PA-12 resin shortage won’t impact auto industry: execs

Executives from some key auto parts companies said that they don’t expect widespread fallout from a shortage of a key ingredient in plastic resin following a German factory explosion.

According to international news reports, officials with Delphi Automotive, AK Steel, and Parker Hannifin are saying that a shortage of PA-12 shouldn’t disrupt their operations.

The shortage is caused by a March 31 explosion at Evonik Industries’ plant in the North Rhine-Westphalia region of Germany. The factory supplies at least a quarter of the world’s PA-12, and about 70 per cent of a chemical that’s used by other companies to make resin. Evonik expects the plant to be out of commission for at least three months.

The resin is used in hundreds of parts – most critically in fuel and brake lines because it can carry gasoline and other fluids without deteriorating.

Companies that make fuel lines, brake lines and connectors have been worried they will run out of PA-12 and they may have to stop shipments to automakers and larger parts suppliers. One key fuel line maker, TI Automotive, warned last week that the auto production interruptions are likely in the next few weeks. TI and a trade group of suppliers held an industry-wide meeting last week to look at the remaining supply of PA-12 and encourage faster testing of alternatives.

But Rodney O’Neal, CEO of part supplier Delphi, said he sees little impact on Delphi or auto production going forward. “I don’t see this as a crisis in terms of tremendous downtime at all for anyone around the world,” O’Neal is quoted as saying. He also said the auto industry is addressing the problem quickly and with flexibility.

At AK Steel, CEO James Wainscott said customers are telling the company that any shortage is likely to be a challenge mostly for European automakers in the U.S.

The West Chester, Ohio, company, he said, was concerned about the problem until the last day or so. “There may be some trickle-lower effect here, but we don’t look for that to be a great concern,” Wainscott is quoted in news reports as telling investors.

At Parker Hannifin, a maker of valves, filters, pumps and hoses, CEO Donald Washkewicz said his company isn’t in the fuel line business but does use PA-12, also known as nylon-12, in air brake tubing and other parts. The Cleveland-based company has been using alternate materials. Washkewicz did warn, however, that the shortage could drive up the cost of raw materials used to make plastic parts.

PA-12 is a unique material: The chemical doesn’t absorb as much moisture as other plastics and will stand up to carrying gasoline, brake fluid and other hydrocarbon liquids.

Nevertheless, automakers and suppliers are reportedly already close to agreeing on a fast-track process for testing replacements. The Automotive Industry Action Group, a nonprofit trade group, said that General Motors Co., Ford Motor Co., Chrysler Group, Honda Motor Co., Hyundai-Kia, Volkswagen AG and their suppliers, are expected to finalize new testing standards next week. The agreement would reduce the interim approval process for new materials to three weeks from the current eight weeks or longer.