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Foundry Daily News

23. August 2009

Steel shortage looms as automakers boost production in US

Autoline Daily has learned that the American auto industry faces a steel shortage that could hurt automakers just as they plan to boost production.

When automakers began cutting production late last year steel demand plummeted and many steel mills slowly closed down, and now there's a shortage. It can take an integrated steel mill several months just to fire up its furnaces.

One buyer said that "There just isn't any steel out there. I'm sure we'll hear more about this story in the weeks to come."

Reuters reports that Toyota will close down the NUMMI plant in California next March. Citing reports in the Japanese newspaper Asahi Shimbun, Toyota will move production of the Tacoma pickup to its Tundra plant in San Antonio, Texas, which has been crippled by the sales collapse of full size pickups. Toyota will move production of the Corolla to its plant in Ontario, Canada. You know, the media in Japan are different from over here. If the Asahi Shimbun suggests Toyota is going to do something, it's not rumor or speculation. You can take it to the bank.

According to Reuters, Volkswagen threatened to stop doing business with Magna, one of its parts suppliers, if the Canadian company becomes a part owner of Opel. Suppliers always get to see the future plans of automakers, and VW is afraid Magna might slip its future plans to Opel. This did not sit well with the head of the Opel's union which called the threat blackmail.

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