Steel crisis is worsening

Opel helps out its suppliers with scrap metal -- DaimlerChrysler pays surcharges

Duesseldorf. Steel industry associations are stepping up the pressure on the auto industry.

"The situation will continue to get worse during the coming weeks," said Andreas Moehlenkamp, managing director of Germany's Steel and Metal Processing (WSM) Trade Association.

Because steel is becoming scarce and therefore more expensive in Europe, many suppliers don't have sufficient supplies anymore.

Moehlenkamp called on the auto industry to provide financial support to suppliers, "otherwise their production will soon come to a standstill."

"No one benefits when a supplier has no reserves and is forced into insolvency," said Siegfried Goll, CEO at ZF Friedrichshafen.

The German Auto Industry Association (VDA) is currently discussing the introduction of surcharges with two steel associations. The surcharges, which would cover the additional costs incurred because of raw-materials price rises, should be paid by original equipment manufacturers (OEMs).

Moehlenkamp said the rise in steel prices would result in a price increase of approximately 150 euros per car.

"The level of willingness of the OEMs to discuss steel surcharges with their suppliers varies," Goll said. Some carmakers fall back on long-term contracts, others are prepared to support their suppliers.

"If necessary we will help our suppliers to find new supply through our contacts within the steel industry," an Audi spokesman said.

Opel provides some support by selling back at lower prices scrap metal that accumulates during metal processing, suppliers told Automobilwoche.

Euroforge, the European metal-processing-industry association, said VW and DaimlerChrysler will pay a scrap metal surcharge of 80 euros per ton starting in the third quarter.

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