Volkswagen ending its dispute with the two suppliers for the models Golf and Passat and the production of those two popular models will be continued.
Conflict was raised earlier this week, when WV allegedly stopped payments for the agreed costs. Cutting the supplies has caused adjournment in the German plants for Golf and Passat on Monday as well as the assembly lines of the gearboxes and engines. Car Trim and ES Guss, daughter companies of Prevent Group, are producing seat components and past for the transmission boxes.
20 hours negotiation resulting the 6 years contract
According to the Automotive News, VW and its most important procurers have resolved the open issues. And not only that. Partners have made an agreement to continue cooperation for at least 6 more years.
Even though the dispute is resolved and the negotiations were finished positively, problems were overrun to the other companies connected with the German producer. Because of the cutting down of the production, deeper chain reaction was caused. In fact, German Association of Supply Chain Management, Procurement, and Logistics stated that more than 500 companies supplying the parts for the Golf models were forced to stockpiling due to the deadlock.
When the production of the Golf has stopped it was estimated that the loss of the concern could be even 100 million Euro per week. Nevertheless, this concern is still dealing with the problems on the other front – in the USA that sued the German automaker for hundreds of millions of dollars over environmental law violations.
VW spokeswoman Jeannine Ginivan said the automaker “is committed to reaching a fair and efficient resolution of remaining federal and state diesel claims in the United States.”
She said the agreement “will provide a constructive route to resolving any remaining environmental claims.” VW has set aside nearly $20 billion to handle the expected costs stemming from the scandal.