The coronavirus pandemic may change many things about the way supplier Valeo operates, but its sprawling global supply chains will not be among them.
European leaders have talked of bringing manufacturing back to member countries to avoid the type of crises that quickly followed the initial outbreak in China. The shutdown of auto parts factories there sent Europe's vehicle producers scrambling for replacements to feed assembly lines. Europe's dependence on foreign-made health-care protective gear such as masks and gowns also became painfully clear.
Yet for corporate leaders such as Valeo CEO Jacques Aschenbroich, shortening logistics routes is not part of his plan to extricate the maker of 8 million components a day from the deep industry slump that has pushed European car sales to record lows.
"Our final customers and auto parts clients aren't ready to pay more if our supply chains were relocated," Aschenbroich said Sunday at the Aix-en-Seine economics conference in Paris. "So, if neither of them put a value on the risk, there is no chance that supply chains will be relocated."
Rather than put them under scrutiny, "we should pay homage to these supply chains that have shown extraordinary resilience after withstanding successive shocks like Fukushima, flooding in Thailand and now COVID-19," Aschenbroich said.
In the wake of the global pandemic, which is causing the steepest recession in almost a century, the European Union has proposed a 750 billion-euro ($843 billion) recovery package that could aim to ensure "strategic autonomy" in key sectors and stronger value chains within the EU.
European Central Bank Executive Board Member Luis de Guindos and Dutch central bank Governor Klaas Knot have independently argued that companies should consider moving parts of their supply chains closer to home even if that meant higher costs.