Volkswagen states 6 German plants hit by supplier dispute

by SpeedLux
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Volkswagen informed it faced production delays at majority of its German plants because of a row with 2 suppliers that experts approximate might cost the automaker 10s of millions of euros.

Around 28,000 workers at 6 of Volkswagen’s 10 German factories were affected after the automaker halted production on Monday of the top-selling Golf and Passat designs as well as assembly of engines, gearboxes and emissions systems because of scarcity of parts.

Volkswagen’s supplier dispute postures a risk to the company’s success as it seeks to recoup following its diesel emissions scandal.

Experts at UBS estimate that a one-week production halt at its Wolfsburg head office would result in about 100 million euros ($113 million) in lost gross revenues and might have ripple effects on other providers.

“Production at numerous Volkswagen plants has been interrupted as a result of a halt in parts deliveries by external suppliers,” Volkswagen said in a declaration.

Efforts by Europe’s biggest automaker to force CarTrim, that makes seats, and ES Automobilguss, which produces cast iron parts required to make gearboxes, to resume deliveries have not succeed, Volkswagen stated.

The regional suppliers, part of Wolfsburg-based Prevent DEV, are seeking payment after stating they dealt with lost incomes running into tens of millions of euros after Volkswagen cancelled an agreement. Volkswagen is seeking to solve the disagreement in high-level talks with the providers on Monday afternoon.

Germany’s Economy Ministry called for a speedy end to the disagreement, adding that thousands of employees were impacted.

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