Golf production will restart soon
Prevent DEV was demanding €58 million (approx. $85 million CAD) to recoup money it spent expanding production to meet a €500 million (approx $728 million CAD) order that Volkswagen cancelled. The automaker has got off relatively lightly, then, paying out €13 million (approx. $19 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 10 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. A total of 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.
Volkswagen Group has been seeking to cut costs from the core Volkswagen brand by €1 billion (approx. $1.46 billion CAD) 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