Dusseldorf, Munich Russia’s war of aggression in Ukraine is becoming a growing problem for carmakers in Europe. After Volkswagen, Porsche and BMW also have to interrupt parts of their production. At Audi, the production lines for the A4 and A5 models will be shut down at the Ingolstadt plant from Monday until March 11th. In Neckarsulm, production of the A6 and A7 will be suspended from Monday to March 18th.
Also affected are the production of the electric model E-Tron GT and the sports car R8 from Monday in the Böllinger Höfe. “In view of the current situation, Audi expects further changes at the end of this week,” said the VW subsidiary. On Wednesday evening, BMW then announced that production would be suspended for a week in the plants at the Munich headquarters, in Dingolfing and Steyr, as well as in the mini plants in Oxford and in the Netherlands. How it goes on after that is open.
In Leipzig, one of the two shifts will be omitted, said a spokesman for the car company. In Regensburg, due to a lack of semiconductors, production is also only carried out in one-shift operation. Around 7,000 employees are affected at the main plant in Munich. The company spokesman said that it is still being clarified whether they will be on short-time work or whether the forced break will be charged via time accounts.
At the largest European BMW plant in Dingolfing, around 10,000 employees are affected by the production stop. Short-time work has already been agreed for the 3,200 employees at the Austrian BMW plant in Steyr. On Wednesday evening, Mercedes also announced the failures expected by industry observers: As of next week, the company will throttle production at the Sindelfingen plant, according to group circles. The luxurious sedans E-Class, S-Class and EQS roll off the assembly line at the plant.
Top jobs of the day
Find the best jobs now and
be notified by email.
Mercedes itself says that the shift planning in individual plants would have to be adjusted. “We reassess the situation on a daily basis,” the company said. Together with its suppliers, Mercedes is “working intensively on solutions” to secure the supply chains. This would also include the “relocation of production volumes to other locations of our suppliers”. It is likely to affect other European automakers as well.
The supply of cable harnesses is particularly problematic. A large number of suppliers manufacture these in the Ukraine for the European market. These include Leoni, Kromberg & Schubert and SEBN. The German supplier Kostal manufactures on-board converters in a plant in Kyiv and two plants in the immediate vicinity of the Ukrainian capital, which is under heavy shelling. The Irish supplier Aptiv, which among other things manufactures wiring systems, has three production sites in the Ukraine.
Bosch announced on Wednesday that it would be closing locations in Ukraine. The foundation company called on all 360 employees to go to safety. Bosch generates annual sales of around 170 million euros in the Ukraine. In Krakovets in the west of the country, Bosch repairs starters for the aftermarket. According to the company, production has been idle since Thursday last week.
According to Ukraineinvest, a state agency promoting investments in Ukraine, the country has 22 foreign companies producing parts for the auto industry in 38 factories.
Cable harnesses require a lot of manual work
The works of the German cable specialist Leoni are located in the southwest of the country. At the beginning of the war, however, Russia also fired at targets there with rockets. Corporate circles say that two rockets hit the region where Leoni operates its plants.
Numerous suppliers manufacture cable harnesses in the Ukraine.
(Photo: Leoni_Group)
Leoni is working flat out to maintain production. “A task force that has been reinforced several times is working almost around the clock to analyze the dynamic development on site,” the company said. It is obvious that the production outages in Ukraine would have consequences for availability, “especially in the European automotive industry”.
Although the Ukraine is not the undisputed center of the wiring harness industry, it is one of the most important markets in the industry alongside Romania, Morocco, Tunisia and Serbia. The reason is the low labor costs. And they are crucial: Because the proportion of manual activities in the production of wire harnesses is more than 30 percent.
>> Read about this: VW and Skoda is missing parts from the Ukraine – Porsche plans to stop production
The reason why car manufacturers like VW or BMW have to cut back production in their German plants just a few days after the failure of individual Ukrainian suppliers is simple: Wiring harnesses are considered non-storable. The components vary from car to car. If the production of individual wiring harnesses is stopped, as was the case after Russian troops invaded the Ukraine, the major vehicle manufacturers immediately notice this in their own plants.
The logistical situation is also problematic. Because truck drivers who export goods from Ukraine are mostly male and in the age group that is currently not allowed to leave the country.
“It’s going to cost a lot of money”
Now the crisis teams are meeting. According to industry circles, relocation plans are being examined to compensate for the losses in Ukraine. Volumes in existing plants outside Ukraine are likely to be ramped up quickly. But that also takes two to three months.
The industry will not be able to avoid hiring many unskilled workers. The reject rates are likely to increase as a result. “It’s going to cost a lot of money,” says an insider.
However, not only production in Ukraine is a challenge for the auto industry, notes Stefan Bratzel, director of the Center of Automotive Management (CAM). “Fundamental questions arise: In view of the war in Ukraine, is it still permissible to produce in Russia?” asks the car expert. “You have to be prepared for the fact that more and more parts are missing. Vehicle production in Europe will become more expensive overall,” says Bratzel.
More: The first German companies are withdrawing from business in Russia