ArvinMeritor Light Vehicle Systems President Phil Martens says the company’s Tier 2 suppliers in Western Europe are facing more financial trouble than their counterparts in the United States. “Where we have most of our concern is not in the United States or Asia-Pacific or Brazil. It’s in Western Europe, primarily in Germany and France,” he told Crain’s Detroit Business in an interview here at the Management Briefing Seminars. “We have seen more challenged Tier 2 suppliers there than anywhere else right now.”
Tier 2 suppliers in North America are contending with rapidly shrinking vehicle production rates, falling sales and increasing raw material costs. The supply base in Western Europe faces many of the same woes. But troubled ArvinMeritor suppliers in Western Europe are facing bankruptcy to a greater degree. Martens contrasted that with North American suppliers who, grappling with rising material costs, end up in contract disputes with customers.