As we wait for the Covid variants, Deltacron and BA.2 to really hit, and for the next degeneration in the Russian invasion of Ukraine (when is Putin going to be indicted for war crimes?), let’s remember that there are other things going on.
In particular, the new issue with automobiles is theft of exhaust systems. Thieves don’t want the entire car, just the parts with precious metals in them. For gasoline-powered engines, that’s the catalytic converter which suppresses air pollution. Your car won’t start if it’s not there.
Insurance claims for theft of these converters have increased by more than 1000% since 2019.
What makes converters special is that they contain three rare metals — platinum, rhodium and palladium. Like most commodities, the prices of these metals have risen sharply since the Russian invasion of Ukraine.
The price increase makes particular sense for palladium. The number one producer of this mental is South Africa, but almost 40% of the world’s supply comes from Russia.
Some police departments — like the LA County Sheriff’s Department — offer to etch ID numbers into the converters to allow them to be recovered if stolen. Depending on the car model, the cost of parts to replace a catalytic converter can range from $300 to $2,500. Unless you can do the work yourself, there’s a substantial labor charge on top of that cost.
Countries and companies need to understand the political risks associated with certain metals and with sourcing supplies from unreliable nations. Back in the 1970s, “political risk” was routinely considered in investment decisions. However, companies seem to have become complacent in the Internet Age, assuming that what Putin has done wouldn’t happen and that viruses couldn’t disrupt supply chains. Both assumptions clearly are false.
There are other events that we either haven’t seen or lack recent experience that could be just as disruptive. These include major earthquakes, tsunamis, reactor accidents and meteor strikes, all of which have happened in the last 50 years, but not in the last decade. Companies need to diversify sources of supply, and have some sources close at hand. The risk for those that don’t and for their shareholders and customers is huge.
Putin can be indicted for war crimes, but who is going to go get him?
If Putin is taking Russia back to the 1950s, someone will take him out. The only question is when.
LikeLiked by 1 person
[…] On a lighter note? […]
LikeLiked by 1 person