BMW and Volkswagen have suspended the work of factories in Europe due to a lack of parts
(ORDO NEWS) — BMW and Volkswagen are forced to suspend the operation of their factories in Europe due to a shortage of wiring harnesses that were supplied from Ukraine, writes the Financial Times.
According to experts, now the automotive industry in this country is faced with big problems, because manufacturers will look for other options to get spare parts. This, in turn, will create a “logistical headache” and rebuilding businesses is expensive and time consuming.
“We are working with our suppliers affected by the Ukrainian crisis to find solutions together and support them in their implementation, whether it is to maintain production in Ukraine or elsewhere,” BMW said. Volkswagen said that nine of its 11 suppliers in Ukraine are working, although not at full capacity.
Another problem is the delivery of finished products to factories across the Polish-Ukrainian border. This is not only dangerous, but there is also a shortage of truck drivers: general mobilization has been announced in Ukraine since February 25, and there is a travel ban for men liable for military service from 18 to 60 years old. On March 15, martial law was extended for another month. In addition, there are crowds of refugees at the border crossings, so they are practically closed to normal commercial freight traffic.
As the FT interlocutors add, even if the truck is sent, it is impossible to say for sure whether it will be in Poland in three hours or three days – or it will be sent back at all.
“In essence, today the country (Ukraine-Approx. ed.) is not open to any normal commercial activity,” said Joseph Massaro, CFO of Aptiv, a US auto parts supplier. It was to Aptiv enterprises in Poland, Romania and Serbia that they began to export parts from the west of Ukraine.
Meanwhile, the crisis hardly affected the workers of Ukrainian factories themselves: mostly women work there, and military duty does not apply to them.
What will happen to the enterprises in the long term and whether the departed companies will subsequently return to Ukraine is not yet clear. For example, Volkswagen is discussing expanding production outside of Europe if the conflict continues.
“We should consider additional investment in the United States and abroad,” said Volkswagen Group Chairman Herbert Diess, noting that production of up to 100,000 vehicles has already been moved to the States and China to bypass problems with the supply of wiring harnesses. According to Diess, the situation in Ukraine could affect the global economy more than the coronavirus pandemic.
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