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Auto Industry Suppliers are Unable to Recover Steel Surcharge Costs
Southfield, MI— Automotive industry suppliers are mostly unsuccessful in passing the cost of steel surcharges on to their customers, according to a recent steel surcharge survey conducted by Plante & Moran, PLLC and the Original Equipment Suppliers Association (OESA). Nearly half of all suppliers serving automotive OEMs are expecting “no recovery.”
The survey found that 40 percent of suppliers have pursued full reimbursement of the surcharges, yet only 20 percent of survey respondents have “firm” agreements for some form of recovery. 60 percent of suppliers attempted to negotiate recovery with their customers, while others used different approaches, including presenting the business case, paying or re-sourcing, negotiating scrap, and simply invoicing for the increased costs.
Other data from the survey includes: