MAN, the German truck manufacturer, has been forced to lay off around 11,000 staff after war in Ukraine led to a “massive” shortage of wiring harnesses supplied by factories across the country.
The group, which is owned by Volkswagen, revealed that factories in Munich and Krakow had been closed since March 14 and that production had been reduced at three other sites, including its engine plant in Nuremberg.
“Truck wiring harness suppliers cannot produce at their Ukrainian sites or can only produce to a very limited extent,” MAN said on Wednesday. “This threatens a loss of truck production for several weeks and a massive production cut in the second quarter.”
Workers will be placed into so-called short-time working schemes, which will see them compensated for 80% of the loss of income caused by canceled shifts thanks to a mixture of government support and MAN itself.
Closings of Ukrainian harness factories have already forced Volkswagen and BMW to cancel shifts or close factories for brief periods.
Most of Ukraine’s harness factories, located in the west of the country, have reopened as staff want to return to work, according to officials from several companies with facilities in the country.
Leoni, which has two sites in western Ukraine, said last week that both of its factories were working again.
“It is both impressive and moving to see how our employees are determined not to let the situation get the better of them but to defend their country and their way of life,” said Aldo Kamper, Managing Director of Leoni.
Leoni, which has sites in Europe and North Africa, has also started to duplicate equipment to maintain production flow. Other companies operating in Ukraine, including Aptiv and Kromberg & Schubert, have also restarted production, according to people in the industry.
A carmaker that buys parts from Ukraine said its supplier in the country is making more parts than before the invasion to make up for production shortfalls.
MAN’s predicament contrasts with that of its main competitor, Daimler Truck, which last week said it was not sourcing wiring harnesses from Ukraine.
MAN owner VW – which has several dozen people working at a football stadium in Wolfsburg as part of a task force dedicated to solving supply problems caused by the war – had also said that the constraints production of its passenger car brands were beginning to ease.
But the truckmaker said it hadn’t done well in securing supply.
“Immediately after the outbreak of the war, we began, among other things, to duplicate Ukrainian supplier structures for truck wiring harnesses in other countries,” said MAN Managing Director Alexander Vlaskamp. “However, it takes several months.”
He added that “as a sign of solidarity with the staff”, he and his executive board “would be giving up a considerable amount of salary over the next three months”.
The production hiatus comes just months after MAN, alongside nearly every other automaker, was forced to furlough workers due to continuing semiconductor shortages.
But while some vehicles can be built without certain chips, and even delivered to customers without full functionality, it’s usually impossible to start building a car or truck without wiring harnesses.
MAN said it offered customers the option to cancel orders.