DETROIT (April 16, 3:25 p.m. ET) — The automotive industry is taking steps to avert a “severe” shortage of resin with an emergency summit Tuesday at an undisclosed location in metro Detroit.
The shortage of nylon 12 — used to make fuel tanks, brake components and seat fabrics— stems from a March 31 explosion at Germany-based Evonik Industries AG that killed two employees.
As many as 200 representatives are expected to attend the meeting, said Neil DeKoker, CEO of the Troy, Mich.-based Original Equipment Suppliers Association.
The meeting was originally scheduled to take place at the Automotive Industry Action Group's Southfield, Mich. headquarters but has been moved to another location because more room was required.
In a letter to customers last week, William Kozyra, chairman of Auburn Hills, Mich.-based TI Automotive Ltd., said: “The shortage is real and immediate. The possibility of production interruptions at some of your facilities in the next few weeks is high.”
Evonik's plant was one of the largest producers of nylon 12 in the world, and suppliers are expecting interruptions as they seek out alternative sourcing, Novi, Mich.-based Cooper-Standard Automotive Inc. said in an emailed statement.
“We are working closely with our customers and suppliers to identify alternative solutions to minimize or avoid any impact, the supplier said in the statement.
Suppliers Johnson Controls Inc., which operates its automotive seating business out of Plymouth, Mich., and Southfield-based Lear Corp. do not directly use nylon 12 but are evaluating the affects of a shortage.
“We don't use this resin directly,” Mel Stephens, Lear's senior vice president of communications, facilities and investor relations, wrote in an email. “We are in the process of trying to evaluate any indirect impacts, if any.”
As automakers work with their supply base, no immediate plans are in place to curb production, Mike Goss, general manager of external affairs for Farmington Hills, Mich.-based Toyota Motor Engineering & Manufacturing North America Inc., said in an emailed statement.
“The material provided by Evonik is in our North American supply chain, but until we complete an assessment with our suppliers, the impact is unknown. At this time, there is no need to adjust production, and we will continue to work closely with our suppliers to ensure ongoing production.”
DuPont Automotive, which operates its North American automotive coatings business in Mt. Clemens, Mich., is fielding calls from automakers and suppliers on alternative resins, said Carole Davies, manager of marketing communications programs for DuPont.
We don't make [nylon] 12, but we do have materials that we think may be used in similar materials,” she said. “We're working with customers to see if we can alleviate some of the pressure” caused by the shortage.
This incident mirrors the result of the March 2011 earthquake and tsunami in Japan that created shortages across the supply chain, followed by a fire during the same month at Magna International Inc.'s Howell, Mich., interiors plant.
Jay Baron, president, chairman and CEO of the Ann Arbor, Mich.-based Center for Automotive Research, said the shortages over the past 13 months demonstrate that the industry needs further evaluation of its supply chain capabilities.
“This is the third major disruption within about a year's time and a situation that should force more consideration to evaluate the depth of the supply chain and its robustness,” Baron said.