VW Supply Dispute Affects 27,000
August 22 2016 - 12:30PM
Dow Jones News
Volkswagen AG said on Monday roughly 27,700 employees would be
affected by reduced working hours resulting from a supplier dispute
that has disrupted production at several plants in Germany.
Production halts have hit Volkswagen's main plant in Wolfsburg,
Germany, most severely, where 10,000 workers are affected, the car
maker said. Plants in Emden, Zwickau, Kassel, Salzgitter and
Braunschweig also will work reduced hours in the coming days.
Volkswagen warned that it couldn't foresee further developments,
but according to its current planning most stoppages would end as
of this weekend. In Kassel and Salzgitter, production measures will
end early next week.
Volkswagen, still reeling from an emissions scandal that has
cost it billions of dollars, last week said a shortfall in seating
and gearbox components meant it had to adjust production for some
models, including the Golf and Passat.
The auto maker and two suppliers—Car Trim and ES
Automobilguss—resume negotiations Monday to resolve the matter
after the suppliers cut delivery. The suppliers denied
responsibility for the situation, saying Volkswagen cancelled
contracts without explanation or compensation and the decision to
halt delivery was taken to protect their own workforces.
Germany's Economics Ministry on Monday urged Volkswagen and the
suppliers to resolve the dispute quickly.
"This is about thousands of jobs that could be affected by
shorter working hours," a ministry spokesman said. "There's a
responsibility to approach these issues as constructively as
possible and resolve them as constructively as possible."
Volkswagen employs 276,000 people in Germany, 73,000 of them in
Wolfsburg. The company is still sorting out financial and strategic
issues caused by a scandal that erupted nearly a year ago when U.S.
authorities disclosed Volkswagen rigged vehicles with software that
let them perform better in pollution tests than on the road.
Volkswagen later said the software was installed in some 11 million
vehicles world-wide.
Despite the German output disruptions, the head of Volkswagen's
works council, Bernd Osterloh, said he wasn't concerned the current
wrangle with suppliers would lead to job cuts.
Hendrik Varnholt and Andrea Thomas contributed to this
article.
Write to Sarah Sloat at sarah.sloat@wsj.com
(END) Dow Jones Newswires
August 22, 2016 12:15 ET (16:15 GMT)
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