SPECIAL EDITION -- Manufacturers working to assess impact of explosion at part supplier's plant

4/30/2012

A recent explosion at a German chemical plant owned by Evonik Industries AG is expected to impact the global production of a plastic that is used for brake and fuel systems in many vehicle models.

Evonik makes a chemical called CDT, which is critical to the production of a plastic resin – known as PA-12 or nylon-12 – that is used to make the brake lines, fuel lines and other components of vehicles produced by the auto manufacturers.

As a result of the explosion, Evonik was forced to shut down its plant in Marl, Germany indefinitely.  The company said this week that it does not expect to reopen the plant for at least three months, and cautioned that it may not resume full production until the beginning of winter.

At this point, it is unclear exactly what impact the plant shutdown will have on vehicle production. Automakers have told Wheels that they are continuing to monitor the situation and their supply bases, and none have announced any production cuts so far.

In addition, approximately 200 automotive industry leaders, including representatives from the automakers, gathered Tuesday near Detroit to forecast the industry-wide implications of the Evonik plant shutdown and discuss possible next steps.  After the meeting, some automakers expressed optimism that the plastic resin shortage can be mitigated by tapping into alternative supply options, while other industry sources said the situation will likely have a significant effect on global auto production.

Wheels remains in constant contact with the manufacturers, and we are following the progress of the situation very closely.  We will continue to keep clients apprised of any major developments that arise as manufacturers work to assess and mitigate the impact of the Evonik plant shutdown.