Oct 5, 2021
Melrose hit by carmaker supply chain problems
More stories of supply chain disruption this morning. Melrose doesn't use chips itself, but its carmaker customers do - and if they have difficulty getting enough, that limits their demand for Melrose's products, which include drive systems and metal parts used in cars. The company said that while it's still unclear how long the shortage will last, the "Consensus view" is that supply chain constraints will last longer than previously expected. "In month cancellations" from customers have risen from a normal rate of around 1 per cent a month to between 20 and 25 per cent, Melrose said. The business is "Fully on track" to meet margin targets "Once supply constraints are resolved", it added - but the shortages are affecting current trading outside its aerospace division.
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