In the light of all the recent automotive news; least not WSJs report on Chrysler’s plans for bancrupsy or Roland Bergers gloomy outlook for automotive suppliers who are unable to compensate for cash shortages, little new money available from owners of capital markets, withdrawn credit coverage and have no customer support to count on what so ever – this press release from Schaeffler Group sheds light on what some suppliers are doing to negate the impact of the downturn.
The purchasing cooperation [between Shaeffler and Continental]… …is to optimize cost of materials and achieve an annual triple-digit million benefit through access to the steel markets and component suppliers as well as investments and non-manufacturing materials.
With a combined purchasing volume of €20 billion, Continetal and Shaeffler predict they will benefit about $6,6 billion in synergy effects resulting in a savings potential of €350-400 million over the next two years. Most of the synergy effects are expected to come from the complimentary purchasing focus that each company has.
While Schaeffler’s annual purchasing volume of as much as 1 million tons of steel brings it direct access to steel producers, a high level of competence in this segment and also very good purchasing conditions, Continental’s strength lies in the purchase of mechanical and electronic components. Both companies have a well established portfolio of suppliers. The joint access to the partner’s purchasing expertise makes it possible for both companies to benefit from the improved purchasing conditions.
And what is more, Continental’s suppliers will obtain far better access to global steel markets than they presently have separately. In return, the Schaeffler Group will benefit from Continental’s large supplier portfolio which will now also be available to that company.
In addition the two companies see a high potential in bringing home savings for non-manufacturing materials as well. Tough times bring out the best of us, and it’s going to be interesting to see where this co-operation will go in the future.
