The German workers union for the supplier industry has criticised the ‘brutal’ cost-cutting in the automotive industry and has raised concerns about the future of medium-sized suppliers.
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The union, the Arbetisgemeinschaft Zulieferindustrie (ArGeZ), is forecasting a slowdown in growth for German suppliers because of rising raw material and energy costs and cost-cutting programmes, reported dpa. It nevertheless expects the sector to grow 4% this year. Last year the branch grew more than 8% to give it a turnover of around EUR215bn.
A spokesperson for the ArGeZ, was particularly critical of BMW’s cost-cutting programme. He said that medium-sized suppliers were bearing the brunt of the cost reduction measures.
BMW has reportedly been asking for price cuts of 15 to 20% from suppliers.
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By GlobalData
