Aug. 22, 2016—Volkswagen has been forced to cease production of its Golf and Passat models at six German factories after suppliers cut off deliveries because of a dispute with the automaker, according to a report from Bloomberg.
VW received transmission and interior parts from the supplier. The shutdown affects nearly 10 percent of VW’s German workforce and could cut profits by about $79 million per week.
According to Prevent Group, the Bosnian-based supplier, VW has tried to pass along the effects of its diesel scandal on to suppliers, and Prevent has had to take a stand in order to ensure its own survival, according to Bloomberg. Prevent said that VW has refused to reimburse the suppliers for modifications made at factories in anticipation of a contract that fell through. The supplier is seeking 58 million euros in compensation.
“Volkswagen continues its efforts to reach agreement with the suppliers,” the carmaker said in a statement, according to Bloomberg. The two sides are holding an emergency meeting on Monday to attempt to resolve the dispute out of the courtroom, while still battling in it.
