German automotive suppliers question traditional relationships

Exploding energy costs and a lack of customer cooperation are throwing Germany’s automotive suppliers off track, and making them question their long-standing ties to the sphere of the carmakers.

Seven industry associations, mostly steel/metals users, have reiterated in a joint press release their call for government support for a cap on energy prices, and broader electricity supply and company-oriented measures. The call comes on behalf of the associations for sheet metal forming (IBU), massive forming (IMU), hardening technology (IHT), powder metallurgy (FPM), metal goods (FMI), spring-makers (VDFI) and screw-makers (DSV).

The current relief package presented by the government some days ago will not succeed in steering companies back onto a safe route, they argue. Electricity price increases are currently peaking at 15 times those in the previous year, and at a 1,000% increase for gas prices. “It’s five to twelve,” warns IBU managing director Bernhard Jacobs. “If the state doesn’t cap energy prices now, it will ruin companies and many thousands of jobs in no time.”

According to the letter, carmakers still have the attitude that energy and logistics costs need to be solved by suppliers. They are playing for time and using the term “pain-sharing”, Kallanish hears from Jacobs. However, their strategy could fail: the first suppliers are thinking about leaving the automotive supply chain, he admonishes.

Many suppliers are looking for new business fields and cooperative customers, because they are tired of the old negotiating rituals, he says. He wonders if the carmakers will recognise this danger in time.

Christian Koehl Germany