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17 AutoData | March 2018 “There are optimistic automakers, but the market has a certain limitation” Marcos Zavanella, Schaeffler “Who depended exclusively on the OEM suffered a lot” Gilberto Heinzelmann, Zen each company works. In Pernambuco, for example, everything is prepared, we manage from twelve months ahead. It must not have any lack of parts there. We work hard on the preventive issue”. The same concept was repeated in the unit of Betim, MG, and according to the executive “we have never had so little pieces problems as now”. He believes that any bottlenecks are currently under control and some additional difficulty may occur a little further in two to three years. “Working well with the suppliers, we will succeed. If there is a problem, it will be something related to a bad management.” ON THE OTHER HAND On the other hand, the suppliers do show some caution, but the vast majority guarantees that they can keep pace with the increase in demand, each one in its own way. But, similarly, they reveal their concerns about links downstream from Tier 3, which they see as weakened. Marcos Antonio Zavanella, president and CEO of Schaeffler South America, reveals that 2017 surprised positively by closing with a 15% increase in the produc- tion. By 2018, the company works with a one-digit increase in the productive index, which does not worry the executive: “Some automakers really expect to grow above average, but this should be offset by reduction in others. If we add all the projections of the most optimistic companies the calculations do not match, a cake is bigger than 100%. The market has a certain limitation to grow”. He tells that in this first two-month pe- riod the production already runs above this one digit, “which is good, it helps to use factory capacity, reducing total costs” - in some areas Schaeffler is working on two shifts and others on three shifts. Last year, he even hired two hundred em- ployees for production. He confirms that the bottom part of the chain “is fragile, with complicated financial health. There are signs that some compa- nies are failing to sustain themselves by delaying taxes and salaries”. For him “so- mehow they have to be helped, because the biggest concern today is how much the chain will be able to sustain growth.” The president reminds that several companies have to pay for rawmaterials and wages before receiving payment for their supplied parts, which complicates cash flow especially those that are not of multinational profile. “We have already supported some in a more complicated situation, anticipating payments and even paying for raw material purchases”. Gilberto Heinzelmann, president of Zen, argues that the company has good room for maneuver in its OEM operations, spare parts and export operations, which helps “hit the sails to sail with any wind”. Last year its production grew 15% and for this year the projection is even stronger, 25%. “It may seem like an extremely optimis- tic number, but the base is low”, he says. Zen closed the third round in 2016 and began its reactivation in the second half of last year, in part to attend new export contracts, particularly for Mexico. The executive explains that the com- Disclousure/Schaeffler Disclousure/Zen