Volkswagen Golf Production to be Halted

News appearing in Automotive News indicate that Volkswagen Golf production will be halted in Wolfsburg, Germany amid a dispute between two key suppliers and VW.

Volkswagen Golf GTI Clubsport
Volkswagen Golf GTI Clubsport
According to VW, CarTrim has stopped indefinitely the supply of seat covers and ES Automobilguss has also stopped the supply of cast iron parts used in VW Golf gearboxes. It is worth noting that Prevent DEV owns these two companies.

VW has said that Golf manufacture will be stopped for five days next week at the Wolfsburg factory. Hours will also be cut for a sixth of the 60,000-strong VW workforce. Sadly for VW, this plant also builds the Touran Minivan and the Tiguan SUV. This supply stoppage has also affected the Zwickau plant that makes some Golfs and Passats and the Kassel plant that manufactures gearboxes. Meanwhile, the Emden facility that also builds Passats has been shut until 24 August this year.

AN has also quoted Bankhaus Lampe, a renowned analyst who has suggested a modest loss of €40 million ($45 million) a week from the lost production.

CarTrim and ES Automobilguss has issued a statement through Prevent DEV saying that this dispute has come as a result of VW canceling some contracts. “Because VW has declined to provide compensation, ES Automobilguss and CarTrim have been forced to stop all supplies indefinitely,” the statement reported.

The German press says the dispute is really over a disagreement over a joint venture and VW’s continued demands for major price cuts. It is worth noting that the automaker is focused in cutting €1 billion in annualized costs to improve on its slim profit margin and generate funds for compensation in the growing dieselgate saga costs.

Meanwhile, Volkswagen is exploring what legal action options are available in the matter which includes using bailiffs to remove forcibly from CarTrim and ES Automobilguss the parts needed.

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