Volkswagen Suppliers Deny Fault for Bottlenecks

Units of German auto parts supplier Prevent are in a dispute with auto maker Volkswagen, which has reduced work hours and production at some factories in response. ENLARGE
Units of German auto parts supplier Prevent are in a dispute with auto maker Volkswagen, which has reduced work hours and production at some factories in response. Photo: European Pressphoto Agency

Two Volkswagen AG VLKAY -0.55 % suppliers  VLKAY -0.55 % denied responsibility for parts shortages at the German car maker’s plants, a problem that has forced it to halt production of two models at its main plant in Germany and reduce working hours elsewhere.

Volkswagen on Friday said it would suspend output for a week beginning on Monday of its Golf and Sportsvan models at its Wolfsburg, Germany, factory due to a dispute with suppliers. It earlier instituted reduced hours at its Emden plant because of a shortfall in parts and is considering cutting hours at three other plants because of parts that haven’t been delivered.

Separately, General Motors Co. GM 0.89 % ’s Adam Opel GmbH said it would reduce working hours for some employees at factories in Rüsselsheim and Eisenach, Germany, this year due to weakening demand for its Corsa and Insignia models.

A GM spokesman didn’t say how long the reduced work hours would last, saying it would depend on U.K. demand for the vehicles. The company cited weaker demand in the aftermath of the U.K. vote to leave the European Union.

ES Automobilguss GmbH and Car Trim GmbH, the Volkswagen suppliers involved in the dispute, however, said they stopped deliveries because Volkswagen canceled contracts without explanation or compensation. The two, which belong to auto-parts maker Prevent, said as a result they are owed tens of millions of euros.

“We’re not the cause of Volkswagen’s crisis and the resulting short-time work,” the companies said in a joint statement. “Those issues are homemade and Volkswagen is trying to blame its own problems on the supplier industry,” ES manager Alexander Gerstung said.

Car Trim makes parts for seating and ES Automobilguss makes gearbox components.

“We seek a mutually agreed solution with Volkswagen and are open to suggestions,” Mr. Gerstung said. He said the suppliers’ decisions were taken to protect their own workforces and financial health.

Volkswagen didn’t respond to the accusations.

The auto maker continues to grapple with financial and strategic issues caused by an emissions-cheating scandal that erupted nearly a year ago. In September, U.S. authorities said the company cheated on pollution tests by outfitting diesel engines to produce less emissions in tests than on the road, a revelation that threw Volkswagen into turmoil. The company set aside nearly $ 18 billion in its 2015 accounts to cover costs related to the scandal.

Volkswagen said the current production problems weren’t related to demand for its vehicles. Demand for some vehicles has fallen in some markets, however. In Germany, the Federal Motor Vehicle Office most recently reported that registrations for new Golf models fell 8.9% in the first seven months of the year.

A spokesman for Volkswagen said he couldn’t say how many fewer vehicles would be produced due to the halt in Wolfsburg or how many workers would be affected. He also couldn’t say whether workers would stay home or simply work fewer hours during the several-day period.

A person familiar with the situation said reduced hours at five plants could affect as many as 20,000 workers.

Volkswagen employs roughly 276,000 people in Germany. Around 73,000 workers are employed at the Wolfsburg plant, which produced around 815,000 vehicles last year, according to the company.

Write to Hendrik Varnholt at [email protected] and Sarah Sloat at [email protected]


WSJ.com: US Business

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