Border delays could shut down Germany’s car plants

Truck drivers have experienced long delays after Germany on Sunday imposed stricter Covid-19 controls and immigration rules at its borders with Austria, the Czech Republic and Slovakia in an effort to prevent new variants of the virus from entering the country. This jeopardizes vital supply chains.

“If there are long traffic jams at the borders due to testing and registration requirements, the supply chain is likely to break down and production will stop at many staff cars in Germany shortly thereafter,” said Hildegard Müller, president of the German Automobile Industry Association. .

The border controls were introduced after the outbreak of coronavirus variants in the Czech Republic and Tyrol region in Austria which spread faster than other strains. Traffic jams developed rapidly, with lines waiting vehicles stretching up to 20 kilometers (12.4 miles) in one area south of Dresden.

Europe’s largest carmaker Volkswagen, (VLKAF) which owns the brands Audi, Skoda and Seat, said on Tuesday that there were “no serious bottlenecks” at its factories because trucks got stuck at the border. But it is said that provisions designed to compensate for deficits would only be in force ‘for a certain period’.

“If the border traffic situation worsens and results in even longer queues, it is no longer possible to exclude production restrictions at Volkswagen,” a spokesman told CNN Business. “We generally see it as the task of politicians to ensure free exchange of goods across national borders and to create clear regulations in exceptional circumstances like this.”

The company operates factories in the Czech Republic and Slovakia.

BMW (BMWYY) said the plants are being supplied according to plan. A spokesman said the company would monitor the situation in close cooperation with our suppliers and logistics partners. Daimler (DDAIF), the owner of Mercedes-Benz, did not immediately respond a request for comment.
Trucks are sitting in a traffic jam near the German-Czech border.

According to the European Automobile Manufacturers Association, the automotive industry plays an extraordinary role in Germany’s export-driven economy, employing more than 880,000 workers. German factories produced more than 4.6 million cars in 2019, representing more than a quarter of the EU total.

The threat of subdivision delays by suppliers in Eastern Europe is the latest in a series of logistical headaches for German carmakers, which temporarily closed some factories during the first months of the pandemic last year. More recently, they have been forced to contend with a worldwide shortage of computer chips used in their vehicles.

Volkswagen said last month that the shortage of computer chips would force it to adjust production this quarter in China, North America and Europe. Audi captured 10,000 workers.

Interruption in the supply chain

Severe marginal delays could also affect supply chains for other industries.

Joachim Lang, managing director of the Federation of Germany Industries (BDI), said in an interview with German publisher Funke Mediengruppe that there could be problems across the continent.

“There is a great danger that supply chains will break down across Europe over the next few days,” he warned.

A border policeman stands guard at the border with Austria while cars line up to enter Germany.

Some of its neighbors criticized Germany for imposing border controls. Slovak Foreign Minister Ivan Korčok said he had contacted his German counterpart to discuss the requirements for a negative coronavirus test for truck drivers.

“We are calling for a waiver of the requirement for freight drivers to take a negative test that is not older than 48 hours when they enter Germany. This measure will cause a major problem as it is difficult for our drivers in practice. to meet this requirement, and it is very likely that it will also cause a chain reaction from other countries, ‘Korčok said.

Steffen Seibert, a spokesman for the German government, said on Monday that the checks “were about temporary strong border control and not about a border closure.”

Peter Altmaier, the country’s Minister of Economy, held a summit with 40 representatives of German industry on Tuesday to discuss coronavirus measures. Altmaier said after the meeting that he was in talks with his Austrian and Czech counterparts about ways to reduce waiting time at the border.

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