Monday, August 22, 2016

Volkswagen: What fights VW with its suppliers? – Times Online

Volkswagen is in the next crisis. Europe’s largest automaker with more than 600,000 employees have to adjust partly because of a dispute with supplier companies production. Thousands of employees affected by short-time working, cars can not be delivered. What is the dispute, what consequences it has and how it goes: the most important answers to supply dispute.

What is it?

Two suppliers of VW refuse ordered parts for gear and seats deliver. These are mainly intended for the golf, the most important Volkswagen model. Because VW wants to become more profitable and need to save because of the consequences of the gas scandal, the company wants the company to pay less or reduce the size of orders. For every VW model and each brand out of Wolfsburg take dozens suppliers on in some long international interwoven chains.

The two companies from Saxony, ES Automobilguss and Car Trim argue , the automaker forcing them to practice the delivery stop, because contracts were terminated “without notice and without reason”. According to a media report is about 58 million euros, missing the medium-sized companies in the future and for which they want a balance of VW. By exposing the contracts had jobs at risk, so they had now resorted to the action, explaining the trader. In ES on Monday a joint meeting was convened.

How can small suppliers paralyze a group?

It is not the first time that such a thing happens. 1998 caused, for example, lack of door locks with a Ford production downtime. However, the extent is at VW now another. If a supplier is the sole source for a component, of course, he has a certain power. The car expert Ferdinand Dudenhoeffer raises VW in the context error before: “If you already go to single sourcing , you need a very solid and very stable business relationship.”

ES and Car Trim are with Volkswagen have long good business and are considered stable partner. ES specializes in casting gear, Car Trim on interiors such as car seats. Behind the two companies is the Prevent Group. This has its Germany-based in Wolfsburg, the root of the large corporation is Bosnia and Herzegovina. Internationally there are noisy website more than 20 locations, the formal head office is located in Slovenia.

Suppliers Group has been in business for decades and is, according to a media report in the dispute with VW rival Daimler. In a trial Prevent demand compensation in the millions because of canceled contracts.

Who is affected by the halt in production at VW?

in the works in Emden, Wolfsburg, Zwickau, Kassel, Salzgitter and Braunschweig total 27,700 employees could not work part until the end of August, as it was originally planned, reports the VW works. If working hours are applied and the Federal Employment Agency agree, workers receive more salary and wages for the time actually worked. Your failing net salary is offset by the short-time allowance partially: to 60 percent in those without children and 67 percent for employees with at least one child.

On Saturday the group had suspended at the Wolfsburg parent plant areas in preparation for the production. From Monday to Saturday fall layers in the core production. In Zwickau mounting the Golf and Passat models continues. In Emden, the workforce had already worked in recent days less, for 7,500 employees working hours were logged. What’s next, one can anticipate over the next days, according to VW only.

What does this mean for customers?

Some traders worry about the delivery of ordered cars. The VW distribution announced that will expect a relaxation of the situation. For each car, it could however be delayed.

What about costs VW?

There are only rough calculation examples. The news agency dpa calculates that in the week alone in Wolfsburg and Emden per day about 3,450 cars are less generated. In the first half of the core brand have earned on average at each delivered cars before interest and taxes 394 Euro. Accordingly, the loss of production per week caring less operating profit for nearly seven million euros.

However, the cars shipped yes, just probably a little later. No one knows how long or short the loss of production and whether compensation to customers or suppliers need to be paid.

What next?

On Monday afternoon there will be again talking with Prevent. This had last but brought nothing: Until the early hours of last Saturday were negotiating the counterparty without some at least over the interpretation of the schedule.

When Landgericht Braunschweig Volkswagen has obtained injunctions for ES and Car Trim to deliver the parts. According to the Court, the decrees are enforceable, although still pending deadlines for submissions. After presentation of the supplier, it is not possible to confiscate the parts, because the Braunschweiger available only arrange “the supply in yet to be determined amount of”. Wool VW enforce this forcibly, another application and decision was necessary. Whether VW actually brings into effect at the end of my bailiff auto parts, is not yet clear.


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