Who Protects The Medium-sized Supplier Industry?

2023 Author : Hannah Pearcy | [email protected] . Last modified: 2023-06-05 23:50

A radical demolition of the supply chains must not take place, so the demand of the ArGeZ, the working group supplier industry. Since the end of last week, automobile manufacturers such as VW, BMW and Daimler have announced plant closures across Europe. The federal government had announced bridging loans via KfW programs for industry, but according to the ArGeZ they were not accessible to everyone.

"In the hour of need, you have to stand together!" Said Christian Vietmeyer, spokesman for the ArGeZ. ArGeZ, an alliance of supply companies in Germany and its business associations, has been committed to a fair partnership between the automotive industry and its suppliers for years.

Production only started again at the beginning of May

The plant closings of VW, BMW, Daimler and other automobile manufacturers are understandable given the dramatic pandemic. A radical demolition of the supply chains should not take place. "Specifically, this means," says Vietmeyer, "that we expect customers in the value chain to accept the goods until at least March 27, 2020 , because only then will a coordinated and joint restart of production be possible - even in the supply chain."

Christian Vietmeyer, spokesman for the ArGeZ

The working group of the supply industry assumes that delivery delays can lead to a restart of production until the beginning of May, since goods that are still in China will hardly have arrived in the European ports beforehand. The ArGeZ therefore expects the production to be interrupted by April 20, 2020. You can expect clear communication from the car manufacturers about the production stop and further planning.

Liquidity bottlenecks at suppliers

The expected interruption in production lasting several weeks will lead to liquidity bottlenecks for the majority of the supplier companies. According to the ArGeZ, the loan programs currently approved by the Federal Government through KfW are not yet sufficient . For many companies, loans are not a prospect, especially with a view to the time after the crisis, they now need significant equity support.

This is how the ArGeZ appeals: the federal government must be willing to grant subsidies to suppliers. In addition, the rules of the ECB and BAFIN have to be adapted to the specific circumstances for a limited period of time, so that the banks do not have to deposit the usual collateral. Otherwise, not all companies will get a loan from their house banks.

On virtual paths against the corona crisis

In view of the latest developments relating to the corona virus, events are being canceled or postponed in a row. The future can belong to digital platforms that can compensate for this development. With the "Industrial Generation Network", the Vogel Communications Group presents a solution for professionals in the industry. As a digital supplement, the platform enables extensive networking: the focus is on digital encounters and establishing contacts, as well as product presentation and thematic exchange. Tools such as making appointments and video conferences enable professionals to network, make appointments and do research close to the respective branch. The platform thus replaces the currently severely restricted face-to-face communication, especially at trade fairs.

How can the platform help me?

Extension of short-time work to 24 months

The industry has been in a recession phase for about a year, which has led to short-time working. In the given situation, an immediate extension of the duration of short-time work to 24 months is urgently required.

In addition to simplifying short-time working regulations, the ArGeZ also calls for short-term flexibilization of working hours for the companies concerned. Increased infection protection with minimum clearance regulations and changes in the manufacturing processes require a short-term flexibilization of the working time limits . Here, pragmatic handling by the respective district governments is essential.

The preservation of freedom of movement for companies and employees is just as crucial. Restrictions, such as curfews, should only be imposed with a sense of proportion and within the reach of the company.

Transcontinental logistics must remain possible

The same applies to the free movement of goods. Just-in-time production requires functioning transport flows within Europe . But transcontinental logistics must also remain possible. Logistical interruptions in the supply chain - e.g. from upstream suppliers to Germany - must be kept to a minimum. A disruptive stop followed by a restart would lead to long-term downtimes in the German supplier industry. According to the current state of knowledge, raw materials and goods are not carriers of the corona virus.

The current shutdown of the automotive industry threatens the existence of the German supplier industry and its employees. That is why tailor-made financing aids and highly flexible regulations in labor law are urgently required, as is the partnership-based approach in the supply chain,”said Vietmeyer.

Who is the ArGeZ?

The Working Group of the Suppliers Industry (ArGeZ) is an interest group that represents around 9000 - mainly medium-sized - suppliers with around one million employees and a turnover of 218 billion euros. It is supported by seven business associations:

• Wirtschaftsvereinigung Metals eV
• Federal Association of the German Foundry Industry eV
• Gesamtverband der Aluminiumindustrie eV
• Business association of the German rubber industry eV
• Gesamtverband Kunststoffverarbeitende Industrie eV (GKV)
• WSM Steel and Metalworking Association
• Industrieverband Finishing-Yarn-Fabric- Technical Textiles