Suppliers Warn of Possible Shortage of Automotive Fuel and Brake Components

The shortage of a special resin, PA-12, used in the manufacture of brake and fuel components could interrupt automotive production worldwide.

In a letter to customers, TI Automotive Ltd. chairman William Kozyra warned, “The possibility of production interruptions at some of your facilities in the next few weeks is high.” TI Automotive Ltd. is one of the world’s leading manufacturers of automotive fluid storage, carrying and delivery systems and supplies fuel and brake lines, and fuel pumps and tanks to a number of automakers, including Ford Motor Company, General Motors Company, Toyota Motor Corporation and Volkswagen AG.

At the heart of the impending crisis, is the March 31 explosion at the Evonik Industries AG chemical plant in Marl, Germany. The explosion killed two workers and has resulted in a “severe” shortage of cyclododecatriene (CDT), a chemical used in the production of PA-12 resin.

According to Citigroup analyst Itay Michaeli, however, there are a handful of other chemical manufacturers who produce PA-12. And another resin, known as PA-10, may also be a suitable substitute. In a note, Michaeli said, “The risk of disruptions appears serious, but our initial impression is that the scale of the problem isn’t very severe.”

PA-12 resin is used in the manufacture of brake and fuel-line coatings, quick connectors and flexible fuel hoses.  According to Kozyra the global supply of cyclododecatriene is currently “very limited.”

In an email response to Kozyra’s letter, Toyota spokesman Mike Goss said, “We are currently assessing the situation in North America. Until that assessment is complete, any impact on our production is unknown.”

According to spokeswoman Katie Hepler, Chrysler Group LLC is “monitoring the situation with our supply base.” In an email, Hepler said, “At this time we do not anticipate any production impacts.”

GM spokeswoman Kelly Cusinato said the company is currently assessing the situation with its suppliers, and Ford spokesman Todd Nissen said, “We have not experienced any production disruptions at this point.” He said the company is monitoring the situation.

Next Tuesday, TI Automotive and a number of its competitors, including Martinrea International Inc., Cooper-Standard Automotive Inc. and Rayconnect Inc. will hold a summit in Southfield, Michigan to discuss the situation. The summit will reportedly be moderated by the Automotive Industry Action Group.

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