Volkswagen Re-Examine Supplier Strategy After Dispute Hits Manufacturing

by SpeedLux
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Volkswagen CEO Matthias Mueller has pledged to review the German automobile giant’s procurement strategy to prevent any repetition of the crippling supplier conflict that hit production at six plants this month.

Still reeling from a diesel emissions scandal, Volkswagen will re-examine contracts that leave the group depending on a single supplier after the dangers were highlighted by its damaging wrangle with Bosnian parts maker Prevent, Mueller stated.

“We will, of course, check out questions such as multi-sourcing, single-sourcing,” he told reporters late on Monday. “We will look at our procurement agreements and aim to optimize matters with all providers.”

Carmakers generally look to avoid over-dependence on any one provider and look for to replicate critical connections even at a little greater unit expenses.

However Car Trim and ES Automobilguss, 2 suppliers within independently held Prevent group, exposed a vulnerability when they stopped seat cover and gearbox parts deliveries, triggering blockages at Volkswagen assembly plants.

From the 2008 financial crisis, automakers have outsourced more parts development and manufacturing to save cash and satisfy technological demands for electric cars, smartphone-compatible infotainment and autonomous driving.

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