Fiat 500 and Maserati production hit by dispute with supplier

http://www.autonews.com/article/20130514/COPY01/305149917#axzz2TbAtYhdj

Fiat and Maserati (both part of the same company) had to halt production due to a supplier not delivering plastic components that go into the cars. This poses serious problems for Fiat because that means production is at a standstill. In one of our meetings in Detroit I recall an employee saying if production stops in one place it stops everywhere, it also means that the suppliers could be losing up to $1,000 a minute, which if you translate to an actual car manufacture can be far greater since it will ultimately be the finished product.

The supplier claims that Fiat is making a fuss about this because they tried to buy the suppliers company earlier this year and Fiat’s European market had a loss of $908 million last year. This further goes to show that just like with the Tohoku earthquake companies need to diversify their holdings and not just rely on one supplier for certain items, otherwise Fiat could end up like Lexus and other car companies where supply is limited.

This is also especially big for Fiat in the U.S. because within the last few years the Fiat 500 has been making headway in the U.S. market. A production halt like this one could yield bad results for Fiat numbers in the U.S.

2 comments to Fiat 500 and Maserati production hit by dispute with supplier

  • cookg15

    Depending on the decisions made by Fiat as a result of this delay, quality could also suffer. I remember Mr. Whitlock talking about one time when a shipment of windshields was late to the Honda plant, and the plant had to decide whether to stop production and wait until the windshields arrived so the machines could install them or continue the line and put them on by hand at the end, with the installation being of a lesser quality than if it had been done by the machine. If Fiat favors production over quality, customers might take notice and make it even harder for the company to establish a good reputation in the U.S.

  • Another article mentioned that production restarted. This seems to be a contract dispute, not a production problem. But you are certainly correct that for the lack of one part the car is not made, and that this has financial ramifications not just for Fiat but for other suppliers.
    Now a supplier has to be really desperate or really, really peeved to deliberately halt shipments. In general such a supplier can’t expect to remain one come the next vehicle…

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