VW, suppliers settle dispute after marathon talks

Tue Aug 23, 2016 5:58pm EDT
 
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By Andreas Cremer

BERLIN (Reuters) - Volkswagen (VOWG_p.DE: Quote) and two of its parts suppliers on Tuesday resolved a contract dispute that had hit output at more than half of the carmaker's German plants and threatened to undermine its recovery from a diesel emissions scandal.

After more than 20 hours of negotiations that went on through the night, VW said it had settled its differences with CarTrim, which makes seats, and ES Automobilguss, which produces cast iron parts needed to make gearboxes, but gave no details. The suppliers confirmed an agreement had been reached.

The conflict had threatened VW's profitability following last year's diesel emissions test cheating scandal and also risked hurting hundreds of other VW suppliers.

The suppliers were seeking compensation for lost revenue they said ran into tens of millions of euros after VW canceled a contract.

The dispute affected about 28,000 workers at six of VW's 10 German factories on Monday when the automaker halted production of the top-selling Golf and Passat models, as well as assembly of engines, gearboxes and emissions systems.

VW said on Tuesday the suppliers had agreed to start delivering parts again and the affected plants would gradually resume production.

The new deal will see the suppliers working with VW for at least another six years, and VW will also be able to source part of its needs from other suppliers over that time, German paper Sueddeutsche Zeitung reported in an advance copy of an article to be published on Wednesday.

VW was not immediately available for comment on the report.   Continued...

 
A general view shows the Volkswagen production site in Wolfsburg, Germany, April 28, 2016.    REUTERS/Fabrizio Bensch/File Photo