Facing Production Shutdowns, Volkswagen Fights Back Against Suppliers

Steph Willems
by Steph Willems

A grownup game of keep-away is taking place in Germany, and Volkswagen is the kid without the ball.

Work stoppages are looming or already occurring at four of the automaker’s plants after a supplier dispute left Volkswagen without key transmission and seat parts. With the costly fallout of its emissions scandal top of mind, the automaker plans to waltz into the supplier’s factories and take what it needs, Automotive News Europe reports.

Golf, Tiguan and Passat production is threatened after parts stopped flowing from two suppliers in early August. Car Trim, a sister company to the other supplier, manufactures seat covers, while ES Automobilguss makes iron transmission components. The companies claim Volkswagen cancelled contracts without offering compensation, so they fought back.

Volkswagen can’t afford to have the flow of its most popular vehicles cut off, but it isn’t willing to cave. The automaker called its lawyers, and last week a German court ordered the suppliers to shape up. One of the suppliers has appealed the order.

The company behind the Love Bug and the Not-So-Clean Diesel would love to play nice, but it wants its ball back, right now. According to the German newspaper Bild, the automaker has asked the court to fine the suppliers and wants permission to enter their factories in search of parts. A decision on that order is expected next week.

“We would like to reach an amicable settlement,” a Volkswagen spokesperson for the automaker told Germany’s Manager Magazin.

Prevent, the parent company of both suppliers, issued a similar statement, though it implied that hostilities could get worse if Volkswagen stays away from the table. The automaker stands to lose $45 million a week if the work stoppages continue.

[Image: Volkswagen of America]

Steph Willems
Steph Willems

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  • Stephen Stephen on Aug 19, 2016

    "A couple of rogue engineers hid the parts and we in management have no idea where they are."

  • Schmitt trigger Schmitt trigger on Aug 19, 2016

    I once read an article in Forbes Magazine, in which they stated (correctly) that the relationship between an automaker and a parts supplier was that between a sadist and a masochist.

    • NoID NoID on Aug 19, 2016

      Having worked for a supplier on the VW account, I can say that they're used to getting what they want. I work for an Ameritalian OEM now, and while we can certainly be pushy I can't see us essentially invading suppliers like their factory is the new Sudetenland.

  • Dartdude The bottom line is that in the new America coming the elites don't want you and me to own cars. They are going to make building cars so expensive that the will only be for the very rich and connected. You will eat bugs and ride the bus and live in a 500sq-ft. apartment and like it. HUD wants to quit giving federal for any development for single family homes and don't be surprised that FHA aren't going to give loans for single family homes in the very near future.
  • Ravenuer The rear view of the Eldo coupe makes it look fat!
  • FreedMike This is before Cadillac styling went full scale nutty...and not particularly attractive, in my opinion.
  • JTiberius1701 Middle of April here in NE Ohio. And that can still be shaky. Also on my Fiesta ST, I use Michelin Pilot Sport A/S tires for the winter and Bridgestone Potenza for my summer tires. No issues at all.
  • TCowner We've had a 64.5 Mustang in the family for the past 40 years. It is all original, Rangoon Red coupe with 289 (one of the first instead of the 260), Rally Pac, 4-speed, factory air, every option. Always gets smiles and thumbs ups.
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