German steel-using companies active in the automotive supply chain are raising awareness that the current shutdown of carmakers threatens the existence of the German supply industry. Last week, VW, Daimler and BMW announced halts in production of at least two weeks in Germany and other countries (see Kallanish 19 March).
The expected production interruption of several weeks will lead to liquidity bottlenecks for a large number of supplier companies to the automotive sector. So says a joint statement issued on behalf of their federation WSM and the associated interest group for automotive suppliers, ArGeZ.
Loan programmes currently approved by the government through the German development bank KfW are not yet sufficient to cover the looming damage, says Christian Vietmeyer, managing director of the two bodies.
The many supplier companies must not be left out in the cold by a sudden interruption of the supply chains, the associations warn in the statement. “In concrete terms, this means that we expect the buyers in the value chain to accept goods until at least 27 March. Only then will a coordinated and joint restart of production be possible,” Vietmeyer continues.
ArGeZ assumes that delays in delivery could lead to a production ramp-up again by the beginning of May, as components that are still in China are unlikely to arrive in European ports before then. “We therefore expect a necessary interruption in production until 20 April 2020. We expect clear communication from the car manufacturers regarding the production halt and further planning,” Vietmeyer adds.
