Luxury carmaker Mercedes Benz has been forced to scale back working hours for some of its employees, as supply chain disruptions stemming from the Russia-Ukraine conflict impede the company’s production.
According to Reuters, Mercedes cut back hours for some of its staff at the company’s Sindelfingen plant in Germany, amid a shortage of production parts. The conflict in eastern Europe has forced the automaker to divert certain parts manufacturing from Ukraine to other locations, as supply chain disruptions from the country worsen.
The Sindelfingen plant employs over 25,000 workers, and produces popular Mercedes models, including the S-Class and E-Class. Mercedes halted local production of its vehicles in Russia, as well as exports of cars and vans into the country in wake of Moscow’s military operation in Ukraine.
The Ukraine crisis has added further strain on global carmakers, who have been contending with semiconductor shortages and surging input costs stemming from the Covid-19 pandemic. In fact, S&P Global Mobility forecasts the Russia-Ukraine conflict could result in 4 million less cars manufactured over the next two years, as a shortage of Ukrainian neon gas— a key component in chip production, as well as lack of wiring harnesses assembled in Ukraine heighten supply constraints for the auto industry.
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.