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Business

Volkswagen workers face cut in hours

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By Catherine Hardy  with REUTERS
Volkswagen workers face cut in hours


I think it will end with both parties coming to an agreement in one or two weeks

Juergen Pieper *Bankhaus Metzler car expert

Volkswagen is to cut working hours for more than 10,000 workers at its Wolfsburg base.

Output will be reduced at two more German sites.

Some reports say the slowdown is pencilled in for August 20-29.

A spokesman at VW’s Wolfsburg headquarters, where 60,000 are employed, said shortening staff hours were a possible response to supply problems.



Why is this happening?


The car maker says it is facing hold-ups in its supply chain.

Europe’s largest car maker said on Wednesday that production of its top-selling Golf model at Wolfsburg is being hit.

Supplier ES Automobilguss GmbH has stopped delivering cast-iron parts needed to make gearboxes.


Other plants affected


The plans to shorten hours at the Wolfsburg factory are the latest escalation in a supplier row that is causing problems in VW’s operating businesses

The other two plants affected by shorter working hours are said to be VW’s gearbox-making facility in Kassel and an auto-assembly site in the eastern German city of Zwickau.

The disruptions coincide with similar problems in Emden, VW’s northern German plant.

Supplier Car Trim GmbH, a sister-company of ES Automobilguss, stopped deliveries of seat covers earlier this month.

Both firms are part of Wolfsburg-based Prevent DEV GmbH.

There has been no comment from Prevent as yet.


The business


VW shares fell by around one percent on Friday to just over 120 euros.

“It is known that Volkswagen has negotiated even harder this year due to the pressure they are under themselves. And some of the suppliers have to accept conditions which surely will not make them jump up and down with joy. And that might have been the reason for one of the suppliers to draw a line,” said Bankhaus Metzler car expert Juergen Pieper.

“I think it will end with both parties coming to an agreement in one or two weeks, because both companies will be publicly scrutinised from now on and the loss for both will increase.”

The ongoing emissions-test cheating scandal is costing VW billions of euros.

Analysts expect the company to seek price cuts from its suppliers to mitigate the costs.


VW’s emissions scandal – Fact Check


“We’ve totally screwed up,” – VW America boss Michael Horn


  • In September 2015, US authorities found VW had intentionally skirted clean air laws via software installed on 500,000 diesel models
  • It meant the cars emitted less pollutants during tests than on the road
  • VW says globally 11 million cars could have the so-called “defeat device” fitted. That includes 8 million in Europe
  • VW was ordered to fix the cars at its own expense
  • The German carmaker also faces billions in fines
  • VW Jetta, Beetle, Golf, Passat and Audi A3 models all implicated
  • VW has set aside €6.7bn to cover costs
  • The company posted its first quarterly loss for 15 years last October – €2.5bn

    • (Source: APTN, BBC)


    What they are saying


    “Our consortium is in a legal dispute with Volkswagen and is obliged to maintain confidentiality,” – ES Automobilguss GmbH spokesperson via email