Volkswagen production is expected to resume shortly after a dispute with suppliers has been resolved. Car seats and essential gearbox components were unavailable due to a dispute over cancelled contracts. This was reported in Market.biz Tuesday.
Volkswagen was said to have cancelled a contract with suppliers that were owned by Prevent Group, a company based in Wolfsburg Germany. Prevent had sought compensation for the cancelled contract and refused to make further deliveries of essential vehicle parts to VW until the dispute had been settled. The issue had created a great deal of disruption to Volkswagen, and the company had to reduce the working hours of 27,700 staff.
Neither company has provided details for the settlement they claim had been agreed to. However, it is known that deliveries will resume, including those of gear boxes and seat fabrics, which will enable Volkswagen to get back on stream with production of the VW Golf. Whether or not production will shortly be back to normal levels is unknown. Neither Volkswagen nor Prevent would be forthcoming on this matter. However, Volkswagen has recommenced production.
The Wolfsburg factory was worst affected by the dispute. This is the home of the VW Golf, which was the worst affected of the VW models. In 2015, this plant produced 815,000 vehicles. A single week of lost production would likely cost Volkswagen a gross profit loss in the region of 100 million euros ($113 million.)
Volkswagen did not comment on the actual loss, current and future, accrued as a result of the dispute. However, it did make a statement that the availability of VW cars was not affected by the hiccup in Volkswagen production. Customers would not have to wait any longer than normal. In spite of all this, including the diesel emissions scandal, global sales have scraped a 1% gain in the first 5 months of the year.
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