There seems to be a massive supplier storm brewing as the full impact of last month’s huge explosion at Evonik’s Nylon 12 resin plant in Germany starts to be felt.
The fatal blast, which killed two workers at Evonik’s Marl plant, has sent global automakers and their suppliers into a frenzied burst of activity as they desperately scramble to find replacement production – and validation processes – for any Nylon 12 substitute.
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Hot on the heels of last year’s tsunami and the Thai floods, yet another catastrophic, albeit man-made, disaster has exposed global supply fault lines.
Nylon 12 – hitherto an unsung element in the component world – has shot to the top of many automakers’ agendas given its critical use for coatings and connector applications in fuel handling and brake systems.
The centralisation of such a key element in Germany has given the worldwide supplier community jitters and prompted a raft of chemical boffins to get together in a bid to find new solutions – and validate them.
Only this week, the influential Automotive Industry Action Group (AIAG) – the supplier and OEM body – held an emergency session in Michigan to address the situation.
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By GlobalDataStaying in the US, the Original Equipment Suppliers Association (OESA) president and CEO, Neil De Koker, conceded to me from his Troy office the situation was grave but significant resource was being thrown at the problem.
“It is serious, but the action of an awful lot of people working together is starting to look like we are getting results,” he said. “We are working very, very hard with the vehicle manufacturers and suppliers to get a handle on the situation.
“My feeling is while this is a serious situation, considering global supply, there is going to be a solution that can be implemented with the diversion of existing supplies until the situation gets back into control.”
Not all generic bodies have been as vocal however. European automotive supplier association, CLEPA, declined to comment to me on the situation, a puzzling stance given some commentators’ views that any shortages could hit Europe hardest and first.
CLEPA’s silence can’t continue surely? If this situation really is as serious as many observers are suggesting, the pan-European body may have to make some sort of comment, if nothing else, to publicly assuage fears of a supply shut-down.
Meanwhile, across the other side of the world, CLEPA and OESA’s Japanese equivalent, JAPIA, was slightly more forthcoming, but not much.
“They are worried about the situation in Germany,” sources at JAPIA told me from Tokyo. “Many of our member companies ask us about the situation.”
Pressed as to what JAPIA’s stance was, the response was cautious, guarded, perhaps driven by its members’ fresh memories of last year’s devastating earthquake, not to mention the Thai floods.
“The situation in Germany – so far [for] a Japanese company it has maybe [an] influence,” replied the JAPIA spokeswoman carefully.
So much for the supplier bodies, but the Nylon 12 issue is also severely taxing the OEMs, anxiously eyeing yet another possible and huge disruption to the global component chain.
Take this from GM to me: “We have determined some Tier 1 suppliers have had exposure as a result of the explosion at the Evonik Industries plant in Marl.
“We have implemented a global work team, comprised of GM purchasing, engineering and suppliers, including Evonik, and are working to allocate and prioritise existing inventories and also find alternative process material solutions.”
Behind GM’s company speak clearly lies a sense of urgency this situation needs addressing and fast, but the automaker was also joined at the AIAG meeting by the other two members of the Detroit OEM triumvirate, Chrysler and Ford, together with global suppliers such as BASF, Delphi, DuPont Automotive, Eaton and Martinrea International, among others.
There is one more bizarre twist to the tale: Plastics Europe – which claims to be the only European trade association headquartered in Brussels with representatives across the European Union’s 27 member states – was equally tight-lipped when it came to discussing the situation.
“We have got strict rules talking about plastics,” a Plastics Europe spokesman told me. “As soon as there is only one producer or less than five, we can not give facts and figures about this.”
Hmm. I’m not expecting Plastics Europe to offer any comments on individual members, rather it would be extremely useful to gauge its opinion on the impact such a shortage of Nylon 12 could have on the global supply chain.
OESA, CLEPA, JAPIA, Plastics Europe, they are all treading carefully when it comes to public pronouncements but if the worldwide supply chain can be so affected by one plant in Germany, what other potential fissures in the system potentially lie ahead?
