Resin shortage could interrupt production, supplier says

Resin shortage could interrupt production, supplier says
Craig Trudell
and Saijel Kishan
Automotive News | April 13, 2012 – 2:34 pm EST
UPDATED: 4/13/12 4:42 pm ET – automaker reactions added
DETROIT (Bloomberg) — The global automotive industry faces a “severe” shortage of a resin used to make fuel and brake components that may interrupt production “in the next few weeks,” according to a top supplier executive.
“The shortage is real and immediate,” William Kozyra, chairman of TI Automotive Ltd., wrote in a letter to customers that was obtained by Bloomberg and confirmed by Frank Buscemi, a company spokesman. “The possibility of production interruptions at some of your facilities in the next few weeks is high.”
The March 31 blast at a plant of chemical maker Evonik Industries AG in the city of Marl in Germany’s Ruhr valley is leading to a shortage of a resin called PA-12, Kozyra wrote. The explosion, which killed two, resulted in a “complete loss” of making Cyclododecatriene, also called CDT and a key element of PA-12, he said. Global capacity of CDT is “very limited,” according to the letter.
The resin is used in most fuel and brake-line coatings, flexible hoses and quick connectors supplied to automakers, Kozyra said in the letter. TI Automotive supplies brake and fuel lines, as well as fuel tanks and pumps to all major automakers, including General Motors Co., Ford Motor Co., Toyota Motor Corp. and Volkswagen AG, according to its Web site.
Evonik produces its own CDT and is a “key” supplier of the material to other manufacturers of PA-12, according to the letter.
Automakers monitor
Automakers are evaluating supply and production plans.
“We are aware,” Mike Goss, a Toyota spokesman, said in an e-mail. “We are currently assessing the situation in North America. Until that assessment is complete, any impact on our production is unknown.”
Chrysler Group LLC is “monitoring the situation with our supply base,” spokeswoman Katie Hepler said in an e-mail. “At this time we do not anticipate any production impacts.”
GM is communicating with its supply base and information about the scope of the problem isn’t immediately available, Kelly Cusinato, a spokswoman, said in a telephone interview.
“We’re aware of the situation and are monitoring it with our suppliers,” Todd Nissen, a Ford spokesman, said in an e-mail. “We have not experienced any production disruptions at this point.”
Nissan Motor Co.’s Brian Brockman and Honda Motor Co.’s Ed Miller said they couldn’t immediately comment.
Emergency summit
TI Automotive and competitors including Cooper-Standard Automotive Inc., Martinrea International Inc., and Rayconnect Inc., are holding a summit involving automakers and large suppliers about the shortage on April 17, according to the letter. The meeting will be moderated by the Automotive Industry Action Group in Southfield, Mich.
Joel Karczewski, director of commercial development for the Automotive Industry Action Group, deferred to TI Automotive for comment about the summit.

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