A shortage of parts had caused major disruption at six of the automaker’s factories in Germany and forced Volkswagen to reduce hours for about 27,700 workers.
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The suppliers denied responsibility for the situation, saying Volkswagen canceled contracts without explanation or compensation and the decision to halt delivery was taken to protect their workforces.
However, following 20 hours of negotiations that lasted throughout the night, the two sides said they had reached an agreement.
Volkswagen VOWG_p.DE on Monday said production at six plants was impacted by interruptions with more than 25,000 workers affected, following a dispute between Europe’s largest carmaker and two of its suppliers.
Suppliers CarTrim which makes seats, and ES Automobilguss, which makes parts used in gearboxes, have stopped delivering to VW due to a contract dispute.
The dispute affected about 28,000 workers at six of the auto maker’s ten German factories on Monday when it halted production of the top-selling Golf and Passat models, as well as assembly of engines, gearboxes and emissions systems. It said it was “making arrangements for various flexibilization measures extending as far as short-time work”. Whether VW management should face questions for over-reliance on single suppliers needs to be clarified, he added.
Volkswagen AG halted production of its best-selling Golf hatchback Monday as the fallout widened from an unprecedented dispute with a supplier of seat and transmission components.
German newspaper Sueddeutsche Zeitung said the suppliers were seeking 58 million euros ($66 million) from VW, without citing a source for the information.
“VW’s treatment of suppliers is in no way acceptable and can leave a small provider in ruins”, Alexander Gerstung, an ES Automobilguss executive, said. The reason the German carmaker said was because of short in supply of parts.
The automaker said interruptions to its production would affect staff members.
Zwickau: Golf and Passat production, August 22 – 26, number of employees affected: approximately 6’000.
According to media reports VW – wracked by crisis after admitting past year it had installed software to cheat on diesel engine emissions tests – has been seeking concessions from all of its suppliers, amounting to several billion euros.
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In what VW said was an issue that was unrelated, production at Emden stopped.
