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Meridian Magnesium fire spotlights supply disruption vulnerability

When a third of the U.S. tool and die shops closed and hundreds of stamping manufacturers went under during the economic downturns in 2001 and then again in 2008, the automotive industry worried about supply chain disruptions. It’s hard to imagine an industry segment with a supply chain more well-defined--or one more reliant on its being reliable than automotive.

Overall, the supply chain system has held together fairly well, especially as customers who were sourcing dies and parts overseas reverted to sourcing from U.S. suppliers. But when Takata air bags were recalled in record numbers, stalling assembly lines, the world glimpsed a view of the effects of supply chain disruption.

Last week’s catastrophic fire at the auto parts supplier of magnesium die-cast components Meridian Magnesium plant in Eaton Rapids, Mich., lifted the veil once again on how truly vulnerable and fragile the chain is. The plant manufactures dashboards and other subassemblies for Ford, GM, Fiat Chrysler, BMW, and Daimler.

Magnesium is lightweight, and the manufacturer casts parts from it at the plant as part of its lightweighting offerings, but it is also highly flammable. Further exacerbating the flammability aspect, a magnesium fire cannot be doused by water.

At least three automakers have halted or adjusted production of some vehicles as a result of the fire and subsequently halted part production.The Ford Dearborn Truck Plant and the Ford Kansas City Assembly Plant in Missouri shut down their F-150 assembly lines this week and last week because of the parts shortage, according to the Detroit Free Press. About 7,600 Ford workers were idled. In addition, the Fiat Chrysler Windsor Assembly Plant in Windsor, Ont., Canada, which assembles the Pacifica and Pacifica Hybrid, has had to shut down its lines. GM has temporarily halted production of its full-size vans at its Wentzville, Mo., plant, the only facility that builds the Savana and Chevrolet Express vans.

Disruptions Cost Money

Anyone associated with the automotive industry knows that in an assembly line environment, time truly equals money and every second counts. Each plant calculates its assembly line rate, and that rate varies, but the rates are all high. A disruption like this can be devastating. The shutdowns could cost Ford as much as 15,000 trucks per week, according to James Albertine, an analyst with Consumer Edge Research, as reported by Detroit News.

Morgan Stanley recently estimated the value of the F-Series pickups franchise as greater than that of Ford as a whole, bringing in about $40 billion in annual revenue, according to Detroit News.

Have a Stash of Dashboards?

The automakers are aggressively seeking alternative sources for replacements for the dashboard assemblies. Any stampers out there happen to have the capacity to replace those parts with cleverly redesigned stampings? If so, don’t hesitate to call Ford, GM, and Fiat Chrysler. I’m pretty sure they’ll take your call.

Got thoughts? I’d love to hear from you. kateb@thefabricator.com

About the Author

Kate Bachman

Contributing editor

815-381-1302

Kate Bachman is a contributing editor for The FABRICATOR editor. Bachman has more than 20 years of experience as a writer and editor in the manufacturing and other industries.