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Auto Suppliers, in Survey, Say COVID-19 Hitting Their Operations

Bill Koenig
By Bill Koenig Senior Editor, SME Media

Automotive suppliers participating in a global survey said the novel coronavirus (COVID-19) is hitting their operations, with major uncertainty about what’s next.

“The rapid outbreak of COVID-19 has left the entire automotive supply chain grappling with unforeseen challenges,” business information company IHS Markit said in a report about the survey

Issues that suppliers are confronting “include OEM shutdowns, output reduction, lack of sufficient labor and raw material shortages,” IHS Markit said.

IHS Markit surveyed 124 suppliers from March 16 through March 19. Of that total, 53 were in Asia, 29 in Europe and 42 from North and South America. The respondents have more than 1,500 manufacturing sites.

About one-third of respondents said COVID-19 had produced moderate to severe impact. Almost half, 46 percent, said the coronavirus had resulted in a limited impact.

At the same time, suppliers participating in the survey said there’s a lot of uncertainty stemming from the highly contagious virus.

“Even if suppliers are not currently experiencing a disruption of any type, there is still significant concern around COVID-19 pandemic’s impact on supplier operations and business outlook,” IHS Markit said. About 60 percent of the suppliers indicated “they are either concerned or very concerned about disruption in the automotive supply chain.”

An example of the uncertainty facing some suppliers occurred today.

Ford Motor Co. said it postponed plans to reopen its North American factories because of COVID-19. The Dearborn, Mich.-based automaker had scheduled some operations to restart as early as next week. No new restart date was set. The company’s Rawsonville Components plant will reopen April 20 to make ventilators in collaboration with GE Healthcare.

During the time of the survey, according to IHS Market, “the biggest concerns among suppliers were ‘weakness in demand’ and ‘availability of raw material’ and a large amount of the supplier executives we reached out to were worried as to when demand will come back.”

The biggest uncertainty is how long the coronavirus will affect the industry.

“Suppliers say the COVID-19 pandemic is increasingly reducing visibility into when customers' plants will be fully operational and is also creating the potential for additional supply chain disruptions,” according to the report.

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