VW settles supplier dispute, to restart production at six plants
Stefan Baumgarten
23-Aug-2016
LONDON (ICIS)–Volkswagen (VW) has settled a dispute
with two car parts suppliers who had ceased supplying the
German car maker, a company official said on Tuesday.
The settlement and resumption of supplies of parts needed for
gearboxes and seats enables VW to resume production that was
disrupted at six plants in Germany.
The disruptions, which included VW’s base in Wolfsburg, Lower
Saxony state, affected almost 28,000 workers. Because of
just-in-time logistics, there was a ripple effect
throughout the company’s supply chains.
Details of the settlement were not disclosed, and it remains
unclear when VW will resume full production at the
plants.
A court in Brunswick, Lower Saxony, earlier issued an
injunction obliging the suppliers to resume deliveries.
The head of Lower Saxony’s government, Stefan Weil, told
the media that he welcomed the settlement. The state holds a
stake in VW.
Meanwhile, German financial regulator BaFin is probing
whether VW may have infringed disclosure requirements, the
country’s state media group ARD reported, citing a BaFin
spokesperson.
The company officially confirmed the disruptions on its
investor relations site on Monday, 22 August. However, the
suppliers, CarTrim and ES Automobilguss (ESA), had already
ceased supplying VW in early August. The suppliers are both
owned by Prevent Group.
The dispute broke out after VW cancelled an order with
CarTrim, according to media reports.
Analysts estimate that VW’s Wolfsburg plant was affected
for about a week because of the supply disruptions.
Last year, VW’s relations with suppliers came under strained
amid alleged attempts by the car major to extract big cost savings from
suppliers following its diesel car emissions
scandal.
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