If the global recovery continues to push up the cost of raw materials, the auto industry's traditional annual contracts with steelmakers may be history.
BMW AG says it is moving to six-month contracts to buy steel for its Spartanburg, S.C., assembly plant, which produces the X3, X5 and X6 models for sale around the world.
Six-month contracts give "us some stability, and we don't have to spend all our time negotiating prices," says Martin Schuebel, BMW's North American vice president of procurement.
In a recent interview, Schueble discussed raw materials, the challenge of rising production and other issues with Production Line's David Sedgwick. Here is a condensed transcript of their conversation.