Little time? End of the text there’s a summary.
VW’s main plant the belts stand still. No Golf rolls off the line, thousands of employees are forced leave. Sitting not far away from the production facility in Wolfsburg reportedly together those who are responsible for this situation. Volkswagen and suppliers conglomerate Prevent looking for a way out on the conflict in which it is for both sides to a lot – and its outcome is uncertain. It is a power struggle in an industry whose companies are connected by a dense network of dependencies.
On the one hand is the carmaker Volkswagen, which is urgently needed for its production of parts, more than half a cars today comes from suppliers. On the other side sits one of these suppliers, the company Prevent Group; a nested companies construct their daughters produce seat covers, window panes and transmission parts.
VW and Prevent are not related to each other for decades. Founder Nijaz Hastor once built for VW Beetles and Golfs, after the war in Yugoslavia, he started his own business. For a long time was the cooperation smoothly, at least outwardly.
Only Zoff in Brazil, now in Germany
The current conflict but has a history on the other side of the world. Also in Brazil Prevent subsidiaries that provide there at Volkswagen. For a few months the Prevent subsidiary Keiper supplies the VW factories no longer reliable with car seats – why Volkswagen has already built less around 100,000 vehicles this year by its own account. Even the Prevent company Farmaq should have stopped their supplies in Brazil – it provides castings. And there are other striking similarities to the conflict in Germany
the beginning of 2015, the Prevent Group had taken over the South America business of seats manufacturer Keiper through its subsidiary Eastern Horizon -. Shortly after the problems started with VW. The pattern is now being repeated in Germany: Six months ago, Eastern Horizon bought the seat cover manufacturer Car Trim and the company ES Automobilguss. With both companies VW decades has already claims to be an “excellent partnership” – so far
On the surface, it comes in the open now marked by acrimony to a development order from Volkswagen in Car Trim for new car seats in volume. around 500 million euros. VW and Porsche announced the contract shortly before the deadline – Car Trim is now demanding compensation 45-58 million euros for investments already made.
production downtime costs 100 million
Because Volkswagen to pay refuses Car Trim has its deliveries stopped – and given up some of its demands on IT Automobilguss whose Share VW desperately needs for the production of the Golf
A smart move – because so amplified Prevent pressure on VW. ES Automobilguss is the only supplier of these components, in the short term, the automaker has no alternative for procurement of transmission , And so resting the bands, 28,000 workers in six plants affected. Analysts at UBS believe that VW characterized in every week, in the production rests, loses around 100 million euros
Why the carmaker takes such enormous costs in purchasing -. Although the dispute but comparatively low is?
the dispute between Prevent and Volkswagen is also a proxy war of the auto industry. Suppliers and carmakers can not live without each other – but the power is distributed unequally. “The manufacturers determine the rules of the game,” says auto expert Stefan Bratzel from the Fachhochschule Bergisch Gladbach. The relationship between the supposed partners is tense. Again and again complain suppliers that they are delivered to manufacturers.
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Source:. Handelsblatt, VW Navigator
“the way how VW deals with suppliers, is totally unacceptable and can each smaller operation to ruin driving” says Alexander Gerstung, member of the management ES cast. that they are forced to approach Both Prevent companies share writing, “to protect our own employees in Lower Saxony and Saxony, and ultimately ensure the survival of the company”.
extortion or last chance?
Autoexperte Bratzel compares the approach of Prevent in dispute with VW with extortion. However, he does not believe that the group the situation of calculus has escalate. “The dispute has its own momentum and high rocked,” says the Car expert. “The way how this dispute is discharged, limits have been exceeded.”
The negotiations are so difficult because a give in mutually would Momentous. Prevent it with the delivery stop a big risk: Other automakers will consider in the future whether they work with a company that paralyzes the production in case of dispute. “If VW sues for damages for the loss of production, it can go for the company to survive,” said Bratzel. Other suppliers suffer from the delivery stop: Standing at VW the tapes still, they remain sitting on their components
But for VW a steering into this dispute would be fatal.. Prevent Sets by itself, the position of the supplier would be strengthened – other companies might choose a similar approach to disputes.
There are therefore some suppliers who support the crackdown of the Prevent Group against Volkswagen secretly. In the industry, it is feared that the dispute between VW and Prevent will not be the last. The largest car maker in Europe is taken from the exhaust affair – and must save more. This could in future get to feel other suppliers.
In summary: Because of the dispute between Volkswagen and the Prevent Group has escalated, rest in six plants, the ribbons, tens of thousands of VW -Arbeiter are forced leave. The situation is deadlocked: The supplier has no tolerance, VW remains hard. A relent would be momentous for both parties.