VW to cut hours for 10,000 workers in Wolfsburg amid supplier row

Baku, August 20, AZERTAC

Volkswagen will cut working hours for more than 10,000 staff at its Wolfsburg base and reduce output at two more German sites, a source close to the company said, as the carmaker faces supply problems caused by a parts maker not keeping to delivery commitments, according to Reuters.

Europe's largest automaker had said on Wednesday that production of its top-selling Golf model at Wolfsburg was being hit because supplier ES Automobilguss GmbH has stopped delivering cast iron parts needed to make gearboxes.

The disruptions coincide with similar problems in Emden, VW's northern German plant where supplier Car Trim GmbH, a sister company of ES Automobilguss, stopped deliveries of seat covers earlier this month. Both firms are part of Wolfsburg-based Prevent DEV GmbH. Prevent has not responded to a Reuters' request to comment.

Analysts at Swiss bank UBS said in a note published on Thursday that should the dispute result in output cuts at the Wolfsburg and Kassel plants, the financial impact "could be more severe than initially expected" with the reduced output at Emden.

Grappling with an emissions-test cheating scandal that is costing VW billions of euros, VW is expected by analysts to seek price cuts from its suppliers to mitigate those costs.

VW said in June it would integrate components units with the goal of saving costs and boosting efficiency from a single management and unified strategy.

VW's engine plant in Salzgitter declined to comment on possible repercussions on production while spokespeople at a commercial-vehicle factory in Hanover and a component plant in Braunschweig had no immediate comments.

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