MAN, the German truckmaker, has been forced to furlough about 11,000 employees after the war in Ukraine led to a “massive” shortage of wiring harnesses supplied by factories in the country.
The group, which is owned by Volkswagen, disclosed that plants in Munich and Krakow had been shut since March 14, and production had been cut back at three other sites, including its engine factory in Nuremberg.
“Suppliers of truck wiring harnesses cannot produce at their Ukrainian sites or can only produce to a very limited extent,” MAN said on Wednesday. “This threatens a loss of truck production for several weeks and a massive reduction in production in the second quarter.”
Workers will be put on so-called short-time work schemes, which will see them compensated for 80 per cent of the lost income caused by cancelled shifts through a mix of support from the government and MAN itself.
Shutdowns at Ukraine’s harness factories have already forced both Volkswagen and BMW to cancel shifts or close plants for brief periods.
Most of Ukraine’s harness plants, which are located in the west of the country, have reopened, with staff keen to return to work, according to managers at several companies with facilities in the country.
Leoni, which owns two sites on the west of Ukraine, said last week that both its factories were running again.
“It is both impressive and moving how our employees are determined not to let the situation get the best of them but stand up for their country and for their way of life,” said Aldo Kamper, chief executive of Leoni.
Leoni, which has sites across Europe and north Africa, has also begun duplicating equipment to keep production flowing. Other companies with operations in Ukraine, which include Aptiv and Kromberg & Schubert, have also restarted production, according to people inside the industry.
One carmaker that buys parts from Ukraine said that its supplier in the country was manufacturing more parts than before the invasion to compensate for gaps in production.
MAN’s predicament is a contrast with that of its key competitor, Daimler Truck, which said last week that it did not source wiring harnesses from Ukraine.
MAN’s owner VW — which has several dozen people working at a football stadium in Wolfsburg as part of a task force dedicated to easing supply problems caused by the war — had also said that constraints on production at its passenger car brands were beginning to ease.
But the truckmaker said it had not fared well in trying to secure supply.
“Immediately after the outbreak of war, we began, among other things, to duplicate Ukrainian supplier structures for truck wiring harnesses in other countries, said MAN chief executive Alexander Vlaskamp. “However, this is taking several months.”
He added that “as a sign of solidarity with the workforce”, he and his management board would “be forgoing a considerable amount of pay over the next three months”.
The pause in production comes just months after MAN, alongside almost all other automakers, was forced to put workers on furlough because of persistent shortages in semiconductors.
But while some vehicles can be built without certain chips, and even delivered to customers without full functionality, it is usually impossible to begin constructing a car or truck without wiring harnesses.
MAN said it was offering customers the chance to cancel orders.
Source: Financial Times
