@Risk

The recession hit auto suppliers hard, and even though some are now reporting significant fourth quarter gains, others are not out of the woods yet.

After all, some auto manufacturers are still restructuring. Volvo Cars, for instance, is reviewing its supplier base, looking for places where it can reduce costs and simplify manufacturing processes.  Ultimately, the company may cut as many as one-third of its suppliers, Volvo’s purchasing chief told Bloomberg last week.

Volvo hasn’t shown a profit since 2005. But, its new owner –the Zhejiang Geely Holding  Group Co. from China –what’s to turn things around, and improving supply chain efficiencies and alignment has become a top priority.  All told, the company has about 450 suppliers, and of these, the 20 largest supply about 70 percent of Volvo’s parts. This short list includes seatbelt and air-bag maker Autoliv Inc., seat manufacturer Johnson Controls Inc., and Robert Bosch GmbH.

Bloomberg reports that Volvo may trim its suppliers down to 300. (more…)

There’s an interesting supply chain debate heating up in the auto industry as suppliers to Volvo Cars are voicing significant concerns about the company’s current favored bidder, China-based Zhejiang Geely Holding Group Co.

The suppliers –including Autoliv Inc., the world’s largest maker of automotive air bags, and IAC Group, the U.S. interiors supplier owned by Wilbur Ross –want assurances that Geely will protect their patents and not plagiarize products in China. (more…)