A fatal explosion March 31 at a chemical plant in Germany has created a problem for the global automotive industry. According to Bloomberg, the accident has created a “severe” shortage of a plastic resin used in the production of fuel and brake components. This may hinder automotive production over the next few weeks, Michigan-based global automotive parts producer TI Automotive Ltd. told the automotive press.
Blast rocks the industry
IT Automotive Ltd. Chairman William Kozyra stated in a letter to his company’s clients that the resin shortage is “real and immediate.”
“The possibility of production interruptions at some of your facilities in the next few weeks is high,” writes Kozyra.
The blast heard across the industry occurred on March 31 at a plant for German chemical company Evonik Industries AG. The Marl location blast killed two workers and led to the “complete loss” of Cyclododecatriene (CDT), a chemical compound that is needed to produce the resin PA-12. According to Kozyra, global CDT capacity is “very limited.”
Evonik is the world’s primary producer of CDT and the primary supplier of CDT to other chemical companies to produce the PA-12 resin, according to TI Automotive Ltd.’s press release.
Used in automotive fuel and brake components
PA-12 appears in nearly all fuel- and brake-line coatings, flexible hoses and connectors provided to global automakers. Companies like TI Automotive Ltd. supply the products to the automakers, in addition to fuel tanks and fuel pumps. General Motors Co., Ford Motor Co., Toyota Motor Corp. and Volkswagen AG are all beneficiaries of the TI Automotive supply chain.
Automakers prepare for the worst
Global automakers are evaluating whether resin-dependent part supply and related vehicle production schedules will have to be adjusted in order to account for the massive loss of Cyclododecatriene.
“We are aware,” said Toyota spokesman Mike Goss via email. “We are currently assessing the situation in North America. Until that assessment is complete, any impact on our production is unknown.”
Chrysler Group LLC is also preparing to make changes once analysis of the damage to production schedules is complete.
“(We are) monitoring the situation with our supply base,” said company spokeswoman Katie Hepler. “At this time we do not anticipate any production impacts.”
Representatives of General Motors, Ford, Nissan and Honda have gone on record as saying that the automakers are currently researching the scope of the resin problem, and no estimates can be made at this time as to whether production will be affected.
Meeting on April 17
TI Automotive Ltd. and major competitors like Cooper-Standard Automotive, Martinrea International Inc. and Rayconnect Inc. have planned a summit meeting for April 17 with global automakers and larger part suppliers regarding the resin shortage.
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