Automakers were severely affected in 2020 by the COVID-19 pandemic, forcing them to cut back on supply contract deliveries. That affected plastic moldings, but as it turns out, it also left carmakers with such insufficient supply of electronic chips that vehicle production was cut just at the time they should be recovering from pandemic effects.
Today's vehicles depended on advanced electronics, and inadequate or no chip stocks at carmakers — who typically depend on just-in-time delivery of chips from Asia — something just had to give.
Probably most dramatic among the carmakers' moves has been the decision of Opel to stop car production in Eisenach, Germany, for three months up to the end of 2021. Such measures can only result in collateral damage at carmakers' suppliers, and it hasn't taken long for this to happen.
Two German molders have already filed for insolvency at the end of September, giving as the reason the chip shortage at their carmaker customers. The two companies — Diepersdorf-based Bolta-Werke GmbH, and Herford-headquartered Fakuma 2021 exhibitor Heinze Gruppe, through its Heinze Kunststofftechnik GmbH subsidiary — both specialize in plated and other metal-effect decorated plastic moldings, while Heinze Gruppe subsidiary Krallmann is heavily involved in highly integrated and lightweight plastics molding solutions, primarily in automotive applications.
Without giving details of companies involved, the local Westfalen Blatt newspaper reported that three Heinze subsidiary companies are not affected by the group insolvency.
Heinze Gruppe owner and Managing Director Jörg Tilmes, who has also been managing director of Krallmann since mid-2020, described the situation realistically, simply saying in resignation: "The automobile makers are not producing anymore because they can't get any semiconductors. So they also don't need any more plastic parts."
Automaker customers and suppliers of both Heinze Gruppe and Bolta-Werke are reported as doing everything they can to ease the situation at these companies. It is indeed a serious situation, as consultants Alix Partners estimated in September that the chip shortage will cost the global automotive industry 179 billion euros ($206.8 million) of lost sales alone in 2021, due to the sale of 7.7 million fewer vehicles than in 2020.
Staff at the Heinze booth at Fakuma confirmed that the insolvency administrator for Heinze Gruppe has made assurances, together with Tilmes and in consultation with the works council, that business operations will continue. There will be no cuts among the 1,100 staff, who will not only continue to be paid out of insolvency contingencies, but also receive their Christmas bonus as usual. In contrast to Fakuma 2018, there is in 2021 no longer a large display of parts on the Heinze Gruppe booth.
Without giving details, the insolvency administrator says potential strategic industrial investors have shown interest in the group.
Heinze Gruppe annual sales, primarily in plastics parts production and mold making, amounted to 112.9 million euros ($130 million) in 2019, of which 77 million euros ($89 million) were from the automotive market.
In mid-2020, the company said its sales for the year would be down 17 percent. It admitted at the time to being in an advanced liquidity crisis, but had secured financial arrangements that should have covered it through to 2022. Bolta-Werke achieved 128.9 million euros ($149 million) in 2019 sales from part production and 55.9 million euros ($64.5 million) in toolmaking.
Although the GKV association of plastics processing companies appears not to have specifically commented on the Heinze and Bolta-Werke situations, Boris Engelhardt, main managing director of the WDK German rubber industry trade association, has used the occasion to say about carmakers and their suppliers: "If we don't come as soon as possible to a different way of dealing with each other, we will experience a wave of insolvencies by Christmas among small- and medium-sized automotive suppliers."
Engelhardt pointed out that suppliers are sitting on parts filling their stores that they made for their automotive customers, leaving the suppliers perilously strapped for cash.
Automakers have been canceling orders at short notice of sometimes just one day, Engelhardt said, with one case known to him of an already loaded truck having to be unloaded upon order call-off cancellation.