Automakers Scramble to Avoid Resin-Related Shut Down
As more than ninety automakers rolled out their newest models at the Beijing Auto Show Monday, there is growing optimism the industry will avoid production shutdowns due a shortage of a resin used in auto parts.
The resin, commonly called nylon-12, has been in short supply since an explosion at a German plant halted production of a key ingredient used in making the resin.
“We’re pretty sure that we’ve got our hands on this," General Motors Chairman and CEO Dan Akerson told CNBC. "We know we have inventory that will get us through good part of May and then I think things will sort themselves out, but we’re pretty sure we have it in hand.”
Chrysler CEO Sergio Marchionne is also guardedly optimistic.
"We were talking to our people overnight in Europe and the U.S. There is a better than 50 percent chance that we will find alternatives to the resin issue," Marchionne said while attending the Beijing Auto Show.
Toyota CEO Akio Toyoda told CNBC his company is also studying and working on resolving potential problems due to the resin shortage.
For the auto industry, finding substitute coatings to be used on fuel lines, brake lines, and engine components is a race against time. Auto parts suppliers have a small window of time to find substitutes for nylon-12 that will meet performance and safety standards. In some cases, there's little proof the possible substitute resins can make engine components perform as needed for thousands of miles.
Chrysler's Marchionne summed up the tenuous nature of the resin issue saying, "I sincerely hope I have not jinxed the odds because I have said that it is a tough issue. It would be a true shame if we had to stop the production machine because we have to deal with this."
Marchionne hopes to have a better sense of resolving the resin shortage when he talks with Wall Street analysts after Chrysler's earnings call on Thursday.
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