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Volkswagen what next

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  • 20-08-2016 5:16am
    #1
    noelf
    Registered Users Posts: 1,094 ✭✭✭


    Volkswagen is preparing to seize components from suppliers that are witholding parts in a contract dispute four of its factories face production stoppages Golf production in Wolfsburg will come to a halt for 5'days next week Passat production has stopped at its Emden plant due to a shortage of seat covers . Shifts are to curtailed in a gearbox making plant in Kassel . The reason Volkswagen cancelled contracts with its suppliers without giving a reason and refused to offer compensation . It would appear that Volkswagen intends to squeeze its suppliers on the cost of parts in order to pay for the massive fines its facing and the low profit margin 2% it has ( Peugeot 6%)

    Abridged from Automotive News Europe


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    #2
    Special Circumstances
    Closed Accounts Posts: 7,569 ✭✭✭Special Circumstances


    Summary:
    VW put pressure on suppliers to boost "poor profitability"
    Gearbox part supplier and seat trim supplier (both owned by same parent company) say "f*ck you, pay me" and withold parts.

    VW cut shifts and stop production of Golf.
    Ask for permission to drive into suppliers and load up an octavia with necessary parts.

    (Note, summary of more than one article, Google autonews vw suppliers. I too am having trouble posting a link)


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    #3
    corglass
    Registered Users Posts: 1,113 ✭✭✭corglass


    Good on the suppliers.

    Hopefully this gets more press


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    #4
    kirving
    Registered Users Posts: 5,916 ✭✭✭kirving


    Tier 1 suppliers to OEM's such as Volkswagen have extremely complex and binding contracts that will include reducing pricing over time, and significant penalties for delays and reduced quality. Financial penalties for stopping a single production line due to delays can be millions per day.

    Many OEM's already arrange/pay for shipping from the suppliers factory to theirs, much like the public do from Amazon. OEM's then push for the suppliers to open factories local to theirs to reduce shipping. In this sense, it really doesn't surprise me that VW wan't to drive up to the factory door and collect what they need to carry on.

    I'm surprised though that VW haven't enough capacity between their other suppliers to keep themselves up and running. Either way, this must have been going on for months and has got way out of hand.


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    #5
    noelf
    Registered Users Posts: 1,094 ✭✭✭noelf


    I think it just shows how desperate volkswagen is to cut costs .. due to very strong union agreements they can't make full time workers redundant . If I remember right workforce is equivalent to Toyota GM and perhaps Ford ..


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