Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: All or nothing: Why circular business models require a holistic approach
    • Capgemini: Invent Head on automotive takeaways from CES 2023
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • Capgemini: The circular economy is spurring new thinking on EV batteries
    • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Automotive News Europe
August 19, 2016 01:00 AM

VW to halt Golf production as supplier dispute hits 4 German plants

Staff and wire reports
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    A shortage of transmissions will halt Golf production at VW's Wolfsburg factory.

    MUNICH -- Volkswagen Group is stopping production of its key Golf hatchback at its main German factory in Wolfsburg as a dispute with two key suppliers escalates, reports said. The automaker is also cutting working hours in three other plants across Germany.

    VW said Golf production was being hit because supplier ES Automobilguss has stopped delivering cast iron parts needed to make gearboxes. Car Trim, a sister company of ES Automobilguss, stopped deliveries of seat covers earlier this month. Both firms are part of Wolfsburg-based Prevent DEV.

    German press reports said the dispute involves a payment disagreement over a joint venture and price cuts demanded by VW, which is seeking to reduce costs amid its diesel emissions scandal.

    VW is considering "every legal means at its disposal" to force the suppliers to meet their delivery commitments, multiple German media outlets reported today. This could lead to police accompanying trucks into the parts plants to collect components, the reports said. VW has taken out an interim injunction against the suppliers and a court hearing is scheduled for Aug. 31.

    VW will halt Golf production in Wolfsburg for five days next week and will cut working hours for more than 10,000 of the 60,000 staff employed at the factory, its biggest plant, reports said. The plant builds Tiguan SUVs and Touran minivans in addition to the Golf, which is Europe's best-selling car.

    Shifts will also be curtailed at VW's gearbox-making facility in Kassel and at a plant in Zwickau that builds Golfs and Passats. VW's factory in Emden, which builds Passats, will be idled from Aug. 18-24, losing production of 6,250 cars after Car Trim stopped deliveries to VW's SiTech subsidiary.

    The dispute may reduce earnings by as much as 40 million euros ($45 million) a week, said Christian Ludwig, an analyst at Bankhaus Lampe. The conflict highlights the degree to which a parts-maker can disrupt output as automakers rely increasingly on suppliers to produce a large portion of their vehicles while squeezing them to cut prices.

    The decision by the suppliers to stop deliveries is "incomprehensible and a heavy burden for Volkswagen and its employees," the economy minister of VW's home state of Lower Saxony, Olaf Lies, told the state parliament on Thursday.

    CarTrim and ES Automobilguss today said the dispute had erupted because the VW had cancelled contracts without giving a reason and had refused to offer compensation, prompting them to stop deliveries. "Because Volkswagen declined to offer compensation, CarTrim and ES Automobilguss were forced to stop deliveries," the companies said in a statement issued through parent company Prevent DEV GmbH.

    VW is looking for cost cuts to improve poor profitability at its core VW brand and to help cover the rising costs of its emissions scandal. The automaker plans to reduce annual spending at VW brand by 1 billion euros.

    VW sold 261,776 Golfs in Europe in the first half, up 1 percent, according to JATO Dynamics market researchers.

    Reuters and Bloomberg contributed to this report

    RECOMMENDED FOR YOU
    2022 Eurostar winner Enrico Salvatori of Qualcomm
    Related Articles
    VW ready to seize withheld parts from supplier plants, report says
    VW ready to seize withheld parts from supplier plants, report says
    Recommended for You
    Enrico Salvatori
    2022 Eurostar winner Enrico Salvatori of Qualcomm
    Christian Dahlheim
    2022 Eurostar winner Christian Dahlheim of VW Financial Services
    Milan Nedeljkovic
    2022 Eurostar winner Milan Nedeljkovic of BMW
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
      • ANE Eurostars
    • More
      • Publishing Partners
        • Capgemini: All or nothing: Why circular business models require a holistic approach
        • Capgemini: Invent Head on automotive takeaways from CES 2023
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us