German carmaker Volkswagen has confirmed it'll hold more talks with two suppliers of components. It's an attempt to defuse a crisis which has forced VW to cut shifts and halt production of its crucial Golf model.
Image: picture-alliance/dpa/J. Stratenschulte
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Embattled German automaker Volkswagen said it would hold another round of talks on Monday with two suppliers whom it blamed for disrupting production at some of VW's facilities.
ES Automobilguss, a supplier of cast gearbox components, and a producer of seat covers, Cartrim (both belonging to the Prevent supply group), had suspended their deliveries in August over a legal dispute with Volkswagen.
Although VW secured temporary injunctions ordering the two suppliers to resume deliveries, the two mid-sized firms appealed the decision, forcing VW to slash work hours at key factories and suspend the production of the popular Golf model at its main plant in Wolfsburg.
Optimism prevails
VW said production there could not be resumed before next Saturday, August 27. Also, assembly lines would stand still at a Golf and Passat facility in Zwickau in eastern Germany. All in all, 28,000 VW employees will be affected by supply disruptions in the course of the week.
The parts suppliers had accused VW of cutting several contracts without any advance warning or appropriate compensation. According to Germany's "Süddeutsche Zeitung" newspaper, the Prevent supply group is also seeking compensation from Daimler for canceled contracts.
The stand-off comes as VW is still in the throes of its biggest-ever crisis, caused by its large-scale emissions tests cheating scandal affecting millions of diesel engines worldwide.
VW Works Council chief Bernd Osterloh told Germany's "Bild" daily on Monday that he expected the worst to be over in two years, adding that the company was strong enough to survive looming compensation payments of over 25 billion euros ($28.2 billion).
Osterloh noted Volkswagen could even "emerge stronger from the scandal, should its new all-electric vehicle hit the markets in time and at a customer-friendly price."
Volkswagen - a global company
VW Group has factories at 119 locations globally and employs 600,000 workers in 20 European nations plus 11 countries in Asia, the Americas and Africa. VW's first factory was built at Wolfsburg in 1938.
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Every second VW is sold in China
VW Group was one of the first Western companies to invest in China as its economic transformation began in the mid-1980s. In the northern Chinese City of Changchun, VW entered into a joint venture with China First Automotive Group. VW opened a new engine factory in the same city in 2013.
Image: VW
A picture from an untroubled recent past
"A German masterpiece - you can trust us," it says on this ad for the VW Passat in China. VW's investment in China has been a success story. There are now 13 VW factories in China, with the newest having opened in May in the southern Chinese city of Changsha.
Image: imago/T. Frey
In India, small cars are the big priority
VW has three factories in India. The factory "Volkswagen Group India" operates in Pune and is one of the most modern production facilities in VW's global portfolio. In 2010, the production of the 11,111,111th VW Polo was celebrated in the presence of the then German President, Horst Köhler.
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VW's long tradition in South Africa
Volkswagen of South Africa, based in Uitenhage near Port Elizabeth, has a corporate history of nearly 80 years - beginning just four years after VW was founded in Germany. About 120,000 automobiles are produced annually in Uitenhage. In August, VW announced it will modernize and expand the factory. South Africa is among the many global markets where VW faces tough competition from Toyota.
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Loyalty to Russia
Despite the currently frosty relations at the top political level, many German companies - including VW - remain faithful to Russia. VW is the biggest foreign investor in the Russian automobile sector. Prime Minister Dmitri Medvedev was on hand for the opening of VW's new engine factory in Kaluga in early September, which has a production capacity of 150,000 motors annually.
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Slow sales in the USA
When a new VW factory was opened in Chattanooga, Tennessee in 2011, VW had big ambitions for the US market, but sales have remained below target. VW heir and boss Ferdinand Piëch admitted that: "We understand Europe, we understand China, but we don't really understand the USA." Some experts are suggesting VW should pull out of the US market in the aftermath of the diesel emissions scandal.
Image: picture alliance/dpa
Mexican success stories
VW has been producing cars in Puebla in Mexico for nearly 60 years. Volkswagen de Mexico is the town's biggest employer, with 15,000 workers. The old VW Beetle was produced here until 2003. Now the Puebla factory produces Passat, Jetta and New Beetle model cars, which are exported from here to more than 100 countries.
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¡Buen día Volkswagen!
Volkswagen has seven production locations in Latin America. VW Argentina is headquartered in Cordoba, the country's second largest city, where the VW factory employs about 1,500 workers. Here, transmissions and other components are produced for VW's entire global supply chain.
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In Brazil, minibuses are in high demand
Brazil hosts seven VW factory locations and is VW's third-biggest national production center after Germany and China. The factory in Sao Bernardo do Campo was founded in 1953. Over time, Volkswagen do Brasil has made its mark by developing its own models - including these minibuses - aimed at South American and African markets.
