China Virus Outbreak To Force Production Halt At Spanish Plant Owned By Denso, Fujitsu

One of the latest casualties of among large companies that have been hit by the coronaviurs outbreak in China as well as its fast spread in other parts of the world is the Spanish company Denso Corp and Fujitsu Ltd. The company said that it is now preparing to suspend production at one of its plants – where the company manufactures auto electronics components. The company said that this was because of a potential shortage of supply of parts from China as factories have been closed down in the country because of the virus outbreak.

According to a report published in the news agency Reuters, the first production line of the factory in Malaga that the company anticipates will have to be shut down temporarily – manufactures assembled car audio components.  Factory managing director Blanca Hermana told Reuters that the first production line starting March 16.

“We’re working so we don’t have to stop, and that’s what we’re hoping for. But we have taken the preventive measures to deal with this situation as the components are arriving with great difficulty,” Hermana said.

The Japanese auto parts supplier Denso is the majority stake holder of the factory while a holding stake is also owned by the information technology firm Fujitsu.

Reuters reported, quoting a report published in Diario Sur, the main Malaga daily, that a total of 38 employees will currently be affected by the stoppage of the audio line. However if the suspension is extended to other production lines as well – that mostly makes auto electronics, the total number of employees to be impacted by the temporary shutdown will be 336 employees out of a total of 449 staff members currently employed at the Malaga factory.

The contingency supplies as well as shipments that were already on the way to Spain were being used till now to continue with production in the factory, Hermana said. But that was before the outbreak of the coronavirus in China which resulted in ban and restrictions on movement of people and traffic as well as temporary closure of almost all factories in the affected areas of the country. The epicenter of the outbreak is Hubei province which is a huge manufacturing hub in China.

Currently, even though some factories of suppliers of the factory have started production after the relaxation of restrictions by the Chinese authorities, it typically takes between three and five weeks for parts to be delivered to the factory from China.

There were other suppliers of auto parts that were in a far worse condition than the factory at Malaga making car audio components, Hermana said but did not give any further details of which companies she was talking about. She further said that that plight of the other car parts making factories is more likely to cause the first stoppage in the car production lines in Spain, she said. Spain is the hub for manufacturing of most car brands.

“Most of the parts needed to make cars in Spain are produced in China,” she said.

(Adapted from Reuters.com)



Categories: Regulations & Legal, Strategy, Sustainability, Uncategorized

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