But the part suppliers have appealed the decision, forcing VW to slash work hours at key factories, and even suspend manufacture of the popular Golf model at its main plant in Wolfsburg, northern Germany. The suppliers will restart deliveries as soon as possible, and the factories affected will return to normal production on a step-by-step basis, VW said. Whether VW management should face questions for over-reliance on single suppliers needs to be clarified, he added.
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Grappling with an emissions-test cheating scandal that is costing VW billions of euros, VW is expected by analysts to seek price cuts from its suppliers to mitigate those costs.
What this means for the VW Golf, Europe’s best-selling vehicle, is that its production will be halted in Wolfsburg for five days next week, cutting working hours from 10,000 out of the 60,000 people employed at the factory.
“The consequences for the entire supply chain are already considerable today”, Christoph Feldmann, managing director of the association, said in a statement.
The suppliers, owned by Prevent Group, are seeking compensation for a contract they said was canceled by Volkswagen, according to a German newspaper report. On Monday, production ceased at Wolfsburg, which normally makes 2,200 Golfs a day and employs 10,000 people; Zwickau, which produces Golfs and Passats; and Braunschweig, which makes chassis components and plastic parts. As many as 27,700 workers across six factories could be sent home amid a shortage of parts supplied by subsidiaries of Bosnian-based Prevent Group.
Car Trim has so far ignored an injunction that VW has obtained and the regional court in Braunschweig is due to consider a possible injunction against ES Automobilguss on August 31. VW is under pressure to reduce spending as it grapples with lawsuits and regulatory investigations after disclosing last September that 11 million diesel-powered cars were equipped with software created to cheat on emissions tests.
The auto maker and two suppliers-Car Trim and ES Automobilguss-resumed negotiations Monday afternoon to resolve the matter after the suppliers cut delivery.
Kassel: some segments of transmission and exhaust systems production, August 25 – 29, number of employees affected: approx.
At Emden, where the company makes the Passat, production was halted last Thursday when the carmaker ran out of seats.
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The suppliers, one making seats and the other parts used in gearboxes, have stopped delivering to VW in a contract row.
