table
with public comments right now, everybody's, I think, expressively trying to be disciplined.
We watched the Chinese successfully hold the Canadian agriculture interests hostage by putting
a bunch of tariffs on and saying, you've got to remove the automotive tariffs if you want us to
release the hostages. Well, I think that's also taught us that we need to be more disciplined,
regardless of who that counterparty is. The Americans have just as much leverage,
even though they have more self-interest that overlaps with us. They've just as much leverage
as the Chinese move. And when it comes to section 232, obviously, it's in these talks,
we think, but maybe not a little bit on the outside. Tell me a little bit about where that stands.
Well, I drive a Jefferson County assembled Jeep Grand Cherokee, and I have for the last few years,
I still can't figure out what the national security threat is about that, or of my Dodge Demon.
And I don't think any of us have figured that one out yet. We do know that with the president losing
his IEP case at the Supreme Court, he's doubling down on the instruments that he can use.
So he's not fussed about my concerns about the misuse of that. They are continuing to do 301
investigations in 232 and trying to find any short-term lever they can to pressure allies to
make or trading partners to make concessions. In a perfect world, I'd prefer to see the American
auto sector stand up and say the misuse of those tariffs are causing irreparable harm.
But I don't know that the sector trusts that it will be bailed out, or that it will be supported
by those arguments would be supported in court. As long as the president is Donald Trump, I think
we're going to have the insecurity of how he's going to use these things, regardless of where
the constitutional authority lies. Yeah. And when it comes to the US position on this,
I think the goalposts have moved so many times, it's hard to keep track of it. But do you get
a sense of what the Trump administration is looking for in terms of concessions from Canada
on the automotive file, if any? Well, I think just take a different framing. I think the Trump
administration uniquely has wrapped all of the issues that it may have or questions it wants
answered or a wish list it might have with Canada and Mexico into this trade discussion.
Usually, there's a separation between trade issues and foreign affairs or other policies that
you're not preferable. And so the wish lists on Canada are not about automotive. He's put a position
on automotive. He says, we don't need Canadian cars. Now, if you want to get out from under that
position, hey, by the way, the border, hey, by the way, access for cultural services, there's a whole
bunch of different things. It's new. And they've chosen to play their hands that way. Let's see
how it works out. But as long as we understand that this is the traditional conversation about
chapters of rules of origin, then we'll be better prepared. Yeah. And when it comes to just one
quick thing on rules of origin themselves, higher parts content is one thing that has at least
been floated around a bit over the last little while. Is that at all a concern for Canada to have
either higher North American parts content or higher US specific parts content?
Look, anytime you're localizing the parts content on one hand, you'll have parts
suppliers say great, more business. But parts suppliers have been saying since the NAFTA renegotiation
is there's a limit. If you turn the screw too tight, you're going to break the threads. Instead,
what we've done is defer to your customers. And a lot of OEMs talk to me about the programs that
they have, where they're just achieving the USMCA 75%. And that if they had to exceed that,
the sophistication of these products, anybody who's doing a hybrid or a plug-in hybrid,
there isn't a local supply here. So if you force it too high, they've got to source it from where
it comes from. That's not North America. And then they will have non-compliant vehicles. So
it's complicated and it's better for the Americans to be thoughtful about it before they make that
demand. But within the rules of origin, within the content levels, there are things like the USMCA
is precedent for minimum requirement on steel and aluminum. They're probably going to have a
conversation where other materials get added to that or those get raised. The steel lobby in the
US is an entirely different animal. And then I think the Americans continue to talk about
minimum American content. And of course, the position of the industry has always been, look,
the more restrictive these guardrails, the less we're going to be able to do that on specific
programs. So they need to be careful. But I will say that American content in Canadian vehicles has
gone up 12% since the signing of the USMCA. So we may be able to demonstrate that what you're
hoping to achieve is already in place. And when it comes to China, obviously, we,
Ottawa struck a pretty controversial deal with China in January. Tell me how that factors in.
Look, I think we all hear the rhetorical volleys from Washington and from people in that circle
to say, you know, Canada's open the door, right when we should be standing tall and firm.
Here's some of that commentary out of Mexico as well. Well, nothing's flowed yet. And there are
some serious guardrails in a deal that the industry didn't ask for. But the prime minister
made the case for having to concede some of the marketplace for return of normal for
egg sectors. What's really important is that we demonstrate to our trading partners that
we're real about those guardrails. If the Chinese don't invest in joint ventures in actual production,
then when we review this thing at its three year point and at the end of the five year,
that the quotas should be gone. It is a hurdle we are having to jump now in bilateral and
trilateral relations that I wish that we didn't have to. But right now, there isn't anything
flowing in there. And there are hundreds of thousands flowing into the third country in North
America. Flavio Volpe spoke with David Kennedy of Automotive News Canada.
at Ford. Supplier relationships are absolutely critical to Ford. It's one of our key priorities,
and we know we won't be successful without great relationships with our suppliers.
We'd love to hear from you. Let us know what you think of the show and the topics we cover today.
Send us an email at dailydrive at autonews.com or leave us a voicemail at 313-444-2774.
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About this episode
Ford is tightening the screws on suppliers, putting some on a no-bid list for quality problems and pushing parts makers toward multi-year cost-saving plans—amid warranty/recall pressure and even F-150 supply strain after an aluminum plant fire. BYD’s European expansion also comes up, including interest in underutilized factories. APMA’s Flavio Volpe joins to discuss USMCA renegotiation priorities, especially removing Section 232 tariffs on Canadian vehicles and how rules-of-origin and “higher parts content” could reshape North American sourcing.
Ford is putting suppliers with quality problems on a “no bid” list and pushing parts makers to sign three-year cost savings plans. Stellantis CEO Antonio Filosa says partnerships will be key to the company’s turnaround strategy. Plus, Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, discusses what Canadian suppliers want from USMCA negotiations.
