Volkswagen AG is considering a plan to reduce working hours at five German plants due to a supplier dispute that has disrupted production, the auto maker said on Thursday.
Volkswagen already has reduced working hours for employees at its large assembly plant in Emden due to a parts shortage, the company said, and four of the auto maker’s other sites could be affected. The measures could affect as many as 20,000 employees, a person familiar with the situation said.
Although a regional court has ordered the supplier to abide by its contracts with the car maker, it hasn’t happened yet, Volkswagen said.
If the supplier doesn’t resume delivery, Volkswagen’s plants in Wolfsburg, Zwickau, Kassel and Braunschweig might have to introduce short-time work or otherwise adjust working hours in the coming weeks, the company said. Short-time work refers to a plan in which work hours are cut for a limited period of time but any corresponding shortfall in pay is partly compensated by the government. The program generally is instituted to prevent job losses.
Volkswagen, Europe’s largest auto maker, employs about 276,000 people in Germany. The company is grappling with financial and strategic issues grappling with financial and strategic issues caused by an emissions-cheating scandal that erupted nearly a year ago.
Volkswagen declined to name the supplier involved in the current dispute. However, the Braunschweig regional court, near Volkswagen headquarters, said two units of parts supplier Prevent are in conflict with Volkswagen over delivery contracts. It named Car Trim GmbH, which makes parts for seating, and ES Automobilguss GmbH, which makes gearbox parts, among other components.
The person familiar with the matter said Volkswagen’s main Wolfsburg plant is short on gearbox parts for its Sportsvan and Golf models. The Emden plant is low on seating parts, he said.
The head of ES Automobilguss, Alexander Gerstung, confirmed his company is in a legal dispute with Volkswagen but declined to elaborate. Car Trim could not be reached for comment. The parent company, Prevent, declined to comment.
By: Hendrik Varnholt (The Wall Street Journal).
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The head of ES Automobilguss, Alexander Gerstung, confirmed his company is in a legal dispute with Volkswagen but declined to elaborate. Car Trim could not be reached for comment. The parent company, Prevent, declined to comment.
By: Hendrik Varnholt (The Wall Street Journal).
Photo: Yahoo.
Review: Emerging Market Formulations & Research Unit, FLAGSHIP RECORDS.
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