Canadian bumper manufacturer Plasman is closing its Ghent factory, costing more than 300 jobs. The announcement follows an earlier decision by axle-parts supplier Benteler to shut its nearby site next spring. The local supply network that once sustained Volvo’s assembly line is now effectively gone. But how come?
Remaining production evaporated
Plasman throwing in the towel comes after a period of decline. The factory was founded in 1987 by Norwegian firm Raufoss and acquired by Canadian group Plasman in 2016.
The supplier had already lost a significant share of future Volvo bumper contracts beginning this year. A strike followed, which briefly halted Volvo’s assembly line over a parts shortage. On top of that, the remaining production for BMW and Mini in Germany also evaporated. Management was left with no other choice than to wind down the activities completely.
Similar story at Benteler
Benteler’s story is almost identical. The Austrian metal processor, which made front and rear axle components, saw Volvo decline to renew its contract. From more than 200 workers a decade ago, the Gent site had already shrunk to roughly 50 before the final closure was announced.
Both closures follow a straightforward commercial logic that is common in the European automotive industry today: contracts are not renewed, and no replacement volume is secured.
Suppliers hit harder than OEMs
According to the supplier association CLEPA, 18,900 jobs were lost in the European automotive supplier sector during the first semester of the year. The sector is hit harder than automotive manufacturers, though the trend is slowing slightly compared with previous years.
However, the disappearance of suppliers around Volvo Car Gent is not simply a case of two firms losing tenders. It reflects structural pressures.
First, the electric transition is rewriting the parts list. Battery-electric vehicles need roughly 40% fewer components than internal-combustion equivalents. Bumpers and axles remain, but many of the peripheral parts are simply no longer required. As Volvo changes the component mix, suppliers follow suit.
Small and mid-sized come first
The firms disappearing first are the small and mid-sized suppliers that lack the scale to pivot to battery systems, software, or EV-dedicated components, and that cannot match the labor costs of Eastern Europe or North Africa.
Cost pressure from manufacturers is forcing suppliers to relocate or die. Union representatives at Plasman noted that when new models are launched, contracts are repeatedly renegotiated and orders frequently migrate to lower-wage countries. When the automotive OEMs squeeze, the weakest suppliers in the highest-cost regions fold first.
Finally, production in Ghent is decreasing. Roughly ten years ago, the plant was churning out more than 260,000 cars, but last year it made a little over 210,000 units: a downward correction of almost 20%.
Good prospects
The local supply chain for VolvoCar Gent is under heavy pressure, but it has not been entirely extinguished. Adient in Assenede, which makes seat fabrics for Volvo, employs 600 people. MCSyncro in Desteldonk is a 70-person operation fitting tires to rims. Both are described as having good prospects. But the uncertainty stemming from Volvo’s overcapacity in Europe puts that statement in a different perspective.
Volvo Car Ghent itself remains Belgium’s largest industrial employer, with roughly 6,300 staff.
