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Jonas Fröberg: The engine will stop

The krisbesked was in the air for the whole week, the car manufacturer, Volvo Cars, with the korttidspermitterar over 25,000 employees and is closing its three

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Jonas Fröberg: The engine will stop

The krisbesked was in the air for the whole week, the car manufacturer, Volvo Cars, with the korttidspermitterar over 25,000 employees and is closing its three plants in Sweden, in Gothenburg, Skövde and Olofström. Truck manufacturer AB Volvo lays off 20,000 people, and also Scania is forced to shut down their factories, where 9,000 workers are involved.

This is a disaster already in the area. However, just below, the situation is far worse where a dwell period of post-war, the most serious industrikris.

Let me be clear: We are witnessing right now is something truly unique: a global, industrial solutions, which very quickly falls apart like a house of cards right in front of our feet.

and France is heavily dependent on the automotive sector. The large, well-known companies that Volvobolagen and Scania-has a total of close to 70.000 people in Sweden. To add to the suppliers ' 93.000 new jobs. Its 160.000 jobs can then be multiplied by 3, as all of the kringjobb.

in the financial crisis of 2008 and 2009, but now everything is much faster. And with the monumental uncertainties ahead, the situation will be almost hopeless.

the ceos of these companies are designed to to imitate the sailors, who must walk over the deck of the boat in full storm in the open sea, but to have something to look at.

the Reason is that all the turns are to the coronakrisen had the entire world's supply chains to break down, and then the demand, with disastrous timing.

the first beating (of the many) suppliers in China. Car factories in Europe, which was to create a buffer of the component, in order to cope with the start of the chinese new year, when Chinese factories traditionally in the us), which expires at the end of January and beginning of February.

if the buffer has come to an end.

Add to bilbolagen are increasingly moving towards having only one supplier for each component, in the past the choice was to have two providers just in case of any boat, or the tractor will get stuck on the way, and let this comes at a price. Now snålandet to the back of the hard.

to get started, after the completion of their coronakris. But, then, there will be a time lag of 8 to 10 weeks, but it simply takes a long time to ship the component on the boat. To get the cargo in this case it is about as easy as it is to get a taxi, right after the nyårsslaget on new year's eve.

in Europe, the automotive industry must, therefore, wait for some of the components in the two months of the year.

That is, in order to speak Swedish, work.

at the same time, has, as is well known coronasmittan moved on to Europe and the united states, where the supply chain is a total fail. The countries of Italy, Spain and France are in effect closed. Find bromstillverkaren Brembo, in italy's Lombardy region of northern Italy. The company supplies brakes for many car makers, including Volvo's factories in Sweden, the Brembo's factory closed this week. None of the included components are sourced from China and Italy, is the nedstängt. Even the big giants such as Bosch and Continental have closed.

Add to that the great bilbolagen are increasingly moving towards having only one supplier for each component, in the past the choice was to have two providers just in case of any boat, or the tractor will get stuck on the way, and let this comes at a price.

Now snålandet to the back of the hard.

in a couple of weeks. They are the big ones, like the Volvobolagen or TRUCK, although this is vulnerable to interruption because they are totally dependent on their cash flow, in order to be able to pay for the running costs. However, they do have large cash reserves, which are now deflating rapidly.

you Will then have to get up and running in the heat of the supply chain up and running as quickly as two or three weeks, and the weeks, as you would hope?

There are a lot of great questions.

During the financial crisis in 2008 and 2009 acted as a global leverantörsjättar such as Bosch, such as banks, and allowing delayed payments to the small providers - simply by the fact that the system would collapse otherwise. Also, the big bilbolag acted as such. We don't see that happening now. It is illabådande.

in the Volvo and Scania factories on a just-in-time production, some of which are minutpassning of the components.

It also makes the system more sensitive.

the bad news is That they are small vendors, whose minimal funds are now deflating rapidly, will be out in a few weeks time, if no action is taken. They don't have any customers, when the bilbolagens plants in the us. Perhaps we will see the first bankruptcies of the small companies, already shortly after the turn of the month, when taxes are to be paid. And when these companies are unable to deliver to a Volvo or a Scania, so... well, you know.

During the financial crisis in 2008 and 2009 acted as a global leverantörsjättar such as Bosch, such as banks, and allowing delayed payments to the small providers - simply by the fact that the system would collapse otherwise. Also, the big bilbolag acted as such.

I don't see this happening now. It is illabådande.

So, we have the last problem: in the most monumental of the uncertainty ahead.

as For what's going on? The answer is sending ice-cold breath at the back of the neck, on the world market.

It does not seem likely that the production in Italy and will be up and running in the near future, with the escalation of the death of a coronavirus. And on the right, then what will happen?

There are now a lot of the challenging weeks ahead for all of us.

the Demand goes down to zero, which is at least as big a problem as supply chains.

the Automotive industry is so important in the economy, the government is hardly able to look the other way.

At an even higher level, an even more difficult conflict in which the policy makers have to put your foot down. To be shut down in Europe in the fight against the coronavirus, in order to save the lives of the elderly and the sick are are in the to a close down of the economy, that is, for each and every day, more and more of the non-transparent consequences.
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