A fire has completely destroyed automotive supplier Autoliv AB’s (Stockholm / Sweden; www.autoliv.com) steering wheel production plant in El Nadhour / Tunisia. The fire, caused by welding works, broke out during the Christmas holidays, decimating crucial production capacity for the European market. CEO Jan Carlson expressed relief that nobody was hurt in the blaze, which consumed all production machinery. Most moulds could be saved and meanwhile have been brought to Poitiers / France, Autoliv’s largest European production site. It is from this base that the company now is trying to maintain its just-in-time delivery flow of parts. Autoliv has brought 30 employees working in Tunisia over to France, commissioned previously idled machinery and introduced additional shifts to balance the surplus load, Carlson said.

Autoliv’s plant in Tunisia had produced PUR-covered steering wheels for more than 25 different car models of leading European manufacturers. The plant’s volume had amounted to 12% of total steering wheel production in Europe. The company currently is discussing plans to rebuild the El Nadhour plant, which is scheduled to resume operations this summer.

The loss comes at a time when Autoliv is mulling closing four production sites due to overcapacity and restructuring, according to leading producers of passenger protection systems. One of the affected sites is the logistics and assembly centre in Markelkofen / Germany, which is being partially relocated to Dachau. In addition, a Tunisian plant for safety belt manufacture will be relocated to Turkey and one of several steering wheel plants in Mexico will shut its doors for good.

Autoliv recorded sales of around EUR 6.5 bn in 2008, 54% of which were generated by European and another 24% by North American suppliers. Although at the beginning of 2009 the company, which employs some 37,000 workers worldwide, expected yearly sales to decline by more than 20% to roughly EUR 5 bn, sales volumes picked up by about 20% year-on-year in Q4 2009, Carlson explained. However, restructuring costs in 2009 turned out to be higher than expected. At the beginning of last year the company still spoke of about EUR 100m. Today EUR 120-140m seem more realistic.