Ukraine invasion hurts flow of wire harnesses to carmakers

Fujikura

02/03/2022 14:21

By Christina Amann and Nick Carey
    March 2 (Reuters) - Carmakers including Germany's Volkswagen
 VOWG_p.DE , BMW  BMWG.DE  and Porsche are struggling to obtain
crucial wire harnesses as suppliers in western Ukraine have been
shuttered by the Russian invasion, forcing them to curtail
production.
    Production of the part, needed for organizing miles of
vehicle cables, has affected suppliers like Leoni  LEOGn.DE ,
Fujijura  5803.T  and Nexans  NEXS.PA , and rippled through to
major carmakers.   
    Delivery bottlenecks have already hit some assembly plants
of World No. 2 automaker Volkwagen, while Porsche's luxury unit
has suspended production at its Leipzig plant.  urn:newsml:reuters.com:*:nS8N2QT0AJ
 urn:newsml:reuters.com:*:nL8N2V5396 
    Rival BMW has also been affected.
    "Due to supply bottlenecks, interruptions to our production
will occur," BMW said in a statement. "We are in intensive
discussions with our suppliers."
    A wire harness is a vital set of parts which neatly bundle
up to 5 kilometres (3.1 miles) of cables in the average car.
Unique to each car model, vehicles cannot be built without them.
    Suppliers like Leoni, which has two wire harness factories
in western Ukraine, are scrambling to "compensate for production
losses" and "interruptions in our two plants in Stryi and
Kolomyja, triggered by the Russian war of aggression against
Ukraine," Leoni said in a statement.
    Leoni said it had formed a task force to evaluate
developments.
    To cut costs and better compete in the global car industry,
suppliers including Germany's Forschner, Kromberg & Schubert,
Prettl, SEBN and Japan's Yazaki have built up a hefty wire
harness production sector in Ukraine, which also has a skilled
work force. 
    UkraineInvest, the Ukrainian government's investment
promotion office, says 22 automotive companies have invested
more than $600 million in 38 plants - many, though not all
producing wire harnesses - employing over 60,000 Ukrainians.
    Those plants are close to car factories in Germany and the
manufacturing hubs that international carmakers have built in
central Europe. 
    Industry sources say it could take months for suppliers to
beef up capacity at alternative locations in their networks -
requiring factory space, machinery and tools, workers and
financing.
    Prior to the invasion, auto parts maker Aptiv Plc  APTV.N 
spent months doing just that - shifting high-volume production
of parts for vehicles out of its two plants in Ukraine ahead of
possible hostilities, the company's chief executive said last
week.  urn:newsml:reuters.com:*:nL1N2V016X

 (Reporting by Nick Carey;
Editing by Bernadette Baum)
 ((nick.carey@thomsonreuters.com; +44 7385 414 954;))