Factory Explosion Threatens World's Car Industry
A huge explosion in an industrial park in Marl, Germany, killed two. It also could bring the world’s auto industry to its knees “in the next few weeks,” writes Bloomberg.
The explosion destroyed production facilities of an obscure chemical called Cyclododecatriene. CDT is a key element of PA-12, a resin used in most fuel and brake-line coatings, flexible hoses and quick connectors supplied to automakers. A few days ago, TI Automotive of Auburn Hills, Michigan, wrote to customers:
“The shortage is real and immediate. The possibility of production interruptions at some of your facilities in the next few weeks is high.”
TI Automotive supplies brake and fuel lines, fuel tanks and pumps to all major automakers, including GM, Ford, Toyota, and Volkswagen. Its customer list reads like a who’s who of the auto industry.
Automakers are aware of the situation but have not reported any outages.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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[snark] Clearly this is another proof point of how awful the Chevrolet Volt is. [/snark]
Bertel says GM is "channel-stuffing", GM says it was just planning ahead for such a contingency! I bet the boys in the Ren Cen are laughing at Toyota and Hyundai for keeping their inventory so low, saying "suckers!"
Evonik Industries, a subsidiary of Degussa, is not the only maker of Cyclododecatriene. DuPont Nylon makes it in Victoria, Texas. One would think that the Bloomberg reporters would have at least thought to see if Degussa has any competitors.
Used car market will remain robust for a while.