Auto Supplier Seeks Compensation Amid Production Slowdowns

The company’s CEO said it can’t be held responsible for automakers’ financial issues.

Since the beginning of the year, the global auto industry has been plagued by a lingering shortage of semiconductors that stems all the way to the beginning of the COVID-19 pandemic.

The crisis is impacting the entire supply chain, from the world’s most well-known car brands down to the lesser-known manufacturers that make their components.

One of the latter companies, evidently, is tired of being hung out to dry by its automaker customers — and wants to be paid accordingly.

Novares, a French company that makes plastic parts used in one in every three vehicles around the world, says some 2,000 orders have been cancelled on short notice this year, with at least 100 of those orders scrapped with less than 48 hours’ notice.

Pierre Boulet, the company’s CEO, told Reuters that the cancellations amounted to tens of millions of dollars. Although most major automakers have been forced to curtail production due to a shortage of chips, Boulet said his company should not be forced to bear the brunt of their issues.

He indicated that the company would pursue commercial talks, rather than legal action, to resolve the matter; it was unclear how automakers would be persuaded to reimburse the company.

Boulet noted that some customers had warned Novares of cancellations well in advance and paid for its excess costs, but others had simply walked away. “We are,” he lamented to Reuters, “in a macho and somewhat selfish world.”

Despite global efforts to ramp up chip production to meet demand, a surge in COVID-19 cases has once again staggered supply chains. Some speculate that the chip shortage could last as much as two more years before supplies return to normal.

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