Bosch warns production at risk as Nexperia dispute hits auto suppliers

In light of growing concerns in Europe’s troubled car industry, German auto parts supplier Bosch is considering firing employees from its Salzgitter plant if a trade dispute between China and the Netherlands over Dutch chipmaker Nexperia is not resolved soon.

After China banned exports of Nexperia’s finished goods in response to the Netherlands seizing control of the business whose Chinese owner Wingtech has been identified by the United States as a potential threat to national security, Bosch and other suppliers are scrambling for alternatives.

The standoff, in addition to US tariffs and Chinese restrictions on rare-earths exports, could result from Nexperia’s chips being widely used in automotive parts.

In an email to the Reuters news agency, a Bosch representative said, “We are currently doing everything we can serve our customers and reduce production restraints.”

She continued, “We are planning to make adjustments to our working hours, especially in Salzgitter,” adding that potential furlough measures were being put together at the plant.

Around 1,400 people work at Salzgitter, which is Bosch’s lead plant for motor control units for combustion and electric vehicles.

Volkswagen, which includes Porsche and the core VW brand, announced earlier on Friday that it had secured production in Germany for the upcoming work week.

Short-term effects on the Volkswagen Group’s production network are not generally ruled out, according to a spokesperson.

Worse situation

Mercedes and BMW both issued warnings about the networks of their suppliers.

A regional IG Metall union representative in Germany issued a Friday warning about a worsening situation.

At a conference in Munich, Horst Ott, IG Metall district manager in the southern state of Bavaria, stated that some automotive suppliers are already experiencing “severe difficulties” and have begun to announce employee furlough plans.

He didn’t use the company’s name.

In an effort to stop production stops, Bosch claimed to be looking for alternative suppliers and optimizing its global production network.

The majority of Nexperia chips are produced in China, with Europe and China being the main producers.

Industry sources claim that there are potential alternatives to switching suppliers, with Infineon, NXP, and Texas Instruments being the only ones that take longer due to the approval processes.

A political solution has been requested by auto industry organizations.