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VW suppliers settle dispute after marathon talks

Tuesday, August 23, 2016 - 01:28

Volkswagen and two of its car parts suppliers appear to be edging towards a resolution of a contract dispute that has hit output at more than half of its German plants. Sonia Legg reports

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Volkswagen didn't need the media attention. Or the cost of lost production. Two good reasons then to settle a dispute with suppliers. Talks went through the night with two of them - seat maker CarTrim and ES Automobilguss, which makes parts for gear boxes. An agreement was reached after 20 hours (SOUNDBITE) (English) CHIEF ECONOMIST, WORLD FIRST, JEREMY COOK, SAYING: "Volkswagen have been guilty in the past of using their power, using their huge size, to lean on suppliers and basically sign the deal that we want, and if you don't like it you can swing for it. I think they may have realised that they were going against a behemoth and have settled as a result." The conflict had been threatening VW's profitability following last year's emissions test cheating scandal. 28,000 workers at six of the car maker's 10 German factories were affected. And on Monday production of top-selling Golf and Passat models was halted. The suppliers were seeking compensation for lost revenue they said ran into tens of millions of euros after VW cancelled a contract. Germany's economy ministry stuck its oar in - warning of the broader impact on jobs UBS analysts had estimated one week of lost production at VW's Wolfsburg headquarters would result in 100 million euros in lost gross profit. Money VW could ill afford when it's facing billions of euros of costs from the emissions scandal.

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VW suppliers settle dispute after marathon talks

Tuesday, August 23, 2016 - 01:28