Discord with supplier disrupts VW production

Discord with supplier disrupts VW production

Discord with supplier disrupts VW production German automaker Volkswagen (VW) has cut work hours for some 20,000 workers in factories spread across its home court due to a parts shortage ensuing from a disagreement with a supplier, a source familiar with the situation said in a report.

The firm has already cut working hours in its Emden assembly plant, and the parts shortage may cause more production disruptions in four other sites across Germany, according to reports. 
A regional court has ordered the supplier to resume deliveries, but the car maker said action has yet to be taken over the directive.

VW is Europe’s largest automaker in terms of sales and has nearly 300,000 employees in Germany.

To cope with the disruption, VW has introduced short-time work hours, expected to last over the next few weeks. Short-time work refers to a government plan in which it underwrites the pay short fall resulting from reduced work hours to assist companies and prevent job losses.

In a separate report, the suppliers said to be responsible for the parts shortage stated that the company owes them overdue payables and that the halt in supply was undertaken to “protect the financial health” of their companies.

A recent settlement with US regulators and individual consumers over a complaint against its emissions software made an $18 billion dent in VW’s coffers.

Still, a manager for one of the suppliers Alexander Gertsung said they “seek a mutually agreed solution with (VW) and are open to suggestions.”