The dispute affected about 28,000 workers at six of VW’s 10 German factories on Monday when the automaker halted production of the top-selling Golf and Passat models, as well as assembly of engines, gearboxes and emissions systems, due to the Wolfsburg-based suppliers’ refusal to deliver products like seat covers and gearbox parts.
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A spokesman for Prevent, the parent company of the two firms, told German business daily Handelsblatt that VW was imposing “unacceptable conditions” on its suppliers.
Faced with billions of euros of costs from its emissions scandal, VW has indicated it would seek price cuts from its suppliers.
“Volkswagen continues its efforts to reach agreement with the suppliers”, the carmaker said in a statement, according to Bloomberg.
At the Frankfurt stock exchange, a bond trader with ICF Bank, Arthur Brunner, said investors don’t seem too troubled: “Apparently the markets are convinced that VW will agree with the suppliers and also the Lower-Saxony government is putting on pressure, threatening with a penalty payment”. Prevent refused to abide by a court ruling to resume parts deliveries.
But several German states are examining legal action to claw back losses to pension schemes and other holders of VW shares.
The German auto maker, which was also involved in the diesel emission scandal, had to idle six vehicle assembly plants last Monday in Wolfsburg and Emden, which halted the production of Golf along with the Passat brand. “It is about thousands of jobs, which could be affected by shorter work hours, and the responsibility to tackle these problems constructively is very high”, said Ministry’s spokesperson Andreas Audretsch, as reported by BBC.
The conflict between both the parties signals towards the extent to which a part maker can bring disruptions to an automaker’s production process. Through his Halog GmbH and Cascade International Investment GmbH holding companies, Hastor has accumulated a 15.2 per cent stake in German vehicle-seat manufacturer Grammer AG.
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