Volkswagen finally settled a contract dispute, after negotiations with two suppliers began on Monday morning.
After 20 hours of talks with two suppliers, manufacturing seats and cast iron parts needed to make gearboxes, Volkswagen has now confirmed that a resolution has been reached. CarTrim as well as ES Automobilguss will resume supply to the German car manufacturer shortly.
Stoppages will not affected already placed orders
The stop of production affected 27,700 staff members, as well as the production output at four German VW plants, according to Volkswagen. The German car manufacturer has however stated that the dispute and temporary supply cut will not affect delivery of already executed orders.
According to the BBC, production of Golfs in Wolfsburg, as well as production of both Golfs and Passats in Zwickau will resume later this week.
Production of chassis parts and plastic parts in Braunschweig will start again Monday next week.
Volkswagen gave no details of the nature of the settlement.
Due to what the company stated to be an unrelated issue, production of Passats was also temporarily halted in Emden last week, but is set to resume again this Wednesday.
News of a number of production stoppages send Volkswagen (VOW3:GER) shares down 2.3%, to a low of €119.05, on Monday afternoon. After the resolution to the dispute became public, they recovered to €122.6, up 2.12% from market open on Tuesday.
Car maker’s share prices still not recovered since last years emission scandal
The car maker suffered greatly after the emission scandal in the second half of 2015. The company has since only managed a marginal recovery of stock prices and prices once again fell sharply after the UK’s EU referendum.
Although earnings were still depressed by further pay outs and law suits, related to the illegal software installation deactivating pollution controls, Q2 earnings in 2016 exceeded estimates, giving investors some new confidence in the performance of the car manufacturer.
Katharina Fleiner 23/08/2016