Monday, June 02, 2008

Surging steel prices cost automakers $500 more per vehicle - Autoblog

Came across this interesting blog, and a posting about the impact of steel prices on the cost of a new car.

A few years ago, high(ish) gas prices and fierce competition had Detroit automakers talking about the "perfect storm" that the domestic industry was facing. Fast forward to 2008 and the entire auto industry, not just U.S. automakers, is in a full-blown tsunami. Gas is $4 per gallon, the U.S. is muddling its way through some seriously wobbly financial times, and now the price of steel has nearly doubled in five months to $1,035 per ton. Since just this January, the cost of steel in your automobile has risen $500 per car.

Well worth "popping" over to read the full article. The world is changing for us all for ever,  as scarcer resources have be shared between an ever increasing market of hungry consumers. For a long time the automotive manufacturers seemed to consider their suppliers as their "inflation hedge", the main route to controlling costs. In the past a "supply partnership" with an automotive company meant in reality that they gave the orders and the supplier conformed or "went under". Maybe now is the time for real partnerships. For a a great take on the current situation pop over to Supply Excellence and read the posting on The End of an Era in Detroit.

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