Non-compliant supplier causing production crisis in the Automotive Industry

What can happen if one does not comply with the requirements of environmental authorities is the latest example from the automotive industry in China.


Recently, a letter asking for help with the signature of the Schaeffler Greater China CEO Mr. Yilin Zhang has widely spread on the Chinese internet. The letter claims that the supplier of Schaeffler Greater China, Shanghai Jielong Metal Wire-drawing Co. Ltd., which supplies it with raw materials of needle, was punished by Chinese Ministry of Environmental Protection by cutting off water and electricity supply because of violating Chinese Environment-protection law.


Mr. Zhang wrote in the letter that this supplier was the only supplier of this material, and the sudden off-supply will cause unadaptable production crisis to Schaeffler Greater China, and the off-production of Schaeffler would effect the production of their downstream vehicle-manufacturing companies, leading to about 300 billion CNY economic loss. Mr. Zhang asks the Chinese Ministry of Environment Protection to delay the punishment for about 3 months, to give them time to find a new supplier.The Chinese Ministry of Environment Protection responded that Chinese government is serious about rectifying factories polluting the environment and no special cases are allowed.


Later Schaeffler Greater China announced that they have started international emergency plan to find a new supplier.