Facing Production Shutdowns, Volkswagen Fights Back Against Suppliers
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]
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"A couple of rogue engineers hid the parts and we in management have no idea where they are."
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.