The Confederation of British Metalforming director-general John Houseman said as the rising cost of steel and energy are global issues, “The only sensible solution for all concerned is for our automotive sector and white-goods manufacturers to tell their buyers to accept price rises reflecting the increased costs facing the fastener makers, this will protect their security of supply and retain faithful suppliers.”
In an open letter to end-user manufacturers, John Houseman expressed that the fastener producers had to be allowed to recoup their increased costs. And it was absurd to expect hard-pressed component suppliers to absorb consistent double-digit rises in the cost of both raw materials and energy.
He said the fastener manufacturers have no bargaining power with the raw material suppliers. At the buoyant economic periods some fastener manufacturers had chosen to absorb part of the increased costs. However, with rising steel, gas and electricity costs this was no longer possible.
He added, “Equally, I understand the buyers’ perennial mindset that they should demand ‘cost downs’ and oppose price increases by component suppliers.” But “if the buyers try to source safety critical fasteners in the Far East, they will immediately encounter supply chain difficulties, lack of traceability and quality problems.”
"As the rising cost of steel and energy are global issues, the buyers soon will be forced into renegotiations with their new suppliers, whether they are in China, India, Vietnam or the Philippines,” he said. “The only sensible solution for all concerned is for our automotive sector and white-goods manufacturers to tell their buyers to accept price rises reflecting the increased costs facing the fastener makers, this will protect their security of supply and retain faithful suppliers.”
The CBM is the UK’s leading trade association for companies in the forging, pressing and sheet metalforming industries. It has around 200 members and represents the interests of 20,000 workers in the industry.
