It has been reported that production delays are, in part, due to a shortage of wiring harnesses produced in the Ukraine. Here’s the rest of the story.
After Many Western Companies Fled Ukraine, a Holdout Adapts to Wartime
From renting a bomb shelter to tailoring shifts around curfew times, auto supplier Leoni had to learn how to keep its production line running
When the sirens go off, factory workers at German auto supplier Leoni AG’s plants in western Ukraine grab their coats and dash for buses waiting to take them to Soviet-era bomb shelters.
Then, when the all-clear is called, they shuffle back out, board the buses again and return to work
After Russia invaded on Feb. 24, many Western companies in Ukraine packed up and tried to transfer production elsewhere. The sudden stoppages raised concerns among local officials and the Ukrainian employees that some of the factories would close for good, Western executives said.
Leoni came close to leaving too. Within hours of the invasion, the company shut its plants and offered to move its female employees—who make up two-thirds of its workforce—and their children out of Ukraine. It planned to shift production to Romania and other sites outside the country, uncertain when production would resume in Ukraine, company officials said.
Then something unexpected happened: Leoni’s workers refused to stay home. Showing up at the plant ahead of one’s shift became an act of defiance, part of a nationwide patriotic effort to repel the Russian invader, Leoni officials said.
“I kept looking at my phone and thought it’s OK because Kyiv is still standing,” said one senior manager at the plant. “With this understanding that our soldiers could stop [the Russian assault], the people became more brave. They called their supervisors to see how we can continue” to work.
Leoni’s decision helped protect the livelihoods of its Ukraine staff. It also affected Europe’s biggest car makers. Leoni’s factories in the country make wire harnesses—simple but vital contraptions that help organize electrical and data wires in a car.
Some 70% of Leoni’s harnesses produced in Ukraine go to the German car giant Volkswagen AG, whose brands include Audi, Porsche, Lamborghini and the truck maker MAN. So when production stopped, VW had to shut down some of its biggest plants in Germany.
As the fighting unfolded, Leoni executives held daily videoconferences with their colleagues in Ukraine. Ingo Spengler, Leoni’s chief operating officer, said the company enacted a plan hatched weeks earlier.
After sending workers home, the executives set out to duplicate the harness production lines in other countries. As well as Romania, Leoni has plants in Serbia, Slovakia and North Africa where wages and other costs are low. The plan was put together in the weeks before the war by Leoni and VW, which said it is assisting in the effort financially and logistically, and in some cases providing factory space outside of Ukraine.
At home with their families, Ukrainian workers stayed glued to the news, a senior executive of Leoni’s Ukraine subsidiary said. By the third day of fighting, she said, the workers realized that Ukrainian forces in the east were holding the line against invading Russian troops. That is when the workers and middle managers began calling their supervisors asking to return to work.
Mr. Spengler said he received an open letter signed by many of the company’s employees in Ukraine urging him to reopen the plant. The workers, he said, feared that once their German employers had left, they would never return.
Initially, Leoni thought the security situation was too precarious to restart production. In the first days of the war, Russia had launched a barrage of missiles at targets across the country.
Mr. Spengler said it takes 16 minutes for a Russian missile to reach the area. “We had to find a way to get the people to a shelter faster than that.”
Some local managers recalled that older companies often had their own nuclear fallout shelters, the senior executive at Leoni’s Ukraine subsidiary said. They then inquired about renting one, she said.
Some shelters could be reopened right away. In at least one, water had to be pumped out and industrial dehumidifiers were brought in to dry out the bunker. Despite being decrepit and freezing, the bunkers were close enough to get the people out of the factory, into waiting buses, and to safety within 14 minutes, Mr. Spengler said.
Finally, on March 2, with much of the fighting concentrated in the east of Ukraine and around Kyiv, Leoni’s management restarted production with a single shift.
Keeping production lines going in a country at war required adjustments. Instead of leaving their personal belongings in a locker room, workers keep them at their workspace so they can quickly evacuate, Mr. Spengler said. Leoni had to limit the number of people working at any one time to how many could fit in the nearby air-raid shelters.
When the sirens blare, the workers grab their coats and run for the buses. They then hole up in the somewhat refurbished but still dank shelters and wait for the all-clear.
“It is difficult because of the sirens every day, sometimes several times a day,” said one contract worker for Leoni in Ukraine, in an interview conducted by online chat.
A few weeks later, when Leoni felt it was safe to resume a night shift, it had to figure out how to get around Ukraine’s nightly curfew. Local managers decided to let Leoni workers into the plant before the start of the curfew. They could then work through the night and leave once the curfew was lifted the next day.
Leoni executives said returning to work was voluntary and that the company continued to pay people whether they came to work or not.
One Leoni employee in western Ukraine shrugged off the hardships, the frequent air raids and hours spent in the bomb shelter.
“People are OK with it because they understand that on the front lines a lot of people died, and we must help them as much as we can,” he said by online chat. “I hope that we will continue to work here because it’s a good salary for the region.”
On March 10, Mr. Spengler and Murat Aksel, the VW board member in charge of purchasing, traveled in a station wagon packed with medical supplies from Slovakia across the border to Ukraine. Once there, they addressed the workforce at a town hall meeting.
“We stand with Ukraine,” Mr. Aksel told the crowd. “We aren’t leaving.”
On the way back to Germany, they stopped at the Polish border. Mr. Spengler said he was shocked by the sight of the refugees, who were mainly women clutching children and their personal belongings.
By the end of March, Leoni’s plants were operating at least two shifts. The materials to produce the cable harnesses arrive on trucks and finished harnesses are then taken by truck to customers in the West.
There is just one caveat. Ukrainian men between the ages of 18 and 60 aren’t allowed to leave the country, so the cabs and drivers are switched at the border in order for the cargo to continue its journey, Leoni executives said. Now, Mr. Spengler says, Leoni’s Ukraine plants are running at 80% of their prewar output.
VW, which had shut its new electric car production in the wake of the invasion, said it could restart its idled factories in Germany sooner than expected thanks to Leoni’s efforts.
Lamborghini CEO Stephan Winkelmann said the brand, part of the VW stable, had only lost three days of production for one of its models that uses Leoni’s harnesses, adding that it now had a five-day buffer of supplies.
“We are all deeply impressed by the courage of the employees at Leoni,” he added