He auto parts sector through the AFAC (Association of Argentine Component Factories) issued a harsh statement this Thursday, a few days after the inauguration of Javier Milei and warned about the commercial debt that affects companies and puts “the entire supply chain at risk.”
The commercial debt accumulation with suppliers of goods and services from abroad that has originated from the impossibility of making payments for imports, is causing a situation beyond criticism on auto parts activity,” the statement begins.
In turn, it details that 95 auto parts companies have a debt stock of US$585 million as of November 30. “This figure corresponds to the sum of 523 million dollars for commercial debt for goods and 62 million for debt for services. This debt has increased by 57% in relation to 12/31/2022, allowing us to infer that the total debt of the auto parts sector is close to the “US$1,000 million”.
Like companies in other sectors, they highlighted the blockade to make payments abroad, generating tension with suppliers for not complying with the authorized and postponed dates. “The accumulation of commercial debt has caused various line stopsgreat inefficiencies, cost overruns and great uncertainty”.
Not only is the productive interruption of several members of the value chain a fact, including suppliers of raw materials and basic inputs, but the current situation has led to a state of absolute precariousness of the entire activity. In effect, there is no capacity to react to the demand of the terminals to produce vehicles; there is insufficient supply for the replacement market and There are exporters who are under serious risk of losing customers obtained after years of building trust,” they warned.
Auto parts: the urgency and the possible solution
For AFAC, there is a sustainability risk and it is not known “when or how much external commitments will be met.” “This generates a financial and economic mismatch with the consequent risk of bankruptcywhich requires a comprehensive, coherent and realistic sectoral solution”. In this way, they asked for the urgent regularization of payments abroad.
The urgency of the situation generates serious implications for auto parts companies, mostly SMEs, and 50 thousand direct jobs.
For the above reasons, they requested:
-Establish a payment scheme that allows you to quickly recover the predictability and certainty in business relationships with suppliers of productive inputs from abroad.
-Define a quick channel to give solution to the most serious situations of plant and production line shutdowns.
We are facing a situation of emergency in which all productive, business and labor links must collaborate with the new authorities and act with great responsibility, diligence and overview.
Source: Ambito
