Volkswagen has settled a major dispute with suppliers that had disrupted auto production at more than half its German plants and threatened to derail its recovery following the diesel emissions scandal. However, following 20 hours of negotiations that lasted throughout the…
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The dispute pitted Volkswagen against suppliers ES Automobilguss and Car Trim, and affected supplies of gearbox parts and seat covers.
BERLIN-Volkswagen and two of its parts suppliers on Tuesday, Aug. 23, resolved a contract dispute that had hit output at more than half of the carmaker’s German plants and threatened to undermine its recovery from a diesel emissions scandal. The suppliers confirmed an agreement had been reached.
The suppliers in question had claimed VW broke off several contracts with no advance warning or adequate compensation, leaving them “with no choice but to suspend deliveries to protect the workforce”.
It said the suppliers had agreed to restart delivery, and that preparations for restarting production have begun, but that no further details of the agreement would be released.
A UBS analyst cited by Reuters suggests the interruptions could cost VW around 100 million euros in lost gross profit.
Five hundred companies that supply parts for the Golf were being forced to build up inventories because the carmaker was not buying, according to the German Association of Supply Chain Management, Procurement and Logistics. In others, they went on to short-time working on other jobs within the plants.
Lower Saxony is home to tens of thousands of VW workers at the group’s Wolfsburg headquarters and is also a major VW shareholder.
VW’s vehicle and parts manufacturing has already been stopped at four plants and will be stopped at two others later this week.
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Company said the stoppages in production would affect 27,700 employees.
