VW Says Talks to End Supplier Dispute Will Resume on Monday

August 20, 2016, 8:23 PM UTC
Picture taken on June 28, 2012 shows a man working on a diesel motor at a plant of German car maker Volkswagen in Salzgitter, central Germany. German auto giant Volkswagen faced fast-spreading worldwide investigations and a potentially huge financial hit on September 22, 2015 as a scandal mounted over diesel cars it programmed to secretly thwart US pollution tests. AFP PHOTO / DPA / JULIAN STRATENSCHULTE +++ GERMANY OUT (Photo credit should read JULIAN STRATENSCHULTE/AFP/Getty Images)
Photograph by Julian Stratenschulte — AFP/Getty Images

Volkswagen is seeking a negotiated settlement with suppliers in a dispute over contracts that is halting production at some of its plants and talks will resume on Monday, the German carmaker said.

“Naturally, we remain in talks with the suppliers,” a VW spokesman said, adding that the negotiations had run late into the night on Friday and that the parties had agreed to resume discussions on Monday.

He said the company was keeping its legal options open, without giving further details.

Angry Suppliers Halt Volkswagen Factories

Two Volkswagen suppliers accused the carmaker on Friday of cancelling contracts without explanation or offering compensation, prompting them to stop deliveries.

CarTrim, which makes seats, and ES Automobilguss, which makes cast iron parts needed to make gearboxes, are seeking compensation after saying they faced lost revenues running into tens of millions of euros.

German newspaper Sueddeutsche Zeitung said the suppliers were seeking 58 million euros ($66 million) from VW, without citing a source for the information.

A source close to Volkswagen told Reuters on Thursday the company would cut working hours for more than 10,000 staff at its Wolfsburg headquarters and reduce output at two more German sites.

Separately, the carmaker confirmed a report in Bild newspaper on Saturday that the Wolfsburg plant would halt production of the Golf model from Oct. 4-7 and from Dec. 19-22.

VW said the stoppages were part of regular production adjustments planned for the following quarter and were due to output being higher than expected thanks to workers keeping up production during the summer shutdown in July.

It denied, however, that the company expected to produce 15,000 fewer Golfs this year than planned at the beginning of the year.