BMW Slows Some Production Due to Parts Shortage From Supplier Bosch
30 May 2017 - 1:52AM
Dow Jones News
By William Boston
BERLIN -- BMW AG, the German luxury car maker, is slowing or
halting production of certain models in response to a shortage of
parts caused by delivery problems from supplier Bosch GmbH.
The hiccups in the normally smooth operation show how dependent
manufacturers are on a global, smoothly running supply chain. Even
small disruptions anywhere along the line can cascade into delays
in getting the company's big money-making products off the assembly
line and into showrooms.
In BMW's case, the culprit is a "Lenkergetriebe," or steering
gears manufactured by Stuttgart-based auto-parts giant Bosch and
used in BMW's 1-Series, 2-Series, 3-Series and 4-Series compact
cars.
"Our supplier Bosch is not currently able to provide us with a
sufficient number of steering gears," said Markus Duesmann, BMW
board member in charge of purchasing and supplier network.
Bosch, in turn, said the trouble arose when a supplier in Italy
experienced difficulties in delivering the casing for the steering
gears. Bosch declined to identify the supplier.
As a result of the shortages, production is restricted at
several BMW plants in Germany, the Tiexi plant in Shenyang, China,
and at the company's plant in Rosslyn, South Africa, a BMW
spokesman said.
"Automotive value chains are international. An interruption in
delivery of parts from a partner in Europe can therefore also have
implications in China," said Mr. Duesmann.
"The vehicle is not complete until all parts, most of which are
supplied "just-in-time", are installed. It is, therefore,
understandable how a missing part -- even if only a small one, as
in this case -- can have a major impact."
BMW shares were trading about 0.25% higher at EUR84.52 in late
afternoon in Frankfurt. Analysts at Equinet, a brokerage, said the
costs to the company were likely manageable unless the interruption
of production continued for several days.
"Bosch is working urgently in a task force together with BMW and
the supplier to relieve the supply squeeze as soon as possible and
keep the impact as limited as possible," Bosch said in a
statement.
BMW said it doesn't know the extent of the financial damage or
impact on production and sales caused by the break in production. A
spokesman said the company hoped to restart assembly at the plants
next week, but wasn't certain that would be possible.
BMW's plant in Leipzig in eastern Germany has been shut down
since Friday. Plants in China and South Africa have brought forward
planned production breaks and extended their duration.
Write to William Boston at william.boston@wsj.com
(END) Dow Jones Newswires
May 29, 2017 11:37 ET (15:37 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.