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Volkswagen halts production of Golfs in dispute with suppliers

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Baku, August 23, AZERTAC

The German Economy Ministry is urging Volkswagen and two of its suppliers to quickly end a dispute that has created production delays at six plants including VW’s main factory in Wolfsburg, according to Euronews.

The companies – CarTrim, which makes seats, and ES Automobilguss, which makes cast iron parts for gearboxes – are seeking compensation.

The two are both part of the same group, Prevent, which said it lost tens of millions of euros when VW canceled contracts without any explanation after the parts suppliers had already spent money to make changes at their factories.

The carmaker, which said it is still trying to reach agreement with the firms, earlier failed in its legal efforts to force them to to resume deliveries of parts.

Meanwhile more than 27,000 employees are working shorter shifts and production of the Passat and Golf models has been halted.

It is estimated the stoppages could cost VW up to 100 million euros a week.

On the Frankfurt stock exchange, VW’s shares finished the day little changed on Monday.

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