War in Ukraine Hampers German Automaking

German automakers rely heavily on Ukrainian factories for a crucial car part. The war has caused major disruptions in their business.
Written by Alex Reale
Reviewed by Kathleen Flear
Updated on May 04, 2022
The economic effects of war cut across swaths of industries, and
is no exception. Russia’s invasion of Ukraine, now entering its third month, has created cracks in the process of building cars for several automakers. 
Though some American firms’ production has been affected by the war in Ukraine, this appears to be largely a German affair. Major disruption in Ukraine demonstrates the outsize role that this country plays in
German automaking

The crucial wire harness

When Russian leader Vladimir Putin commissioned his army to attack Ukraine in February of 2022, it quickly became clear that the downstream effects of his aggression would be far-reaching. 
In western Ukraine, 38 automotive plants employ 60,000 Ukrainians, reports
. As bombing in that part of the country made working conditions untenable, German firms like Volkswagen Group, BMW, and Mercedes-Benz began to feel the sting.
Many of the plants in this part of Ukraine produce wire harnesses, which are as integral to a car as veins are to a human being. Wire harnesses package the cables of a car—which can be as long as three miles, says Reuters—in a bespoke fashion, so that each car produced has its energy pathways sewn up tightly. According to Reuters, in 2020 Ukraine’s inexpensive, highly skilled workforce churned out 7% of all wire harnesses that brace the EU’s cars.

German automaking disrupted

As the lives of Ukraine’s factory workers were thrown into chaos, German firms’ reliance on this workforce became apparent. 
According to
Automotive News
, Audi CEO Markus Duesmann acknowledged that Audi “had lost a substantial amount of wire harness production in Ukraine that was needed to keep assembly plants running.” He added that they were working on transferring some of this crucial work to countries like Romania, Hungary, Tunisia and Morocco. He expressed optimism that their process issues would see a return to normalcy in the latter half of 2022.
He also made a point to note that “substantial” did not mean “all” production. Despite the unimaginable stress and strife of the war, many Ukrainian wire harness makers are still finding ways to get to work, even if it means constant interruptions to take shelter from Russian bombs. It’s possible that a raise has never been more warranted.

A possible European slump

Heroic individual workers aside,
Automotive News Europe
does point out that the numbers still look grim for auto production in Europe. 
One analysis says that the kneecapping of Ukrainian wire harness factories could contribute to a 15% reduction of European automaking. German automakers in particular are scrambling for alternative routes to obtain these crucial car parts, but they are promising in concert to keep their Ukrainian partnerships alive and well.
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