Golf production will restart soon.
Volkswagen has agreed to pay nearly $15 million in compensation to suppliers to end a dispute that brought production of the Golf to a halt for six days, reports Automotive News Europe.
Prevent DEV was demanding €58 million ($66 million) to recoup money it spent expanding production to meet a €500 million ($564 million) order that VW cancelled. The automaker has got off relatively lightly, then, paying out €13 million ($14.7 million) and agreeing to stick with Prevent for the next six years.
The dispute centered on Prevent subsidiaries ES Automobilguss, which makes gearbox components, and CarTrim, which makes seat covers. Both stopped deliveries, affecting production at six of VW’s ten German factories.
Worst affected was the main site at Wolfsburg which had to be shuttered, halting production of the Golf. Passat, Tiguan, and Touran production was also affected. 28,000 workers had to be sent home or put on reduced hours.
As reported yesterday, ES Automobilguss and CarTrim will restart deliveries as quickly as possible, and production at VW’s factory will gradually ramp back up.
VW Group has been seeking to cut costs from the core Volkswagen brand by €1 billion per year in an attempt to cover the cost of the dieselgate scandal. Negotiating price cuts from suppliers is a key part of the drive, which may have been set back by this rare backlash against its often strong-arm tactics.
Source: Automotive News Europe