AUSTRIAN WIRE & CABLE MACHINERY MANUFACTURERS ASSOCIATION		VERBAND ÖSTERREICHISCHER DRAHT- UND KABEL- MASCHINEN- HERSTELLER
IWCEA-Member

Suppliers need adequate margins

An open letter from the
Austrian Wire & Cable Machinery Association (AWCMA)

Mechanical engineers in the wire and cable industry - and not just those who are in Europe's Alpine regions - are increasingly forced to cope with competitors that have been operating in the red for some time. These companies have already incurred enormous financial losses and yet continue to accept orders at any price, seemingly heedless of further deficits. They are led by company owners who seem to be willing to make up for these losses beyond all reason - indefinitely. Thus, the already low world market prices for wire and cable technology are undermined even further. Consequently, the companies that are still healthy and which correctly calculate prices cannot even obtain the minimum basic price for their products that would be necessary to ensure research and development, good service, and indeed, their very survival.

We would tike to raise our concerns about the issue of price and the conditions that suppliers are subject to when selling their products. From our point of view, prices have reached a level below what is sustainable. This is due to numerous suppliers becoming insolvent - many machine manufacturers for the wire and cable industry are accruing losses in addition to having borrowed heavily. Any serious research regarding the industry wiH reveal that the majority of machine suppliers are already in this precarious situation. All in all, this cannot be in the interest of the cable and wire industry. If this dilemma continues, the market will lose its machine suppliers and suffer from substantially poorer service. R&D budgets will decrease as will customer support. Information exchange will decline as participation in exhibitions is reduced or cancelled.

We believe that raising awareness for the global situation should be a pressing task, not only for national and international industry organisations, but also for trade journalists. When an individual manufacturer raises this issue, he is often dismissed as a complainer who only wants a bargaining ploy. All suppliers must therefore be united in raising the awareness of their customers. Customers must understand that the crisis is real and they must be reminded of the value that suppliers provide: consulting, project planning, service, further development of technologies, among others.

To be able to do so, however, suppliers must be able to make the margins that will allow them to run stipng and healthy businesses.