The Covid-19 pandemic has laid bare the problems arising from Western economies’ dependence on suppliers from distant regions. And the strategic evaluation of raw materials has awakened the community or North American authorities to the need to improve production processes. What they did not expect at this time in neighboring Portugal was that, as had happened before with semiconductors (or chips), imports of components from Slovenia would take control not only of the automotive industry, but also of the economy as a whole. The very strong floods recorded in this country last August (Prime Minister Robert Golob described them as the “worst natural disaster” in its history) completely affected the operations of one supplier. Autoeuropa, where the Group is located Volkswagen assembles vehicles in Palmela. The facility, which produced 231,100 units last year, will be paralyzed until November 12. It has no alternative and has been forced to continue redundancies with contract suspensions leading to more than 500 redundancies, according to unions.
“You will have to take a break from work for two months”. “The two-month job interruption in Autoeuropa will have a huge weight on the growth of our GDP and exports,” Portuguese Prime Minister António Costa lamented in the last hours. The activity of this factory accounts for about 1.5% of Portugal’s gross domestic product , representing approximately 4.5% of export volume. “I believe that there is no car on the roads in Europe today that does not have at least one part produced in Portugal. “A flood in these factories in Portugal could have paralyzed factories in other countries,” the Portuguese leader said.
The reality is that the paralysis of Autoeuropa will have a domino effect on the industry, with collateral damage to the Galician automotive sector, both in Portugal (56% of its components are purchased locally) and in Spain. José Couto, president of the Automotive Industry Manufacturers Association (AFIA), has already predicted that other factories will have to stop their production due to their strong dependence on this plant. The Prime Minister himself called on the industry to work together to further reduce dependence on external suppliers, so that Portuguese manufacturers can respond to greater needs in the future.