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Comment: a steadfast industry - ready for anything

The repercussions from the events of September 11 had an immediate effect on the automotive industry and the aftershocks are likely to continue as component and vehicle supply are disrupted.

Plants in the US closed briefly as supplies of parts dried up when the Canadian and Mexican borders were sealed in the aftermath of the terrorist attacks. Within days Ford issued a profit warning; senior automotive executives were unable to make planned flights across the Atlantic; carmaker stock prices plunged (along with most others); and UK dealers reported an immediate (though temporary) virtual halt in showroom traffic.

But automotive is a resolute industry and global affection for cars is strong. Things were soon moving again.

Alan Pulham, National Franchised Dealers Association director, said: “Showrooms shut up shop on the afternoon of September 11 but new car buyers were back by the end of the week. Used car customers were more reluctant – it may be the fear factor was higher in that sector.”

Two weeks on, the world was in recovery mode though analysts were predicting the attacks would tip the US into recession (it had already been seen as a strong likelihood).

Further disruption may well be on the way because the smooth flow of components and assembled vehicles is so finely balanced.

Pressure on prices over the past two decades has made just-in-time deliveries essential to reduce the cost of stocking to a minimum. The whole complex network is a masterpiece of planning but susceptible to disruption. It would be a mistake to be alarmist, and there is little the industry can do to prepare for events which might not happen. But all multi-nationals will be making contingency plans.

Privately, motor industry executives are expressing confidence in the system holding up. And it is unrealistic to consider returning to stockpiling parts.

One executive said: “A major earthquake in Japan two years ago shut car plants but they were open within 48 hours. People in the automotive industry are remarkably adaptable.”

DaimlerChrysler and Volkswagen led the way with donations to support victims' families. The attacks were on the first (and major) press day at Frankfurt motor show. The previous evening, senior executives of Ford Motor Company chatted to journalists at the Bluoval Club.

The club (a converted warehouse) was part of Ford's marketing programme to encourage a new perception in the manufacturer's 'blue oval' logo. Ford of Europe president David Thursfield was relaxed, holding a glass of wine and a large cigar as he posed for a picture in front of the new Fiesta after its unveiling.

Later, there was music from Jools Holland and his band: Ford was mixing business and pleasure with its usual aplomb.

The following day, the world seemed to change, and 24 hours later, the music stopped on the second Frankfurt press day.

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