Supplier dispute stymies production at VW plants

Production at several Volkswagen AG plants has been interrupted as a result of a halt in component deliveries by external suppliers, according to the automaker.

It is understood that 27,700 workers at six plants are affected with the dispute hitting production of Golf and Passat.

Volkswagen has not so far identified all the components affected, the name or names of the suppliers and the reason for the disruption.

However, VW names some parts as being engine, exhaust, transmission and chassis.

Some press reports point to an “unprecedented legal spat” with a supplier of seats and transmission components. That two quite differing components have been identified in Press reports suggests that at least two component suppliers are involved. It would be most unusual for seats and transmission parts to be made by the same company.

One implication behind the halt in supply could be disputes affecting terms, conditions and payments associated with particular contracts.

It is most unusual for production at the German automakers plants to be impeded by adverse component supply.

According to VW, although the Braunschweig District Court has issued injunctions obliging the suppliers to resume deliveries, the suppliers have not as yet met their obligations.

The company says it is “continuing in its efforts” to reach agreement with the suppliers. But that given “further developments are not foreseeable”, VW is making arrangements for various “flexibilization” measures to be introduced that will cause short-time working.

                                         Six plants affected

VW notes that the “measures” affect a number of plants, including Emden: Passat production, 18 – 24 August, number of employees affected: about 7,500. Wolfsburg: some segments of production: Golf, 22 – 27 August, number of employees affected: about. 10,000. Zwickau: Golf and Passat production, 22 – 26 August, number of employees affected: about 6,000. Kassel: some segments of transmission and exhaust systems production, 25 – 29 August, number of employees affected: about 1,500. Salzgitter: some segments of engine production, 24 – 30 August, number of employees affected: about 1,400. Braunschweig: some segments of chassis components and plastic parts production, 22 – 29 August, number of employees affected: about 1,300.

LATEST. VW saus it has reached agreement with two suppliers following the dispute (referred to above) that caused the car maker to suspend production of Golf and Passat due to a shortage of parts.