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BMW slows U.S. production due to transmission supply

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BMW slows U.S. production due to transmission supply

April 20, 2010 06:01 CET

DETROIT (Reuters) -- BMW has slowed production at its U.S. plant in South Carolina because flight restrictions in Europe -- due to ash from the volcanic eruption in Iceland -- have hampered deliveries of transmissions, a company spokesman said on Monday.

The plant in Spartanburg is the sole producer of BMW's X5 and X6 crossovers worldwide, building about 600 a day. About 70 percent of the vehicles are exported from the United States.

Due to recent strong demand, lead times in Europe on transmissions have shortened and BMW over the last few weeks has had them flown to the United States instead of shipped by boat to keep up schedules, said Bobby Hitt, spokesman for BMW Manufacturing Co. in Spartanburg.

On Monday, BMW told workers it would slow production while maintaining its normal shift schedule and take "extraordinary measures" to ship transmissions to southern Europe for flights to the United States to maintain production, Hitt said.

Hitt did not say how much daily production would be trimmed or how long that could last before further cuts were needed. BMW normally runs two 10-hour shifts at the plant from Monday through Thursday and one shift on Friday.

In terms of value, about 65 percent of the parts assembled at the Spartanburg plant are sourced from North America, with the other 35 percent of the value coming mainly from engines and transmissions shipped from Europe by boat, Hitt said.

BMW uses air freight as a backup occasionally to maintain production.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100420/ANE/304199892/1193#ixzz0leWeMKLd

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And the effect on the real economy is becoming apparent. I always find situations like this sort of fun because it makes people realize just how complex the global economy is.

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