Prevent Group will restart deliveries as soon as possible, and Volkswagen’s affected factories will gradually return to normal production, the companies said in a joint statement on Tuesday.
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“Given the slowdown of VW sales (excluding China), the brand certainly needs to slightly trim production levels”, said London-based Evercore ISI analyst Arndt Ellinghorst.
Production halts have hit Volkswagen’s main plant in Wolfsburg, Germany, most severely, where 10,000 workers are affected, the vehicle maker said.
The embattled auto maker is facing the issue of disgruntled suppliers in the backdrop of disastrous diesel emission fraud, which the company is yet to recover from.
VW said the stoppages were part of regular production adjustments.
Volkswagen shares dropped as much as 1 percent and were down 0.5 percent as of 3:20 p.m.in Frankfurt trading.
But they refused, saying that VW had cancelled future contracts without providing adequate compensation.
VW’s legal efforts to force CarTrim, which makes seats, and ES Automobilguss, which makes cast iron parts needed to make gearboxes, to resume deliveries have been without success, the carmaker said.
Wolfsburg: some segments of production: Golf, August 22 – 27, number of employees affected: approximately 10’000.
Handelsblatt reported that VW had been seeking concessions from all of its suppliers, amounting to several billion euros. It said that the two sides have agreed a long-term partnership.
VW confirmed there will be fresh deliveries of seat and gearbox parts with production resuming under the company’s ‘just in time’ system.
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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. Volkswagen production is already stopped at four plants, while two other plants are waiting to end production later this week.
