VW Resumes Production in Germany, Ends Dispute With Suppliers

Volkswagen and two of its key suppliers have resolved a dispute that halted production of the Golf and Passat. The suppliers agreed to start delivering parts again, and VW will gradually resume production at its German plants, reports Automotive News.

The parties talked for more than 20 hours to resolve the conflict. Not only is the dispute over, but VW and its suppliers agreed to work with each other for at least another six years. The suppliers include CarTrim, which makes seat components, and ES Automobilguss, which provides parts needed to make transmissions. Both are owned by parent company Prevent Group.

The conflict started when VW reportedly backed out of a contract with suppliers and refused to pay them for costs related to the deal. The production stoppage affected six VW factories in Germany on Monday. Production of the Golf and Passat had been put on hold, as did the assembly of gearboxes and engines.

But the consequences of the decision go well beyond VW and its car parts. Because of the VW production stoppage, about 500 other companies that supply Golf parts were forced to keep their inventory as the automaker wasn’t buying, says the German Association of Supply Chain Management, Procurement, and Logistics.

Source: Automotive News (Subscription required)

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